Antitrust Law Daily Wrap Up, ANTITRUST—D. Colo.: Cigna cleared of surgical centers’ conspiracy, boycott claims, (Mar 22, 2016)

By Greg Hammond, J.D.

A health insurer and related companies were cleared of allegations that they violated the Sherman Act and Colorado Antitrust Act by refusing to pay out-of-network ambulatory surgical care centers for the medical treatment of the insurers’ plan members and by conspiring to drive the surgical centers from the market. The federal district court in Denver granted the insurers’ motion for summary judgment on the antitrust claims, finding that the surgical centers failed to provide evidence of antitrust injury (Arapahoe Surgery Center, LLC v. Cigna Healthcare, Inc., March 21, 2016, Martínez, W.).

Six ambulatory surgery centers (ASCs) filed suit, alleging that Cigna Healthcare, Inc. and related companies used their market power to pressure physicians and insurers to not do business with plaintiffs, in an effort to reduce competition for ambulatory surgery services. The alleged conspiracy constituted a concerted boycott to drive the plaintiffs’ facilities out of business, in violation of the Sherman and Colorado Antitrust Acts, according to the complaint. Cigna moved for summary judgment on the antitrust claims, arguing that the ASCs failed to present evidence of a conspiracy, an unlawful restraint of trade, or antitrust injury.

Antitrust injury. The court agreed that there was no evidence of an antitrust injury and therefore granted Cigna’s motion for summary judgment with regard to the antitrust claims. The evidence that the ASCs cited from their expert’s report consisted of generalized opinion regarding the lower cost of procedures at ASCs as compared to hospitals, including specific examples of business the ASCs lost as a result of Cigna’s actions, the court noted. This evidence, however, was insufficient on the issue of antitrust injury because there was no evidence that any of the plaintiff ASCs in this case have actually been excluded from the market.

Instead, the ASCs pointed to their expert’s opinions on increased costs to patients, the court noted. However, the expert did not reference any concrete instances of increases in costs to patients on which a jury could rely to find that such harm occurred or show that the costs necessarily, or even probably, increased in this case. The court therefore concluded that, without more, it would be unreasonable for a jury to take the large inferential step from the expert’s generalized opinions to find that patient costs increased as a result of anticompetitive activity in the instant action.

The case is No. 13-cv-3422-WJM-CBS.

Attorneys: Joe Ramon Whatley, Jr. (Whatley Kallas, LLP) for Arapahoe Surgery Center LLC, Cherry Creek Surgery Center LLC, and Hampden Surgery Center LLC. Edwin Packard Aro (Arnold & Porter LLP) and Joshua Simon (Kirkland & Ellis, LLP) for Cigna Healthcare Inc., Connecticut General Life Insurance Co., and Cigna Healthcare of Colorado Inc.

Companies: Arapahoe Surgery Center LLC; Cherry Creek Surgery Center LLC; Hampden Surgery Center LLC; Cigna Healthcare Inc.; Connecticut General Life Insurance Co.; Cigna Healthcare of Colorado Inc.

Cases: Antitrust ColoradoNews