The Tenth Circuit on Monday upheld the District of New Mexico’s decision to grant summary judgment to the health insurance provider defendants in an antitrust suit brought by a New Mexico physician practice.
The litigation began in 2012 when New Mexico Oncology and Hematology Consultants Ltd. (NMOHC) brought Sherman Act, state antitrust, and Racketeer Influenced and Corrupt Organizations Act claims against the defendants, Presbyterian Healthcare Services (PHS), Presbyterian Network Inc., Presbyterian Health Plans Inc. (PHP), and Presbyterian Insurance Co. None of the claims survived past the district court, but the plaintiff appealed only its Sherman Act claims of monopolization and attempted monopolization.
The relationship between the parties predates the proceedings by a decade. After NMOHC opened the New Mexico Cancer Center (NMCC) in 2002, NMOHC and PHP executed a services provider agreement, rendering the NMOHC an in-network provider for the PHP.
NMOHC’s appealed allegations argued that the defendants engaged in anticompetitive conduct through three practices: a benefit change that PHP implemented on its Medicare Advantage plan, which the plaintiff deemed a “mandate”; a purported “joint venture” between PHP and Radiology Associates of Albuquerque (RAA); and PHS’s physician referral policies, according to the court.
The benefit change in question allegedly stipulated that PHP would cover drugs addressing chemotherapy side effects only if they were bought from the defendant-affiliated Presbyterian Specialty Care Pharmacy, according to the plaintiff.
“To administer the drugs at the NMCC, NMOHC would have to accept shipments of the drugs from the Presbyterian Pharmacy at the NMCC, a process NMOHC calls ‘white bagging,’ which it refused to do,” the court explained, recounting the plaintiff’s claims. “NMOHC refused to accept these drugs on the grounds that its doctors did not know the sources of the medication, did not know if the Presbyterian pharmacy was appropriately handling the drugs, and did not know the timing of when the Presbyterian pharmacy would make any shipment.”
Similarly, the plaintiff had alleged that the “joint venture” between PHP and RAA forced PHP enrollees seeking breast cancer screenings to only use RAA for services, which then would automatically refer patients to PHS oncologists and surgeons “without consulting the patient’s physician,” the court explained.
The district court concluded that NMOHC failed to sufficiently plead that the defendants engaged in “exclusionary conduct” that would constitute anticompetitive practices under the Sherman Act. Further, it found that the plaintiff’s “refusal to deal” claim — stemming from the failure of the parties to negotiate new terms after their original services provider agreement expired because the defendant “demanded” a substantial payment reduction — did not show “the requisite willingness to forgo short-term profits for an anticompetitive end,” the circuit court said.
This court sided with the district court’s findings, affirming the summary judgment in favor of the defendants, despite the plaintiff’s argument that antitrust matters “should generally not be resolved on summary judgment due to the fact intensive nature of the claims.” The Tenth Circuit acknowledged that summary judgment should be used sparingly in antitrust cases but that “the usual rules” still apply in that NMOHC had the burden of properly showing a genuine factual dispute, which, according to the court, it failed to do.