Ambulatory Surgery Centers Petition Supreme Court To Overturn Gordon V. Lewistown

Washington, D.C. – March 14, 2006: Two of the nation's leading ambulatory surgery center (ASC) associations filed an amicus brief to petition the U.S. Supreme Court to hear and overturn Gordon v. Lewistown Hospital, a case that may have a significant impact on patient care options and treatment costs nationwide. The law firm of Crowell & Moring LLP filed the brief on behalf of the American Association of Ambulatory Surgery Centers (AAASC) and Outpatient Ophthalmic Surgery Society (OOSS) expressing concern that the case may significantly affect the ability of ASCs to provide lower-cost, high-quality health care in competition with traditional hospitals.

The case arose after plaintiff Alan D. Gordon, M.D., a cataract surgeon, was stripped of his staff privileges at a Pennsylvania hospital. Prior to, and during the pendency of the hospital's disciplinary proceedings, Gordon was attempting to open an ambulatory surgery center in competition with the hospital. Gordon argued that the hospital's disciplinary actions against him based on his communications with patients and hospital-affiliated personnel were motivated by a desire to drive him out of business and prevent competition. A three-judge panel of the U.S. Court of Appeals for the Third Circuit, that included now Supreme Court Justice Samuel A. Alito, Jr., upheld dismissal of Gordon's damage claims, relying on the immunity provided to hospitals under the Health Care Quality Improvement Act (HCQIA) for peer review of physicians based on their competence and professional conduct. The court also rejected injunctive relief, asserting that at the time the hospital's action was taken Gordon was not yet a competitor of the hospital.

“The bottom line before the Supreme Court is the medical care provided to the patient -- and our country's commitment to affording beneficiaries more and better surgical treatment options. Without protecting the rights of ASCs and the physicians who operate them, patients will have fewer choices and lower quality care at higher cost,” said John J. Duggan, M.D., AAASC president and Arizona physician.

Since the 1980s, the number of ASCs has grown rapidly, doubling in the past decade and now totaling over 4,400. Patients receive surgical care administered by specially trained personnel in a more convenient and patient-friendly environment, and often at lower coinsurance payments than hospital outpatient departments. As ASCs have enjoyed increased success, the physicians who own them have sometimes become the targets of staff privileges revocations by competing hospitals. In some cases, hospitals have reportedly prohibited physicians from discussing ASC treatment options with patients.

“The Third Circuit has essentially provided hospitals a green light to discipline doctors not because of their professional competence but because of their efforts to create options for patients outside of the hospital. Physicians who desire to work at or open an ASC often face hurdles imposed by hospitals. When we protect physicians from egregious anti-competitive behavior by hospitals, we protect our patients.” said OOSS president William J. Fishkind, M.D., FACS.

Crowell & Moring partner and former director of the Federal Trade Commission's health care antitrust program Arthur N. Lerner addressed the precedent set by the Third Circuit. “The ruling seemingly permits hospitals to take anticompetitive measures against ambulatory surgery centers and their related physicians without the normal protections of the antitrust laws. The court ignored the specific exceptions that were written into the immunity law in order to protect physicians from peer-review actions that were based on the physician's competitive activities. The court also seems to only offer full antitrust protection to new competitors after they open their doors for business when in fact they need that protection before the patients start arriving,” Lerner said.

Editor's Notes:

Michael A. Romansky of Strategic Health Care is Washington Counsel for AAASC and OOSS. Visit Strategic Health Care online at http://www.strategichealthcare.net.

The American Association of Ambulatory Surgery Centers (AAASC) is a national association dedicated to advancing high quality, physician led and patient centered care in ambulatory surgery centers. With members comprising more than 1,500 ASC locations across the country, AAASC supports medical, clinical and administrative professionals who deliver efficient, high quality, and cost effective patient centered outcomes through ambulatory surgery centers. Visit AAASC online at http://www.aaasc.org.

The Outpatient Ophthalmic Surgery Society (“OOSS”) is a professional medical association representing over 1,000 ophthalmologists, nurses, and administrators who specialize in providing high-quality ophthalmic surgical procedures performed in ambulatory surgery centers. Visit OOSS online at http://www.ooss.org.

The amicus brief was prepared by Crowell & Moring attorneys Arthur N. Lerner, David Florin, Clifton S. Elgarten, and Valerie Hinko. A copy of the brief is available online at http://www.crowell.com/pdf/ambulatorycenterbrief.pdf.

Crowell & Moring LLP is a full-service law firm with more than 300 attorneys practicing in litigation, antitrust, health care, government contracts, corporate, intellectual property and more than 40 other practice areas. Crowell & Moring's Antitrust and Health Care Groups are ranked among the largest in the country. Based in Washington, D.C., the firm also has offices in Brussels, California and London.