sherman act – Duane Morris Health Law

May 8, 2024May 8, 2024 by Seth A. Goldberg

Health Insurance Price-Fixing Cartel Alleged Against Multiplan and Insurers

Providers in a putative class action filed on May 7, 2024, claim that Multiplan and certain named insurers in its network are a “cartel” that has agreed to underprice out-of-network reimbursement paid to providers in the Multiplan network in violation of federal antitrust laws. The Complaint, filed in the District of Illinois as Live Well Chiropractic PLLC, et al. v. Multiplan, Inc., et al., (D. IL Civ. No. 1:24-cv–3680), alleges that Multiplan uses an algorithm that Multiplan clams “reprices” OON services based on historical reimbursements to providers providing the same services, and then “overrides” that amount to pay lower rates agreed upon by Multiplan and the insurers. According to the Complaint the insurers, who are allegedly horizontal competitors, provide competitively sensitive information about their reimbursement that they would not provide in a competitive market, and many serve on a Multiplan advisory board that meets in furtherance of the conspiracy to fix prices. A key component of the alleged price-fixing is Multiplan’s requirement that providers in its network agree not to balance bill patients for payments not made by the insurers. The Complaint alleges that Multiplan and the insurers have made billions off the alleged anticompetitive conduct, and seeks damages and injunctive relief.

April 12, 2016April 12, 2016 by Seth A. Goldberg

Wound Company’s Antitrust Claim Tossed

Having dismissed the Sherman Act Section 1 conspiracy and Section 2 monopolization claims of Suture Express in August 2013, a federal judge in Kansas, on April 11, 2016, tossed the remainder of plaintiff’s $200 million claim, which asserted that Cardinal Health and Owens & Minor, wound care companies, entered into a predatory pricing scheme to prevent hospitals from buying the plaintiff’s competing products. Suture Express, Inc., v. Cardinal Health, Inc., et al., 2:12-cv-02760.

The court determined that the summary judgment record did not demonstrate an injury to competition in the acute care market resulting from defendants’ alleged pricing arrangement, as the plaintiff failed to establish that defendants had market power. Rather, according to the court, the record on summary judgment demonstrated a competitive market, where a number of defendants’ rivals have been able to grow their businesses and compete effectively against defendants, while defendants’ market shares have remained relatively stable; in fact, the court found that defendants’ themselves competed against one another.

In dismissing the case, the court noted, as courts usually do in cases where the record demonstrates, at most, an injury only to the plaintiff, the antitrust laws were designed to protect competition not competitors, and the failure to demonstrate an injury to competition in the market is fatal to a plaintiff’s Sherman Act claims.

Although, as this case shows, antitrust defendants may have to endure lengthy and expensive litigation, experienced antitrust counsel, familiar with the deep and growing body of defense-oriented antitrust decisions, have a number of arrows in their quiver for shooting down antitrust claims.

January 27, 2016 by Seth A. Goldberg

Dental Providers and Labs Allege Antitrust Conspiracy

Dental and orthodontic practices and dental laboratories around the U.S. are being represented in class actions filed this week in federal courts in Texas and New York, see, e.g., Comfort Care Family Dental, P.C. et al v. Henry Schein, Inc. et al, 1:16-cv-00282 (E.D. NY), that claim defendants Henry Schein, Inc., Patterson Companies, Inc., and Benco Dental Supply Company (“Benco”), alleged to be the dominant dental product distributors in the U.S., together controlling over 80% of the national market for the distribution of dental supplies and dental equipment, conspired to boycott competitors in that market in violation of Section 1 of the Sherman Act.

The Comfort Care complaint asserts that Defendants’ conduct constitutes a horizontal group boycott that resulted in either a per se violation of Section 1 or a violation of the Sherman Act under the “rule of reason,” and alleges that Defendants “frequently communicated with each other at in-person meetings, via electronic mail and texts, and through phone calls” to collectively respond to new competitors and pressure dental associations as part of the group boycott. The Comfort Care complaint also provides economic information purporting to demonstrate that the alleged market is highly concentrated, has high barriers to entry, and has experienced increased pricing despite static or declining demand, all of which support the claim of anticompetitive conduct.

In addition to the private antitrust actions, as the Comfort Care complaint alleges, various state AGs and the FTC are investigating Defendants’ conduct as well, and Benco has already agreed to a consent judgment with the Texas AG pertaining to some of the conduct at issue in the private actions.

April 6, 2015April 6, 2015 by Seth A. Goldberg

Specific Facts Suggest Hospitals and Insurers Agreed to Group Boycott

A per se violation of Section 1 of the Sherman Act, 15 U.S.C. § 1, generally requires an agreement among horizontal competitors that unreasonably restrains trade. To withstand a motion to dismiss, a Section 1 plaintiff must allege facts that suggest direct of evidence of an agreement among the defendants, as opposed to alleging facts that merely are consistent with parallel conduct. These principles have been referred to by some courts as creating a heightened pleading standard for Section 1 claims.

In Arapahoe Surgery Center, LLC, et al. v. Cigna Healthcare, Inc., et al., 2015 U.S. Dist. Lexis 28375 (D. CO.), the Colorado District Court determined that the plaintiffs’ allegations of a group boycott were sufficient to meet the pleading requirements under Section 1, and therefore denied a motion to dismiss filed by three insurance carrier defendants. The specificity of the factual allegations concerning the agreement among the defendants, and the acts in furtherance thereof, underscore the importance of antitrust compliance in the healthcare and health insurance industries. Continue reading “Specific Facts Suggest Hospitals and Insurers Agreed to Group Boycott”

April 25, 2012August 21, 2014 by Philip H. Lebowitz

Antitrust Laws No Help to Excluded Physicians

When physicians are excluded from medical staff privileges because the hospital has entered into an exclusive agreement with other physicians, the element of “exclusion” often raises the suggestion that somehow the antitrust laws are implicated and competition has been adversely affected. The recent opinion of the United States Court of Appeals for the Third Circuit in Bocobo v. Radiology Consultants of South Jersey, P.A., et al. , No. 07-3142 (3d Cir. April 13, 2012)(not precedential), explains why the antitrust laws do not afford a remedy to an excluded physician when a hospital contracts with a provider group that does not include the plaintiff physician.

Continue reading “Antitrust Laws No Help to Excluded Physicians”