The medical staff of Doctor's Hospital in Prince George's County settled a two-year-old dispute with the Federal Trade Commission yesterday by agreeing to "cease and desist" from engaging in anticompetitive actions.
The agreement, in which the doctors did not admit any violation of law, ends the FTC's investigation into allegations that the medical staff illegally tried to prevent an HMO run by George Washington University from opening a competing health clinic at a nearby Lanham shopping center.
The dispute stems from a decision in October 1985 by the George Washington HMO to open a facility in Prince George's County. At the time, both Doctor's Hospital and the George Washington HMO were owned by American Medical International (AMI), a California-based health care conglomerate.
Four months later AMI abandoned plans to open the clinic, deciding instead to let individual physicians within the HMO treat patients in their own offices.
The FTC said that decision was made because the medical staff of Doctor's Hospital threatened to force the hospital to close unless plans for the clinic were scrapped.
The FTC said that AMI's decision to treat HMO patients in private offices "did not offer advantages that the planned facility would have provided," and that the doctor's actions represented a violation of federal law.
In a statement filed in connection with the agreement, Chester A. Dilallo, president of the Doctor's Hospital medical staff, denied those charges "strongly, adamantly and unequivocally."
"The basic thrust of the FTC's allegations is that AMI, one of the largest hospital chains in the country, which last year had gross revenues in excess of several billion dollars, so feared offending physicians at this hospital that it changed its plans with regard to a clinic which it planned to open in the county," Dilallo said. "We believe this proposition is ridiculous."
Dilallo said the doctors "agreed to the consent agreement only because they did not have the financial resources to continue to fight the FTC charges in the courts."