Hawaii doctor groups
win ruling in antitrust caseInternational Healthcare charged
a conspiracy nixed its effort to set up
a new insurance plan in the state
The U.S. 9th Circuit Court of Appeals handed a number of local physician groups a unanimous victory yesterday in an antitrust case.
The decision upheld a lower court ruling in favor of the Hawaii Medical Association, The Hawaii Coalition for Health, Queen's Physicians Group and a number of affiliated physicians. The medical organizations and their officers were sued by International Healthcare Management, a Nevada-registered company created in the mid 1990s to develop a health insurance plan and provider network in Hawaii.
The company alleged the physician groups had engaged in a conspiracy to fix the terms of participating doctor's contracts and encouraged their members to boycott the plan.
The original lawsuit came about after International Healthcare Management began setting up a new medical insurance plan in Hawaii in 1998. It was to be called the St. Francis Plan.
International Healthcare was in the process of recruiting a network of physicians and hospitals to be called Hawaii Health Network.
But the physician organizations expressed concerns about the contract with International Healthcare and alerted their members about potential problems.
Physicians also met with former state Insurance Commissioner Rey Graulty about the company. The appeals court's opinion noted that Graulty was concerned about the number of corporate entities involved in the health plan and the accuracy of the list of participating providers presented by the company.
Overall 510 physicians eventually signed up to participate in the network, while 70 individual physicians, an independent physicians association and Queen's Medical Center executed contracts with the company. Fewer than 12 physicians withdrew from the plan.
Even so, the company decided to abandon its recruiting efforts and filed suit against the physician organizations alleging they held discussions concerning the physician fee schedule and threatened their members with retaliation if they signed on with the new network. The suit also alleged physicians had agreed among themselves to boycott the network.
Robert Miller, the attorney representing the Hawaii Medical Association, said yesterday's decision vindicates his clients and allows them to continue to advocate on behalf their members.
"This decision stands for the proposition that they can engage in that activity and expressions of common concerns without being accused of price fixing activity," Miller said.
Former HMA president Pat Chinn said yesterday's unanimous opinion makes it clear the court was not convinced by International Healthcare Management's arguments against the doctors.
"Their state and federal antitrust claims failed. The court's opinion was very clearly written and the other arguments that they also put forth were not developed. It's a major win. All the defendants including the HMA were completely exonerated"
Chinn said the case sets an important precedent not just in Hawaii, but also nationally.
"It sets a precedent on a national level that doctors can advocate for their patients and for themselves without fear of retribution," she said.
Representatives of International Healthcare Management could not be reached for comment.