The original suit, filed by Krishnakumar Rajani, MD and Stephen Elliot, MD, members of Perinatal Medical Group, alleged that the hospital and the two practices violated antitrust law when, in 2008, the hospital restricted the physicians from referring patients to its NICU, despite having hospital privileges.
PMG previously held a contract with Children’s to provide services to the NICU, a regional referral center. However, the two physicians, who also held privileges at nearby Community Medical Center, helped CMC establish a NICU. CMC’s NICU, however, according to court documents, did not have a “regional” designation, and critically ill infants with certain conditions would need to be transferred to Children’s for treatment.
Children’s approached PMG and said they would revoke the group’s contract unless it agreed to refer patients exclusively to Children’s. PMG refused and Children’s entered into an exclusive contract with Central California Neonatology Group, who agreed to the hospital’s terms.
Additionally, the physicians claimed that Children’s would not accept any PMG patients into its NICU unless the referring physicians were “present physically in the Children’s NICU during the entire hospital stay of each patient, 24 hours a day, 7 days a week.” The physicians claimed that the 24/7 requirements along with the fact there was no other local regional NICU, forced them to relinquish the care of certain patients to CCNG.
CCNG filed a motion to dismiss the claim, but the judge dismissed the motion stating that the physicians had sufficiently alleged the antitrust claims. The case will move forward in federal court.
Contact Lindsey Dunn at lindsey@beckersasc.com.
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