The Arkansas Supreme Court recently affirmed a state appellate court’s ruling that a hospital system cannot use economic credentialing policies to deny or revoke physicians’ medical staff privileges. In Baptist Health v. Murphy et al., 2010 Ark. 358 (Sup.Ct.9/30/10), a number of cardiologists who also were part-owners of a for-profit heart hospital, successfully challenged Baptist’s economic conflict of interest policy, which mandated the denial of initial and renewed staff appointments or clinical privileges to practitioners who own competing hospitals. The doctors claimed that the policy violated the federal and state anti-kickback laws and constituted tortious interference with the doctors’ contractual relationships (between physicians and their patients) and a violation of the state deceptive trade practices act.

The Arkansas Supreme Court affirmed a lower court’s decision granting an injunction against the hospital, finding that the hospital tortiously interfered with the doctors’ business relationships and enjoining the hospital from denying the doctors’ medical staff membership and clinical privileges based on the economic conflict of interest policy. There was no Arkansas Supreme Court ruling on the anti-kickback law elements of the claim.

On September 30, 2010 the American Medical Association issued a statement applauding the Arkansas Supreme Court’s decision and stated “[t]his important victory demonstrates that economic credentialing policies at dominant hospitals are intended to restrict physicians and prevent patients from choosing competing medical facilities. Hospitals cannot use their financial interest to justify policies that interfere with patients’ health care choices.”

To read the case:

To read the American Medical Association statement: