Uncategorized
Apr 06

Kidney Doctor’s Antitrust Claims against Hospital Fail

From the American Health Lawyer’s Association (www.healthlawyers.org):

The U.S. District Court for the District of Colorado ruled on March 4th that a physician and his practice group failed to prove that a hospital violated state and federal antitrust laws by giving an exclusive contract to another nephrology practice (Four Corners Nephrology Associates v. Mercy Med. Center of Durango, No. 1:05-02084 (D. Colo., Mar. 4, 2008)).

The plaintiffs—Dr. Mark Bevan and his practice, Four Corners Nephrology Associates (FCNA)—alleged that Mercy Medical Center of Durango obtained an illegal monopoly on kidney treatment by entering into an exclusive contract with Dr. Mark Saddler and his practice, Durango Nephrology Associates (DNA). Dr. Bevan had been a consulting staff member at Mercy since 1982, treating kidney dialysis patients. He alleged that Mercy, by hiring Dr. Saddler as its own kidney specialist, had monopolized the market for dialysis services by giving all of its business to Dr. Saddler. Dr. Bevan alleged illegal tying, monopoly, attempted monopoly, and conspiracy to restrain trade in violation of Colorado antitrust law and Sections 1 and 2 of the Sherman Act.

The court ultimately found insufficient evidence that Mercy had monopolized or attempted to monopolize the market for dialysis services, ruling that Mercy has "no control over price with respect to government payers, and there is simply no indication, even assuming Mercy has a dominant market share for nephrology physicians services in the Durango area, that Mercy has any particular leverage with the commercial insurers as a result of its position." Without evidence of such control or leverage, the court concluded that Mercy lacks monopoly power in the relevant area.

The plaintiff’s conspiracy claims also failed because the court did not find any direct or circumstantial evidence of any concerted action with respect to Mercy’s decision to contract exclusively with Dr. Saddler.


Dr. Bevan alleged that Mercy conspired with Dr Saddler and others to exclude providers of nephrology services—except those in Dr. Saddler’s practice—from maintaining privileges at Mercy. According to the court, however, while Mercy had a "collaborative relationship" with Dr. Saddler, there was no indication that conversations relating to the hiring of Dr. Saddler included a joint decision to enter into an exclusive contract and thus to preclude Dr. Bevan from obtaining staff privileges at Mercy.

The court declined to dismiss Dr. Bevan’s claims of illegal tying, however, and agreed to hold another hearing on this issue to resolve a factual dispute over the appropriate geographic market for nephrology services.

About Reed Tinsley, CPA

As a top advisor to physicians, I help increase practice profits by delivering hands-on, expert medical accounting/tax support, practice counsel, and revenue-building strategies. Read more →