The Supreme Court of Arkansas has sided with physicians who argued that Baptist Health acted improperly when it denied them staff privileges because they owned shares in a competing hospital.
The case stems from a Baptist Health Board of Trustees vote in May of 2003 in which the board approved a conflict of interest policy. That policy resulted in barring two cardiologists, Bruce Murphy MD and D. Andrew Henry, MD, from clinical staff privileges because they owned an indirect interest in the Arkansas Heart Hospital, according to the complaint.
The doctors took legal action in 2004 against the Little Rock healthcare system, said to be the largest in the state, alleging violations of the federal anti-kickback statute, the Arkansas Medicaid Fraud Act, the state's false claims act and the Arkansas Deceptive Trade Practices Act.
Baptist, which has five hospitals, numerous clinics, and several other specialty services, successfully moved to dismiss the complaint. That prompted the doctors to file a lawsuit in county court claiming Baptist's actions prohibiting them from privileges "constituted tortious interference."
The decision was reversed. That and subsequent decisions in other state courts favoring the doctors were upheld on Sept. 30 by the Arkansas Supreme Court.
"We affirm the circuit judge's finding that the appellees proved their tortious interference claim by a preponderance of the evidence and, therefore, also affirm the judgment granting declaratory judgment on that claim.
The decision enjoined Baptist from denying the doctors "professional staff appointment and clinical privileges on the basis of the (conflict of interest) policy.
The American Medical Association applauded the ruling saying it "validates a key legal victory that found Baptist Health, Arkansas' largest hospital system, acted improperly by inappropriately restricting hospital admitting privileges and interfering with the patient-physician relationship," based on financial concerns, said president Cecil B. Wilson, MD.
The AMA's Litigation Center, State Medical Societies, and the Arkansas Medical Society intervened as plaintiffs arguing that financial considerations alone should not be grounds to deny physician credentials.
"Patients benefit when physicians have admitting privileges at multiple health facilities," Wilson said. "Free of Baptist's restrictive policy, physicians can now offer patients the benefit of choosing a facility that best suits their need for costs, quality and convenience."
Baptist Health spokesman Mark Lowman said the ruling was "disappointing" and that Baptist is reviewing it to determine the next step.
"As a matter of principle, many companies have conflict of interest policies," he said. "Baptist Health believes that it has an absolute right to have a conflict of interest policy, which denies privileges to a physician who has an ownership interest in a competing hospital.