Aspen hospital, doctors deny antitrust claims
The antitrust suit filed against Aspen Valley Hospital and two groups of doctors has elicited three very different responses that share little in form but much at their core.Attorneys for AVH filed two motions to dismiss the case against the hospital and its CEO, Randy Middlebrook. They maintain that the hospital, as a government institution, is immune from antitrust rules; and, as a representative of the hospital, so is Middlebrook.Attorneys for Aspen Emergency Medicine, the firm that provides emergency room services, have filed a motion to dismiss the claim and, just in case the judge allows the case to proceed, an answer to the allegations. The answer points out the emergency room doctors don’t compete directly with orthopaedic surgeons. It also notes a ruling from the Colorado Board of Medical Examiners that supports the contention that emergency room doctors can refer patients to whomever they feel is best qualified.And attorneys for Orthopaedic Associates of Aspen and Glenwood Springs, a firm comprised of local bone and joint specialists, filed a straight answer to the allegations, with line-by-line answers to each and every assertion made by the plaintiffs. They did not file a motion to dismiss.The lawsuit was filed in federal district court in September by orthopaedic surgeons Dr. Gary Brazina and Dr. Stephen Nadler. Responses from all three entities being sued reject nearly every claim made by the plaintiffs and most of the definitions they use to outline their case.Both sides have a long way to go if they hope to reach a settlement, which doesn’t appear likely at the moment. When asked if talks between the two sides were under way, Aspen Emergency Medicine attorney Joe Feltus laughed. “No,” he said, “we’re not engaged or plan to be engaged in settlement discussions. We’ll want to see how the judge decides before considering that.”Brazina and Nadler, who moved to Aspen in 1996 and opened Aspen Orthopaedic and Sports Medicine, allege the defendants conspired to shut them out of the local market, first by making it difficult to gain credentials at the hospital and then by purposefully referring patients – except those unlikely to pay – away from them. Together, the defendants conspired to stifle competition in the market for bone doctors, Nadler and Brazina claim.AVH a public entityAt the heart of the hospital’s case for dismissal is the definition of “Aspen Valley Hospital.””AVH requests that the Court take judicial notice that its corporate name is `Aspen Valley Hospital District’ and that it is a governmental subdivision of the the State of Colorado, not a publicly-funded, non-profit corporation as alleged in the Complaint,” the hospital answer reads.In fact, all three defendants point out that Nadler, Brazina and their attorneys incorrectly identified the hospital’s status.AVH attorneys point out that the hospital has taxing authority similar to that of any city, county or school district, and state and federal laws specifically exempt government entities from antitrust suits.Early on in their legal arguments, the hospital’s attorneys cite a 1943 U.S. Supreme Court ruling that exempts state government from the Sherman Act, the law passed by Congress at the beginning of the century to break up monopolies such as Standard Oil, or more recently, AT&T. In the 1943 case, Parker vs. Brown, the court ruled there is “nothing in the language of the Sherman Act or in its history which suggests that its purpose was to restrain a state or its officers or agents from activities directed by the legislature.”The activities directed by the Colorado legislature that apply to this case, according to the motion, are contained in a 1986 law that broadened state health-care regulation.The lawsuit contends the doctors from Orthopaedic Associates – John Freeman, Thomas Pevney, Robert Hunter and Mark Purnell – took advantage of the peer review process, of which they were in charge, to smother competition from Brazina and Nadler. The hospital’s role in this plot, Brazina and Nadler allege, was to allow it to happen. By requiring peer oversight for 15 surgeries, instead of the six normally needed to gain credentials at the hospital, Brazina and Nadler maintain they lost a significant amount of potential business.Citing a 1986 ruling by Judge Finesilver of federal district court in Denver, however, the hospital attorneys note the law gives public hospitals authority to set up their own peer review systems and appoint peer review panels.Anti-competitive effects are a foreseeable outcome from a law that gives a public hospital district the authority to determine who is qualified to provide health care, Judge Finesilver wrote in his 1986 ruling. “These effects, however are the inevitable result of the state’s exercise of its police power for the welfare and protection of its citizens.”The hospital’s motion also points out that Brazina and Nadler’s complaints were never heard by the Committee on Anti-Competitive Conduct, a state board that hears complaints from physicians challenging anti-competitive actions similar to those alleged in this case. “Because they failed to seek administrative review … this court lacks jurisdiction over any of Plaintiffs’ claims, including the common law tort and contract claims,” the hospitals motion says.As for Brazina and Nadler’s charge that hospital administrators ignored a hospital policy requiring emergency room doctors to refer patients to the specialist who is “on-call,” the hospital argues that state law does not require it to enforce the policy.”Nothing in the relevant legislation supports Plaintiffs’ essential claim that they are entitled to a stream of referral without any discretion on the part of their peers making referrals,” notes AVH’s response.Discretion on referralsLike the hospital, the doctors who own Aspen Emergency Medicine – John Glismann, J. Stevens Ayers, Marion Berg and Christopher Martinez – argue that federal and state antitrust laws don’t apply to them, at least in this case. And a key to their argument is their duty to exercise discretion with referrals.In their motion to dismiss, the emergency room physicians point out they have nothing to gain through referrals, other than a reputation for making good referrals.”The antitrust laws were enacted to protect competition, not individual competitors, such as we have in this case, who, because of their own clinical shortcomings, failed to compete successfully to earn the referrals they wanted,” the motion reads.The Aspen Emergency Medicine (AEM) attorneys point out the call schedule is simply a safety net to ensure there is a specialist to call if a patient doesn’t have a local private doctor and the emergency medicine physician’s preferred specialist is not available.”When a patient comes to the emergency department,” the motion reads, “the proper inquiry for the emergency medicine physician is, `Who can provide the best care for this patient?’ – not `Who is next in line on the call schedule that the patient must see by default?’ “In the second part of their defense, the AEM attorneys answer, usually with a denial, each and every definition, assertion and charge in the original complaint.AEM attorney Feltus explained that definitions are a key part of any antitrust case, and a common bone of contention. In this particular case, Feltus said that some of the plaintiffs’ definitions are just wrong. With others, Feltus said he and his clients were not ready to accept the plaintiffs’ definitions.The answer points out that AEM owner John Glismann contacted the Colorado State Medical Board for clarification on the referral issue. The board’s reply would seem to back AEM’s defense:”It is the Board of Medical Examiner’s position that there is no statutory or medical standard that requires a physician to refer patients to the doctor on call.”Orthopaedic AssociatesThe response from Orthopaedic Associates of Aspen, the defendants with the most to gain by breaking federal and state antitrust laws, is the sparest.It doesn’t contain a motion to dismiss. It doesn’t directly challenge any of the definitions or assertions made by Brazina and Nadler. Nor does it attempt to explain the relationship between the hospital, the emergency room physicians, and the orthopaedic surgeons.Instead it simply provides an answer to each and every paragraph in the lawsuit.For example, in paragraph 42 of their complaint, Brazina and Nadler allege, “the practice of orthopedic medicine in the Aspen area is unique in that it is seasonal in nature and dependent on referrals from emergency room physicians of emergency orthopedic cases involving visitors to the Aspen area.”Orthopaedic Associates answer simply states, “Defendants deny the allegations of paragraph 42 of the Complaint.”With other paragraphs, the answer admits the allegations, or accepts the definition at hand, and with others it accepts parts of the allegation or definition and rejects others.In the formal defenses, where matters of law are directly addressed, Orthopaedic Associates’ attorneys focus on questions of harm to Brazina and Nadler and their case for filing the suit in the first place.”Plaintiffs have not suffered any injuries or damages to their business or property by any act or omission by Defendant Orthopaedic Associates of Aspen,” reads one defense.”Any acts or omissions of Defendant Orthopaedic Associates of Aspen and Glenwood … are legitimate business acts carried out in the ordinary course of their business and in furtherance of their business,” reads another.According to one attorney involved with the case, it could be two years before the case goes to trial, if it gets that far.
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