Ratino v. Medical Service of Dist. of Columbia (Blue Shield)
| Decision Date | 04 November 1983 |
| Docket Number | No. 81-1798,81-1798 |
| Citation | 718 F.2d 1260 |
| Parties | 1983-2 Trade Cases 65,641 John M. RATINO, M.D., Appellant, v. MEDICAL SERVICE OF the DISTRICT OF COLUMBIA (BLUE SHIELD); Montgomery County (Maryland) Medical Society, Inc.; Stephen N. Jones, M.D.; Robert A. Barnett, M.D.; Henry M. Wise, M.D.; Ira Miller, M.D.; Holy Cross Hospital of Silver Spring, Incorporated, Appellees. |
| Court | U.S. Court of Appeals — Fourth Circuit |
Daniel S. Orci, Jr., Washington, D.C. (Edward Brown Williams, Harter, Calhoun & Williams, Washington, D.C., on brief), for appellant.
Charles J. Steele, Washington, D.C. (Jacqueline M. Saue, Washington, D.C., on brief), for appellee Medical Service of the District of Columbia.
Gerald J. O'Brien, Rockville, Md. (Stanley J. Nadonley, Rockville, Md., on brief), for appellee Holy Cross Hosp. of Silver Spring, Inc.
Thomas F. Fitzgerald, Whiteford, Hart, Carmody & Wilson; Albert D. Brault, Janet S. Zigler, Washington, D.C., on brief, for appellees Wise and Miller.
William A. Ehrmantraut, Donahue, Ehrmantraut & Montedonico, Chartered, Rockville, Md., on brief, for appellees Wise, Miller, Barnett & Jones.
Kenneth Armstrong, Rockville, Md., on brief, for appellee Montgomery County Medical Society.
Before HALL, MURNAGHAN and SPROUSE, Circuit Judges.
John M. Ratino, a plastic and reconstructive surgeon, 1 appeals from a judgment of the district court granting the defendants' motions for summary judgment in this antitrust action. Ratino's complaint asserted four basic claims against the defendants, Medical Service of the District of Columbia (Blue Shield), 2 Montgomery County Medical Society (MCMS), Holy Cross Hospital, and physicians Ira Miller, Stephen Jones, Henry Wise, and Robert Barnett. 3 His first two claims allege Sherman Act 4 violations: (1) that Blue Shield's "usual, customary and reasonable" (UCR) insurance plan, which involves "provider agreements" and "peer review committees," constitutes an illegal price fixing arrangement; 5 and (2) that the defendants illegally conspired to restrain him from using a consent form in conjunction with providing his services in emergency rooms. Ratino's third and fourth allegations charge that these same activities violate Maryland's Antitrust Act 6 and its common law prohibition against restraints of trade. 7
The district court held that the design and implementation of Blue Shield's UCR plan was exempt from federal antitrust laws under the "business of insurance" exception contained in the McCarran-Ferguson Act. 8 It next held that the contract upon which Ratino based his second claim was a contract of adhesion devoid of any right to protection under the Sherman Act. Having granted summary judgment against Ratino on the two federal claims, the district court dismissed the two pendent state claims for lack of jurisdiction. We affirm that portion of the district court's judgment as to Ratino's second claim--the "consent form" claim, but reverse and remand as to his other contentions.
We first consider and affirm the district court's summary judgment against Ratino on his claim relating to the emergency room consent form.
Ratino alleged that Holy Cross Hospital and the individual physician defendants conspired to restrain his ability to compete in the medical and surgical trade. 9 He specifically charged that the physicians, in their capacities as officers of the Professional Relations Committee and Peer Review Committee of MCMS, sought to prevent him from using his "consent for specialist care" form prior to rendering care in emergency rooms in area hospitals. Holy Cross Hospital, the only hospital charged with specifically directing Ratino to cease using the form, is alleged to have conspired with the physician defendants in taking that action.
The consent form used by Ratino essentially consists of an agreement by the patient to pay Ratino's charges for the services about to be rendered, the amount to be determined after the medical care is provided. The form provides in part:
[i]t is ... understood that such fees may exceed amounts allowed by the fee schedules of insurance companies ... or any other individual or Fee Review Commission not present when the care or surgery is rendered. This specifically includes such fee designations as usual and customary for similar care or surgery rendered by doctors without similar special training. Thus, the patient's liability includes any and all differences between the amounts paid by insurance or other third parties and the fee charged. Liability also includes physician fees for time used or required for preparation of reports, testimony or court appearances.... All amounts are to be paid in full within 30 days of service.... In the event the amount due is not timely paid, the patient ... will be responsible for all collection costs, interest on the unpaid amount at the full legal rate, attorney fees and court costs should collection procedures become necessary. Collection charges are 50% of balance due.
Ratino used this form in his general practice and in emergency room situations.
The record shows that MCMS received a number of complaints concerning Ratino's use of the consent form prior to performing emergency room treatment. 10 Doctor Wise, who was a member of MCMS's Professional Relations Committee at a time when complaints were received, drafted a letter outlining MCMS's position on the use of such forms in emergency rooms. The letter stated that MCMS rejects the practice of patients being asked to sign a contract agreeing to pay a stated sum for medical care before the physician will proceed with emergency care, and asked hospital administrators to suppress such conduct in their emergency rooms. The letter did not mention Doctor Ratino, and only pertained to the use of such forms in emergency rooms. Doctor Jones, then Chairman of the Professional Relations Committee, sent the letter in March of 1977 to the administrators of various area hospitals, including Holy Cross. 11
Some of the administrators from the area hospitals responded that they had a policy against the use of such forms in emergency rooms. In March, 1977, Holy Cross wrote Doctor Jones stating "we wish to advise that Holy Cross Hospital of Silver Springs has an open door policy with respect to charity care and renders treatment to all persons regardless of their ability to pay." In 1978, Holy Cross's Executive Committee directed Ratino to cease use of the consent form in Holy Cross Hospital.
The district court held that the consent form was a contract of adhesion, finding that there is no possibility of equal bargaining power between a provider of health care services and a patient in need of emergency care. The trial court was especially concerned that a patient in an emergency room situation would not be capable of understanding and assenting to fee and collection forms in light of his physical, emotional and mental state. The court found the contract illegal, in violation of public policy. It concluded that such a contract cannot form the basis of a trade which can be illegally restrained and thus subject to a cause of action under the Sherman Act.
We agree that the activities complained of do not constitute an unreasonable restraint of trade. The defendants simply sought to protect patients who might be unable to protect themselves in medical emergencies. The letter from MCMS merely identified a clearly abusive practice which it recommended should not be condoned at area hospitals. The letter did not mention Ratino's name, nor impose any requirement against such practice. The evidence indicates that Holy Cross, the only hospital alleged to have expressly directed Ratino to cease using the form at its facility, was not responding to the MCMS letter in taking such action, but merely was unilaterally carrying out its long established policy of providing care to patients regardless of their financial means. Indeed, there is no evidence of anticompetitive purpose on the part of any of the defendants, but the facts show an attempt on the part of medical care organizations to implement their own policies aimed at safeguarding the health and welfare of emergency room patients. See Neeld v. National Hockey League, 594 F.2d 1297 (9th Cir.1979).
The court erred, however, in granting summary judgment against Ratino on his other claims, which were raised in count one of his complaint. Ratino alleged that the design and implementation of Blue Shield's UCR insurance plan violates the Sherman Act. He charged that Blue Shield and the individual defendants conspired to fix and enforce prices for medical care in the Washington, D.C. metropolitan area at the UCR rates. 12
Blue Shield is a non-profit corporation providing prepaid medical and surgical insurance principally to individuals in the District of Columbia metropolitan area. Approximately 1.4 million individuals are enrolled with Blue Shield plans, which comprises 80% of all individuals covered by health care in the Washington area. Blue Shield has participating agreements with approximately 93 percent of the physicians in the area.
Blue Shield has offered its UCR plan to subscribers since 1971. Policyholders enrolled in the UCR plan are assured full payment of charges for treatment received from a "participating physician." Furthermore, Blue Shield pays the bills of participating physicians directly. 13 While Blue Shield pays for treatment received from a nonparticipating physician, the policyholder must pay the bill and seek reimbursement from Blue Shield. In addition, the policyholder is responsible to pay any amount charged for a particular service by a nonparticipating physician over the UCR rates established for that service.
A participating physician executes a bilateral "provider agreement" with Blue Shield. The agreement specifies that Blue Shield will...
To continue reading
Request your trial
-
Legal Principles Defining the Scope of the Federal Antitrust Exemption for Insurance
... ... of different medical providers; competitive market practices ... such as funeral service policies that offered smaller cash ... , Group Life & Health, known as Blue ... Shield of Texas, offered health ... review committees, Ratino v. Medical Service of the ... District of ... Medical Serv. of the District of Columbia ... , 718 ... F.2d 1260 (4th Cir. 1983) ... particular case." Centennial Sch. Dist, v ... Independence ... Blue Cross ... , ... ...
-
Racetrac Petroleum, Inc. v. Prince George's County, Civ. A. No. R-83-3073.
...therein at n. 86 and 89. Plaintiff argues that its formulation has been adopted in this Circuit in Ratino v. Medical Service of the District of Columbia, 718 F.2d 1260 (4th Cir.1983), and State of North Carolina ex rel. Edmisten v. P.I.A. Asheville, 740 F.2d 274 (4th Cir.1984) (en banc), an......
-
Omni Outdoor Advertising, Inc. v. Columbia Outdoor Advertising, Inc.
...Brunswick Corp. v. Pueblo Bowl-O-Mat, 429 U.S. 477, 489 n. 14, 97 S.Ct. 690, 698 n. 14, 50 L.Ed.2d 701 (1977); Ratino v. Medical Service, 718 F.2d 1260, 1272 (4th Cir.1983). VIII South Carolina Unfair Trade Practices Omni also attacks the district court's grant of judgment notwithstanding t......
-
Reazin v. Blue Cross & Blue Shield of Kansas, Inc.
...antitrust claims. White Motor Co. v. United States, 372 U.S. 253, 83 S.Ct. 696, 9 L.Ed.2d 738 (1963); Ratino v. Medical Service of Dist. of Columbia, 718 F.2d 1260 (4th Cir.1983). Section 1 of the Sherman Act does not proscribe independent action. Thus a manufacturer generally has a right t......
-
Monopsony and Backward Integration: Section 2 Violations in the Buyer's Market
...found that 16% market share was insufficient to survive summary judgment. 47. See, e.g., Ratino v. Medical Service of Dist. of Columbia, 718 F.2d 1260 (4th Cir. 1983) (board would not alter plan without approval of participating physicians); Michigan State Podiatry Ass'n v. Blue Cross and B......
-
Table of Cases
...179 Rambus, Inc., Jn re, 2006 WL 2330117 (FTC 2006), 16 Rambus, Inc. v. FTC, 522 F.3d 456 (D.C. Cir. 2008), 81 Ratino v. Med. Serv., 718 F.2d 1260 (4th Cir. 1983), 194, 197 Reazin v. Blue Cross & Blue Shield of Kan., 899 F.2d 951 (10th Cir. 1990), 79, 190 Rebel Oil Co. v. Atl. Richfield Co.......
-
Ratemaking and Rate Related Practices
..., Ariz. v. Maricopa County Med. Soc’y, 457 U.S. 332 (1982); FTC v. Nat’l Lead Co., 352 U.S. 419, 423-24 (1957); Ratino v. Med. Serv., 718 F.2d 1260 (4th Cir. 1983); C-0 Two Fire Equip. Co. v. United States, 197 F.2d 489 (9th Cir. 1952); Triangle Conduit & Cable Co. v. FTC, 168 F.2d 175, 180......
-
Table of cases
...36, 124, 126, 128, 133, 141 R Radiant Burners, Inc. v. Peoples Gas Light & Coke Co . , 364 U.S. 656 (1961), 79 Ratino v. Med. Serv., 718 F.2d 1260 (4th Cir. 1983), 62 Reazin v. Blue Cross & Blue Shield, 899 F.2d 951 (10th Cir. 1990), 32, 34, 130, 134, 164 Reazin v. Blue Cross & Blue Shield ......