Court to FP: The OR is off limits!

Can a hospital limit C-section privileges to ob/gyns? A California court says Yes.

By Anne L. Finger
Senior Editor

When Sonora (CA) Community Hospital refused to consider FP Eric M. Runte for cesarean section privileges because he wasn't an ob/gyn, both the California Academy of Family Physicians and the American Academy of Family Physicians threw their financial support behind his legal battle to challenge the decision. "We think basing privileges purely on specialty violates the whole privileging tradition in medicine," says Joseph E. Scherger of Irvine, CA, who was president of the CAFP when the conflict broke out in 1994.

Runte felt well-qualified to perform C-sections when he arrived at the hospital earlier that year: He was fresh from residency, where court papers indicate he'd performed around 110 of the procedures, and the ob/gyn who evaluated him then had called him a "superstar." Furthermore, the privileges criteria at SCH made no mention of education or specialty.

But after receiving Runte's application, the hospital accepted the recommendation of three members of its department of obstetrics and pediatrics and changed the requirements: Only applicants who had completed 36 months of obstetrics residency—or were either board-certified or board-eligible in that specialty—would be considered. "Instead of addressing my request for privileges," Runte says, "these obstetricians held me at bay for many months while they drafted new rules."

So Runte sued SCH and the three ob/gyns he claims were determined to eliminate him as a competitor—Lawrence E. Brunel, Louis R. Erich, and Donovan Teel—for various federal and state antitrust violations.

SCH and the defendant ob/gyns insisted they had based their decision on what they felt was best for patient care.

The courts accepted their position. Last January, a federal appellate court dismissed the case, ending Runte's six-year fight. His case now joins a long list of judicial decisions that prevent physicians who are embroiled in privileges disputes from suing their competitors under antitrust laws. Many of these rulings, as in Runte's case, have been made before the suits reached a jury.

An FP with a mission takes on a Medi-Cal practice

When it came time to choose a residency program, Runte sought one that would train him in both missionary and rural medicine. "He wanted as broad a range of technical skills as possible," recalls Scherger, who was his adviser at University of California, Davis, School of Medicine. "That's why he picked Ventura (CA) County Medical Center. All the FP residents there do C-sections under the training of three staff ob/gyns."

Runte volunteered to do extra obstetrical operations to hone his skills. Indeed, says Scherger, his total of 110 C-sections is comparable to the number an ob/gyn resident might do. The evaluating obstetrician who called him a superstar ranked Runte in the top 10 percent of all the residents he'd seen for surgical proficiency.

After completing his residency, Runte became director of primary care as well as director of the prenatal ambulatory care clinic at Tuolumne General Hospital, in central California's San Joaquin Valley. At this county facility, his patients were covered primarily by Medi-Cal, the state's Medicaid program.

When the county hired Runte, it canceled the contract of the ob/gyns who'd been providing obstetrical services to TGH: the three defendants and Christopher R. Mills. (Mills wasn't named as a defendant because he was "somewhat sympathetic" to Runte, says Barbara Hensleigh, Runte's attorney.) TGH relied on Runte to provide complete obstetrical care for its patients. Because the hospital offered no obstetrics services, Runte applied for medical staff privileges at the nonprofit Sonora Community Hospital in February 1994.

He noted in a letter accompanying his application that he was also applying "for privileges to do uncomplicated operative and nonoperative deliveries and postpartum tubal ligations." At the time, the four physicians who had handled TGH's obstetrical services were also the only ones at SCH with C-section privileges.

In June, SCH granted Runte privileges, but not for C-sections. The hospital told him he hadn't checked the right box on his application.

Taking a new look at privileging criteria

After Runte had resubmitted his application, he learned that the obstetrics department members were re-examining the criteria for ob/gyn privileges—a process they say began in 1993.

In 1994, Brunel, as department chair, drew up new categories of privileges. In researching the issue, he examined the AAFP-ACOG recommendations, which support the idea of family physicians' performing C-sections. Nevertheless, Brunel placed C-section privileges in the high-risk category that required special obstetrics training and education. The obstetrics department endorsed the revised criteria and recommended them to the hospital's medical executive committee.

When the committee met in July 1995, Brunel told the members that the hospital ob/gyns felt Runte didn't have the experience and training to perform C-sections. In his defense, Runte provided documentation supporting his training, experience, and ability. He also gave the committee information defending the quality and safety of C-sections performed by FPs. He suggested that the committee seek input from a task force with members from both specialties. The committee did so, while stating that it wouldn't be bound by the task force's recommendations.

The task force developed guidelines, approved by the boards of both state specialty associations, that said privileges for primary care, obstetrical care, and C-sections should be granted "regardless of specialty, based on standards of training that enable an applicant to meet established criteria" (see "FPs and ob/gyns agree on practice privileges"). Scherger, the CAFP president, asked task force members whether Runte should be considered for C-section privileges. When they said he should be, Scherger informed the hospital's executive committee.

The committee met again in November 1995, with Erich and Brunel among the seven members present. Teel read a letter he'd written stating that restrictive criteria were appropriate, as C-sections can involve substantial risk and Runte wouldn't do enough of them to maintain surgical expertise. (Only six of Runte's patients had needed the surgery in the previous year.)

In addition, Teel informed the committee that if it or the hospital governing board expanded the role of FPs to include surgical deliveries, "each of us [in the department] will then have to individually re-evaluate our present relationship with Sonora Community Hospital."

The committee voted to support the ob/gyns' revised criteria, throwing the final decision to the hospital's governing board, which met two months later to vote. On Jan. 22, 1996, the board approved the privilege restrictions, determining that they were in the best interest of patient care. Board members also expressed concern that by "lowering the standard to obtain C-section privileges," the hospital might be subject to liability.

That's when Runte sued the hospital and the three ob/gyns, charging they had violated antitrust laws, conspired to boycott, and restrained trade. He was joined by Tuolumne County, which derived revenues from his TGH practice and thus stood to lose money by the limits on his privileges.

Runte fingered Teel as the leader in the campaign against him. At some point, according to Runte, Teel informed him that Runte would never perform C-sections in Sonora because "there isn't enough of the pie to go around."

In addition, says Runte, Teel told him he'd have a "helluva" time getting privileges. And Teel told Brunel that allowing ob/gyns to perform C-sections on the patients of FPs was a way to compensate the specialists for the curbside consults they did for FPs. Teel had also mentioned to at least one physician in a surgical scrub area that Runte had mismanaged several obstetrical and one nonobstetrical patient.

Teel says he doesn't recall making the "pie" comment, but he does remember saying Runte would have a "helluva" time getting C-section privileges "because the training was not there and the perceived need to do C-sections was not there. It's just like I'd have a helluva time getting privileges to do a total hip replacement."

Asked about his assertion that Runte had mismanaged several patients, Teel says, "The issue is not whether he's a good doctor. The issue is whether he has training to do surgical deliveries." Teel contends that hospital records from Runte's residency showed he'd performed only 12 C-sections.

Some concerted action, but no conspiracy

After two-and-a-half years of legal maneuvering, a federal district court dismissed the case in November 1998. In explaining its decision, the court acknowledged that the defendant obstetricians "tended to act together to advance their interests" by providing coverage for each other and sending out several letters on joint letterhead.

One, to the TGH administrator, stated that Runte was incompetent to supervise the clinic and back up the clinic's midwife. Another threatened to withdraw backup from TGH's clinic if the clinic tried to attract private-pay patients or to open a competing obstetrical unit. A third attempted to remove a noncompete clause from a contract with SCH in order to operate a prenatal clinic that would compete with TGH's. (That clinic opened, but failed.)

Teel was "particularly zealous about guarding what he perceives to be his economic interests," noted the court opinion, adding that a jury could conclude from the evidence that Teel had drafted the joint correspondence for the obstetricians. Christopher Mills had testified at his deposition that Teel had reviewed all the joint correspondence with him before sending the letters.

Nevertheless, the court didn't agree with Runte about the importance of the letter Teel read aloud at the hospital committee meeting, in which he threatened to rethink his affiliation if Runte received privileges. That letter isn't direct evidence of a conspiracy between the ob/gyns and the hospital, the court concluded, "because there is no evidence that the Board members ever considered this threat or acted upon it."

Rather, the court found that SCH's restricting C-section privileges to ob/gyns was a business decision that was "not unreasonable."

Runte appealed, but the appellate court was also unpersuaded that Teel's warning to the committee was evidence of a conspiracy. Because Teel's letter didn't bear the joint letterhead—unlike other letters he'd sent—the court decided that the correspondence "didn't evidence a 'meeting of minds' between Defendant OBs and the [committee] or the board."

But Runte's attorney, Barbara Hensleigh, points out that the hospital had received one letter on joint letterhead written by Teel, and another signed by Teel that said, "we are opposed. . . . " In addition, she says, Brunel and Erich were at the committee meeting where Teel read his letter, and neither one offered a different opinion. Taken together, she says, "It's reasonable to infer that the hospital will believe he's speaking on behalf of all the OBs. I think that's at least a jury question."

But the appellate court observed that evidence supporting a conspiracy must be explicit. What's more, the court said, the defendants had shown a "plausible and justifiable" reason for the more restrictive privileging criteria: to maintain quality patient care and manageable insurance costs.

In refuting those findings, Hensleigh cites testimony from Michael H. Jackson, chairman of the SCH board. Jackson was also chairman of Hanford Community Hospital, an affiliated institution that does credential FPs to perform C-sections. Although he testified that he didn't know that FPs were performing the surgery at Hanford, he stated that the quality of care at Hanford was no lower than at SCH. And referring to the question of liability, Hensleigh says, "we provided the court with undisputed evidence that malpractice rates are identical, regardless of whether a hospital privileges FPs or just OBs."

The appellate court considered suggestions that FPs performing C-sections might be proctored, monitored by peer review, and required to consult on difficult cases. But cautioning that this discussion centered on potentially life-threatening situations, the court questioned whether a hospital could implement such procedures effectively without increasing its costs substantially.

Ultimately, the court decided that the Runte case required balancing—and that the "anticompetitive harm" of denying Runte privileges was offset by the "procompetitive effects" of SCH's effort to maintain the quality of patient care.

The decision is a vindication for hospitals in credentialing matters, says Teel. "I think the appeals court ruling made clear that deciding what training is adequate is in the jurisdiction of the hospital granting those privileges," he says. "This is not the only court case that says the hospital has the prerogative to decide what it considers adequate training."

On that point, Runte's attorney agrees. "I think courts do not want to second-guess a hospital board—or even look under the rug to see the dirt underneath," Hensleigh says. "So they give tremendous deference to hospital boards that make the bald claim that their decision is for quality-of-care purposes."

Runte feels his case exposes a major problem with medical staff privileging and the courts. "When those whose turf is at risk are making the rules, don't expect to receive fair and impartial treatment," he advises his fellow FPs. "And if you want to fight for your right to practice medicine, you had better have a lot of money—and a lot of time."

With both at a premium, Runte has no plans to appeal to the US Supreme Court.

FPs and ob/gyns agree on practice privileges

To help decide whether FP Eric M. Runte, subject of the accompanying article, should have been considered for C-section privileges, a task force of FPs and ob/gyns met to establish guidelines. As a result, the following joint statement was approved in late 1995 by the executive committees of both the California Academy of Family Physicians and the local district of the American College of Obstetricians and Gynecologists:

• "Privileges should be granted on the basis of education, experience, and demonstrated competence, not solely on specialty, membership in specific scientific organization, or physician's rank or tenure.

• "All physicians should be granted privileges utilizing uniform standards adopted to ensure the provision of high quality patient care.

• "Pre-arranged collaborative relationships should be established to ensure ongoing consultation as well as consultation needed for emergencies.

• "The standard of training should allow any physician who receives training in a cognitive or surgical procedure to meet the criteria for privileges in the respective area.

• "Primary care, obstetrical care, and cesarean sections are examples of privileges that should be granted regardless of specialty, based on standards of training that enable an applicant to meet established criteria.

• "The criteria for medical staff standards and proctoring should be established by the appropriate department(s) in a collaborative fashion.

• "These principles should apply to all health systems and health plans.

• "These principles should apply to privileges across all medical specialties."

 

Anne Finger. Court to FP: The OR is off limits!. Medical Economics 2001;13:72.