establish an "antitrust injury" and that the Plaintiffs needed to show that the conduct stifled competition.
Cook v. Medical Savings Insurance Co.
10th Cir., No. 06-6233 Order and Judgment 7/22/08
The Tenth Circuit upheld a trial court jury award of $550,000 in compensatory and $550,000 in punitive damages,finding that Medical Savings Insurance Company (MSIC) committed fraud when it sold the Plaintiff an insurance policythat misrepresented the insurer's true reimbursement rate.In 2003, Cook purchased an MSIC insurance policy under the representation that MSIC would pay 100% of reasonable and customary medical expenses above the $5,000 deductible, up to $1 million. The policy defined"reasonable and customary charge" as the most common charge for particular services or supplies and includedseven factors MSIC could consider in determining the reasonableness of the charge. The policy failed to include thatMSIC would only pay the Medicare reimbursement rate plus 26% of billed charges for hospital bills totaling more than$3000.In 2004, when Cook underwent surgery and submitted a hospital bill for approximately $19,500, MSIC reimbursedCook the Medicare reimbursement rate plus 26%. Cook subsequently sued MSIC, alleging fraud, and breach of goodfaith and fair dealing when MSIC mishandled and refused to pay his insurance claims.At trial, the jury found that MSIC committed fraud and awarded Book $550,000 in compensatory and $550,000 inpunitive damages. On appeal, the Tenth Circuit upheld the verdict, finding (1) that the evidence presented wassufficient to support the jury's verdict and (2) that the jury's award was not excessive or so extreme as to "shock theconscience."
Dr. John Powderly II & Carolina Biooncology Institute, PLLC v. Blue Cross and Blue Shield of North Carolina
No. 3:08-cv-00109-W Western District of North Carolina
Defendant-Blue Cross and Blue Shield of North Carolina ("BCBSNC") filed a motion to reconsider in the WesternDistrict of North Carolina after the court denied its 12(b)(6) motion to dismiss. BCBSNC claimed that reconsiderationwas warranted because allegations pertaining to a monopsony claim - monopolistic conduct in the purchase of healthcare provider services -- were "completely absent" from the plaintiffs' complaint. Furthermore, BCBSNC claimed that itlacked the necessary market power as a purchaser of health care services for plaintiffs to plead a valid monopsonyclaim.The court, pursuant to law, liberally construed the allegations in the plaintiffs' complaint, and reiterated that its prior denial of BCBSNC's 12(b)(6) motion was based on the fact that the plaintiffs' complaint sufficiently plead factsamounting to a monopsony claim.The court relied on a complaint allegation that that BCBSNC is "by far the largest health insurance company in NorthCarolina" with a 60% market share. Furthermore, the court found that the plaintiffs' allegations of BCBSNC's marketpower permits, or perhaps implies, the possibility that BCBSNC exercises monopsony power over the supply of oncology services in relevant markets where plaintiffs are participants.Finally, the court notes the plaintiffs' allegation that BCBSNC's sixty percent share of sales of health insurance doesnot account for the substantial share by Medicare and Medicaid in the purchase of health services, the court foundthat evidence would be required on that issue since Medicare and Medicaid may perhaps not be considered part of the relevant market.The opinion did not address what conduct by BCBSNC was alleged to have improperly created or maintained itsalleged "monopsony" power, since merely exercising monopsony or monopoly power does not violate the antitrustlaws.
Little Rock Cardiology Clinic, P.A. v. Baptist Health, et al.
No. 4:06CV01594 JLH (E.D. Ark. 8/29/08)
An Arkansas federal court dismissed cardiologists' antitrust claims against an association of hospitals and severalinsurance companies later added as defendants. Little Rock Cardiology Clinic filed suit against Baptist Health, anonprofit corporation operating hospitals in Arkansas, alleging violations of the Sherman Act. Plaintiffs sought trebledamages and injunctive relief under the Clayton Act. Plaintiffs claimed that Baptist Health monopolized the market for cardiology services for privately insured patients in a sixteen counties in Arkansas.In 1997, plaintiffs became the only specialists excluded from FirstSource Network, used by Blue Cross health plansand its affiliates. In January 2006, they were allowed back into some portion of the network. Plaintiffs' filed their initialcomplaint on November 2, 2006, a second amended complaint about a year later, and a third amended complaint onMarch 27, 2008.The Court dismissed the majority of plaintiffs' claims on statute of limitations grounds. Plaintiffs argued their claimswere not time-barred because they alleged continuing antitrust violations within four years of the filing their complaintand second amended complaint. The Court drew a "critical distinction" between "'a violation which … must occur within some specific and limited time span' and 'conduct … which inflicted continuing and accumulating harm' on theplaintiff."
Crowell & Moring Managed Care Lawsuit Watch - Septembe...http://www.crowell.com/NewsEvents/Newsletter.aspx?id=10293 of 412/31/10 11:06 AM