EXCLUSIVE CONTRACTS

Four Corners Nephrology Assocs. v. Mercy Med. Ctr. of Durango, No. 05-cv-02084-JAP-LFG (D. Colo. Mar. 4, 2008)

In an antitrust lawsuit brought by a physician challenging a hospital's decision to enter into an exclusive contract with another provider, the United States District Court for the District of Colorado affirmed summary judgment in favor of the hospital on several claims.

The court granted summary judgment in favor of the hospital with respect to the claim that it was engaged in a monopoly, holding that there was no evidence that the hospital controlled prices in the relevant market. In fact, the court noted, evidence showed that the majority of the hospital's reimbursements came from federal payors and private insurers, who rarely or never raise their reimbursements in response to demands from providers. Notably, the court also rejected the physician's claim for "arbitrary, capricious, and unreasonable denial of staff privileges," finding that a 1975 judicial opinion recognizing such a claim was no longer applicable. The court cited more recent case law recognizing the overwhelming weight of authority holding that a private hospital has the right to appoint and remove members of its medical staff at will.

The court delayed judgment on the physician's illegal tying arrangement claims after finding that the success of the physician's argument depends on the relevant geographic market, which remained unresolved at the time of the summary judgment hearing.