42 U.S.C. § 1981 prohibits discrimination affecting citizens rights to make contracts. In the credentialing field, § 1981 has been used to circumvent the immunities provided by the Health Care Quality Improvement Act (HCQIA) because HCQIA provides an express exception stating that it doesn’t apply to actions brought pursuant to Section 1981.

The premise is that adverse credentialing actions violate a physician’s right to make contracts. In states which recognize medical staff bylaws as contracts, that contractual opportunity is often the basis for a discrimination suit. However, in states that do not recognize medical staff bylaws as contracts, physicians must find other grounds.

In Sambasivan, Dr. Sambasivan alleged two grounds which the Washington State Appeals Court found sufficient to avoid summary judgment and allow a trial on the merits:

  • The hospital in question routinely granted physicians with clinical privileges the right to participate in call coverage arrangements pursuant to contracts that provide additional compensation; and
  • The court recognized that prospective patient relationships might also be contracts, and that denial of privileges would interfere with the physician’s opportunity to benefit from those contracts.

The Court specifically rejected the defense, asserted by the hospital, that Dr. Sambasivan could treat those patients at other hospitals, because Section 1981 protects a citizen’s right to enter into all contracts and the fact that a physician might have an alternative but comparable opportunity should not be recognized as a defense to discrimination actions.