Hospital system's economic credentialing policy ruled illegal

The Arkansas Supreme Court has ruled that Baptist Health, Arkansas' largest hospital system, cannot deny physicians' privileges if they are financially invested in a competitor, according to an AMA news release and news reports. The decision upholds last year's lower court decision that found Baptist Health had acted improperly by inappropriately restricting hospital admitting privileges and interfering with the patient-physician relationship.

The suit against Baptist Health was brought by a group of physicians, the Litigation Center of the American Medical Association and State Medical Societies and the Arkansas Medical Society. It originally was filed because Baptist restricted hospital admitting privileges of physicians who held a financial stake in rival facilities.

"Patients benefit when physicians have admitting privileges at multiple healthcare facilities," Dr. Cecil Wilson, president of the American Medical Association said in a statement.

The court's ruling rejects Baptist's economic credentialing policy, which went into effect in 2003, that allowed the hospital operator to deny hospital admitting privileges to medical staff members if they had financial ties to rival hospitals.

Baptist's motive was to discourage competition by physicians who considered investing in specialty hospitals, according to the court's opinion, which sided with the doctors. Baptist was trying to force patients to choose between it and the physicians, the court found. The opinion came down firmly on the side of the physicians, noting that the doctors' interest was in patient-physician relationships and the continuity of care, which outweighed Baptist’s interest in protecting its economic viability, because no evidence supported Baptist's purported need for the Policy.

"While society has a strong interest in Baptist’s continued viability, the evidence showed that its finances were never at risk. These factors, and others, led to the judge's ultimate finding that Baptist had acted improperly," Associate Justice Ronald Sheffield wrote in the opinion.

To learn more:
- see the opinion handed down by the Supreme Court of Arkansas
- read the American Medical Association's press release on the matter
- here's an earlier Becker's Hospital Review article on the case
- here's an even earlier discussion of economic credentialing from Physician's News Digest

Related Articles:
Physician-owned hospitals: Are they the boogeyman?
Physician-owned hospitals: A conflict of interests?
Doctor ownership of hospitals faces legal setback
Arkansas judge halts economic credentialing at health system