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Kenney v. American Board of Internal Medicine

United States District Court, E.D. Pennsylvania

September 26, 2019

GERARD KENNEY, ALEXA JOSHUA, GLEN DELA CRUZ MANALO, and KATHERINE MURRAY LEISURE, Plaintiffs,
v.
AMERICAN BOARD OF INTERNAL MEDICINE, Defendant.

          MEMORANDUM

          ROBERT F. KELLY, SR. J.

         Plaintiffs Gerard Kenney (“Kenney”), Alexa Joshua (“Joshua”), Glen Dela Cruz Manalo (“Manalo”), and Katherine Murray Leisure (“Murray”) (collectively, “Plaintiffs”) bring this action against Defendant American Board of Internal Medicine (“ABIM”) alleging violations of Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1–2, the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1962(c), and a claim of unjust enrichment.

         ABIM moves to dismiss the Amended Complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). Plaintiffs filed a Memorandum of Law in Opposition to ABIM’s Motion and ABIM filed a Reply in Support.

         For the reasons noted below, ABIM’s Motion to Dismiss the Amended Complaint is granted.

         I. BACKGROUND [1]

         A. Initial Certification and Maintenance of Certification Market

         Licenses to practice medicine in the United States are granted by the medical boards of individual states. (Am. Compl. ¶ 18.) To obtain a license, a physician is required to, among other things, have a medical degree and to pass the United States Medical Licensing Examination (“USMLE”), a three-step examination for medical licensure sponsored by the Federation of State Medical Boards (“FSMB”) and the National Board of Medical Examiners (“NBME”). (Id.) According to the USMLE website, the examination “assesses a physician’s ability to apply knowledge, concepts, and principles, and to demonstrate fundamental patient-centered skills, that are important in health and disease and that constitute the basis of safe and effective patient care.” (Id. ¶ 19.)

         Most states require physicians to periodically complete continuing medical education courses (“CME”) to remain licensed. (Id. ¶ 20.) According to the website of the Accreditation Council for Continuing Medical Education (“ACCME”), which accredits organizations that offer continuous medical education, CME “consists of educational activities which serve to maintain, develop, or increase the knowledge, skills and professional performance and relationships that a physician uses to provide services for patients, the public, or the profession.” (Id.)

         ABIM offers its own certification. Its certification “demonstrates that physicians have completed internal medicine and subspecialty training and have met rigorous standards through intensive study, self-assessment and evaluation” and “encompasses the six general competencies established by the Accreditation Council for Graduate Medical Education.” (Id. ¶ 21.) Approximately 80% of internists, and almost all practicing internists, purchase initial ABIM certifications. (Id.) Those who do not include researchers, teachers, academics, and others who may not regularly treat patients. (Id.)

         To obtain initial ABIM board certification, a physician must, among other things, pass an ABIM-administered examination. (Id. ¶ 22.) ABIM first began selling initial certifications in 1936. (Id.) No. state requires an initial ABIM certification for an internist to obtain a license to practice medicine. (Id.)

         At the start, ABIM certifications were lifelong and no subsequent examinations or other requirements were imposed by ABIM on internists. (Id. ¶ 24.) However, in or about 1974, ABIM devised a voluntary Continuous Professional Development Program (“CPD”) for ABIM-certified internists as a complement to its initial board certification. (Id. ¶ 25.) The first CPD examination was administered by ABIM in 1974. (Id.) Only 3, 355 internists took the voluntary examination. (Id.) In 1977, just 2, 240 internists took the second voluntary CPD examination. (Id.) Only 1, 947 internists took the third voluntary examination in 1980. (Id.)

         Faced with declining participation, and the resulting drop in enrollment fees paid by internists for the voluntary examinations, ABIM announced that it would no longer issue lifelong certifications and would, instead, require internists to take subsequent must-pass examinations. (Id. ¶ 26.) By no later than 1990, ABIM issued only time-limited initial certifications and forced internists to take new, must-pass examinations every ten years or lose their ABIM certification. (Id.) However, physicians that purchased ABIM initial certifications prior to 1990 were “grandfathered” in and exempt from purchasing these Maintenance of Certification products (“MOC”). (Id. ¶ 27.) ABIM still considers these pre-1990 certified internists “certified.” (Id.)

         In January 2006, ABIM imposed changes to MOC. (Id. ¶ 31.) Internists were now also required to accumulate 100 “MOC points” every ten years by completing medical knowledge and practice performance processes, which resulted in substantial additional MOC fees for ABIM. (Id.) No. other organization or entity offered competing maintenance of certification for internists at this time. (Id.) ABIM continued to exempt “grandfathered” internists from the requirement to purchase MOC and continued to report them as “Certified.” (Id.) In 2014, in addition to the must-pass examination every ten years, ABIM-certified internists were required to complete an “MOC activity” every two years and a patient safety and patient survey module every five years. (Id. ¶ 32.) They were also required to accumulate 100 MOC points every five years, instead of the original ten. (Id.)

         These changes resulted in substantial additional indirect costs to internists in terms of time taken away from their practice, patients, and families. (Id. ¶ 33.) ABIM-certified internists were now also required to “enroll” in MOC. (Id.) If they did not, ABIM reported them on its website as “Not Meeting MOC Requirements.” (Id.) No. other organization or entity offered competing MOC for internists at this time. (Id.) ABIM continued to exempt “grandfathered” internists from the requirement to purchase MOC and continued to report them as “Certified.” (Id.)

         In 2018, ABIM changed MOC once again. (Id. ¶ 34.) Internists are now required to pay an annual program fee to participate in MOC ($160 in 2019 if paid in the year due), in addition to paying an “assessment fee” for MOC examinations. (Id.) Those purchasing MOC for internal medicine now have the option of taking a “Knowledge Check-In” test every two years or the single “traditional” must-pass examination every ten years, both of which are now “open-book.” (Id.) ABIM is phasing in the “Knowledge Check-In” option for subspecialties over the next three years. (Id.)

         Currently, internists who have not purchased MOC from ABIM are reported on ABIM’s website as “Not Certified, ” even though they purchased an initial ABIM certification. (Id. ¶ 35.) ABIM, however, reports “grandfathered” internists as “Certified” even though they do not participate in MOC solely because they purchased an initial ABIM certification before 1990. (Id.) Allegedly, “grandfathered” internists who have voluntarily taken and failed MOC examinations are still reported by ABIM as “Certified.” (Id.)

         One analysis projected that complying with MOC costs internists an average of $23, 607 in money and time over a ten year period, with costs up to $40, 495 for some specialists, and that “[t]he 2015 MOC is projected to cost $5.7 billion [internal reference omitted] over the coming decade” from 2015 to 2024, including time costs resulting from 32.7 million physician hours. (Id. ¶ 36.)

         Hospital care is the largest component of health care spending in the United States, accounting for more than $1 trillion a year. (Id. ¶ 38.) The second largest component is physician and clinical services, many of which are now provided by hospitals. (Id.) Allegedly, with the assistance and encouragement of ABIM, and/or persons affiliated with ABIM, many hospitals have adopted bylaws mandating that physicians purchase MOC. (Id.) This is magnified in hospital markets that are highly concentrated, i.e., those markets with fewer and typically larger hospitals. (Id.) Approximately 77% of Americans living in metropolitan areas are in hospital markets considered highly concentrated. (Id.)

         MOC has become increasingly mandatory for internists across the country. (Id. ¶ 37.) Plaintiffs and other internists are required by many hospitals and related entities, insurance companies, medical corporations, and other employers to be ABIM-certified to obtain hospital consulting and admitting privileges, reimbursement by insurance companies, employment by medical corporations and other employers, malpractice coverage, and other requirements of the practice of medicine. (Id.) To create incentive for internists to purchase MOC, ABIM also obtained, as part of the Affordable Care Act, a temporary 0.5% Medicare payment incentive for doctors participating in MOC. (Id.) As a result of these and other circumstances described herein, ABIM-certified internists are forced to purchase MOC or suffer substantial economic consequences. (Id.)

         As an example, many Blue Cross Blue Shield companies (“BCBS”), again with the alleged assistance and encouragement of ABIM, and/or persons affiliated with ABIM, require physicians to participate in MOC to receive a panel of patients in their plans or be included in their networks. (Id. ¶ 39.) Patients of internists that do not purchase MOC have been told that their physicians are no longer preferred providers and that they should look for another primary care doctor. (Id.) In addition, patients whose internists have been denied coverage by BCBS because they have not complied with ABIM’s MOC requirements, are typically required to pay a higher “out of network” coinsurance rate (for example, 10% in network versus 30% out of network) to their financial detriment. (Id.) Nearly one in three Americans have BCBS coverage, and nationwide 96% of hospitals and 92% of physicians are in-network with BCBS. (Id.)

         No state requires ABIM certification for an internist to be licensed. (Id. ¶ 41.) Almost thirty years after ABIM’s action to require internists to purchase MOC, no evidence-based relationship has been established between MOC and any beneficial impact on physicians, patients, or the public. (Id. ¶ 42.) This is in marked contrast with the evidence-based medicine (“EBM”) practiced today. (Id.) EBM optimizes medical decision-making by emphasizing the use of evidence from well-designed and well-conducted research. (Id.) That there is no evidence of an actual causal relationship between MOC and any beneficial impact on physicians, patients, or the public is supported by the facts that: (1) ABIM does not require those it has “grandfathered” to comply with MOC, and (2) according to its website, even ABIM’s own recently-funded research only “suggest[s] that MOC is a marker of care quality . . . .” (Id. ¶ 43.) Indeed, at least two ABMS member websites currently include the following statement: “Many qualities are necessary to be a competent physician, and many of these qualities cannot be measured. Thus, board certification is not a warranty that a physician is competent.” (Id.)

         The American Medical Association (“AMA”) has adopted “AMA Policy H-275.924, Principles on Maintenance of Certification (MOC), ” which states, among other things, that “MOC should be based on evidence, ” “should not be a mandated requirement for licensure, credentialing, reimbursement, network participation or employment, ” should be relevant to clinical practice, ” “not present barriers to patient care, ” and “should include cost effectiveness with full financial transparency, respect for physician’s time and their patient care commitments, alignment of MOC requirements with other regulator and payer requirements, and adherence to an evidence basis for both MOC content and processes.” (Id. ¶ 46.)

         Plaintiffs contend that the product markets relevant to this action are the market for initial board certification of internists and the market for maintenance of certification of internists, while the relevant geographic market is the United States. (Id. ¶¶ 47–48.) ABIM’s website makes clear that, except for those “grandfathered” by ABIM, certifications “must be maintained through ABIM’s MOC programs.” (Id. ¶ 44.) By requiring internists to purchase MOC to remain certified, ABIM supposedly created a wholly new and artificial market for MOC that has generated substantial fees for ABIM. (Id.)

         According to ABIM’s 2016 Form 990 filed with the Internal Revenue Service, MOC “means something different from initial certification” and “speaks to the question of whether or not an internist is staying current with knowledge and practice in his/her discipline” and is “anchored in whether a physician is meeting a performance standard.” (Id. ¶ 53.) Thus, MOC serves substantially the same function as CME. (Id. ¶ 54.) Indeed, MOC points are granted for some contracted external CME activities from subspecialty societies. (Id.) Likewise, completion of some MOC education modules might count towards a physician’s state licensure CME requirement. (Id.) Importantly, however, MOC differs from CME because if physicians do not see value in particular CME courses they are free to purchase other CME offerings; there is no such meaningful option regarding MOC. (Id.)

         Beginning in or about 1990, all internists purchasing initial ABIM certifications have been required to purchase MOC or have their certification terminated by ABIM. (Id. ¶ 49.) Initial ABIM certification is required by ABIM to purchase MOC. (Id.) Throughout the relevant period, ABIM has controlled the market for initial certification of internists in the United States. (Id. ¶ 50.) There are high barriers to entry in the market for initial certification, including technical, economic, and organizational barriers, as demonstrated by the fact that no other organization or entity has ever offered meaningful competing initial certifications for internists. (Id.) According to Plaintiffs, ABIM has the market power in the market of initial certification of internists and has used that power to unlawfully tie its MOC products. (Id. ¶¶ 51–52.)

         However, internists have a desire to obtain MOC from providers other than ABIM, but have been almost entirely unsuccessful as a result of ABIM’s alleged illegal tying and unlawful and exclusionary use of its monopoly power. (Id. ¶ 55.) The National Board of Physicians and Surgeons (“NBPAS”) was established in or about January 2015 to provide a competing MOC product to physicians. (Id. ¶ 56.) Its product extends to physicians practicing in all twenty-four ABMS specialties, including internal medicine. (Id.) NBPAS does not offer initial certifications to internists or any other physicians, but only MOC. (Id.)

         To obtain MOC from NBPAS, a physician must, among other things, have at one time held a certification from an ABMS member board, hold a valid state license to practice medicine, and complete at least fifty hours of accredited CME within the past twenty-four months (or one hundred hours if an ABIM certification has lapsed). (Id. ¶ 57.) NBPAS fees are vastly lower than those charged by ABIM for MOC, and NBPAS MOC requires vastly less physician time. (Id.) In 2017, NBPAS fees were less than 15% of the fees assessed by ABIM for MOC and required much less administrative time for registration. (Id.)

         According to Plaintiffs, the fact that NBPAS offers MOC, but not initial certification further establishes that the two markets are separate. (Id. ¶ 58.) NBPAS has had very limited success. (Id. ¶ 59.) In 2016, there were over 10, 000 hospitals in the United States, including both those registered with the American Hospital Association (“AHA”) and community hospitals, however, as of September 2, 2018, only 91 hospitals, less than one percent, accepted NBPAS maintenance of certification, and not a single insurance company is known to accept NBPAS. (Id.) In addition, ABIM does not recognize NBPAS maintenance of certification. (Id.) Upon information and belief, organizations in addition to NBPAS, have considered entering, or sought to enter, the market for MOC services. but have been unsuccessful because of the monopoly power and unlawful exclusionary conduct of ABIM. (Id. ¶ 60.)

         Allegedly, ABIM is illegally tying its initial certification to MOC. (Id. ¶ 61.) As a direct and proximate result, Plaintiffs allege that they and other internists have been forced to purchase MOC from ABIM since at least 1990 or lose their ABIM certifications. (Id. ¶¶ 61, 65.) ABIM also allegedly created and maintained unlawful monopoly power for MOC by requiring internists to purchase MOC or lose their ABIM certification. (Id. ¶ 62.) According to Plaintiffs, ABIM has induced hospitals and related entities, insurance companies, medical corporations, and other employers to require internists to be ABIM-certified to obtain hospital consulting and admitting privileges, reimbursement by insurance companies, employment by medical corporations and other employers, malpractice coverage, and other requirements of the practice of medicine. (Id. ¶ 63.)

         ABIM is governed by a board of directors that includes active participants in the market for internists’ services and related markets. (Id. ¶ 71.) Plaintiffs allege that ABIM’s restraint on competition in the market for internists’ services, demonstrated conflicts of interests, and private anticompetitive motives force internists, other than those “grandfathered” by ABIM, to purchase MOC or lose their ABIM certification. (Id.)

         B. Background of Named Plaintiffs

         1. Gerard Francis Kenney, MD

         Kenney entered private practice in 1995 as a partner in Digestive Health Specialists, Inc. (“Digestive Health”) in Seneca, Pennsylvania, and has been practicing gastroenterology for almost 25 years. (Id. ¶ 74.) Gastroenterologists diagnose and treat digestive disorders, such as stomach pain, ulcers, reflux, and Crohn’s disease. (Id.) He served as President of the Venango County Medical Society and Councilor (Region I) of the Pennsylvania Society of Gastroenterology. (Id.) Kenney is a member of, among other professional associations, the American Gastroenterological Association and the American College of Gastroenterology. (Id.)

         Kenney obtained an initial board certification in internal medicine from ABIM in 1993, and a gastroenterology subspecialty certification in 1995. (Id. ¶ 75.) ABIM did not “grandfather” these initial certifications because they were purchased after 1990. (Id.) Kenney later passed MOC examination in gastroenterology in 2007. (Id.) Allegedly, a ...


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