Antitrust Law Daily Wrap Up, ANTITRUST—D. P.R.: Claims against workers compensation fund over restrictions on chiropractors proceed, (Sep 11, 2015)

By Linda O’Brien, J.D., LL.M.

A group of chiropractors and chiropractic clinics could pursue claims against the state workers compensation fund for allegedly conspiring with hospitals and medical doctors to adopt discriminatory and anticompetitive guidelines that excluded chiropractic treatment from medical and health services provided by the fund, the federal district court in San Juan, Puerto Rico had decided. Thus, the fund’s motion to dismiss was denied (Rivera-Nazario v. Corporacion del Fondo del Seguro del Estado,September 9, 2015, Garcia-Gregory, J.).

Background. Corporacion del Fondo del Seguro del Estado (CFSE), a public corporation, is the state insurance fund that provides compensation and medical services to workers injured in the course of their employment. The CFSE is governed by an administrator and an Industrial Medical Council, a majority of which are medical doctors. CFSE contracts with numerous healthcare providers to deliver and administer medical services to injured workers of insured employers.

In July 2014, a group of licensed chiropractors and chiropractic clinics filed suit against CFSE and several CFSE directors and officials, alleging in part that the CFSE conspired with hospitals, medical doctors, and clinics to severely restrict or eliminate the chiropractic practice from medical and health services provided by the state insurance fund in violation of Sections 1 and 2 of the Sherman Act. Specifically, the chiropractors alleged that in 2013 the CFSE adopted new guidelines and policies regarding chiropractic services and patients referrals, which limited patient referrals to chiropractors after the treatment was approved by their primary care physicians. The defendants moved to dismiss the complaint.

State action doctrine. The state action doctrine, set forth in the U.S. Supreme Court decision, Parker v. Brown, 317 U.S. 341 (1943), provides immunity from federal antitrust laws to a State which imposes market restraints as an act of government. A state subdivision invoking Parker immunity has the burden to show that it acted pursuant to a clearly articulated state policy and was actively supervised by the state, the court explained.

The plaintiffs argued that the individual defendants were engaged in the private practice of medicine in areas of specialization that directly compete with chiropractic services in the healthcare market. The defendants responded that CFSE was actively supervised by the state because it was restricted in the types of actions it could undertake.

In denying the defendants’ motions to dismiss, the court found that, although it was clear that individuals could quality for Parker immunity, it was unclear from the defendants’ motions to dismiss whether they were claiming that only CFSE would benefit from such immunity in this case. The defendants’ argument that Section 1 of the Sherman Act did not reach unilateral conduct and a corporation and its officers could not engaged in concerted conduct since they were deemed to be the same legal entity was lacking in substance. Furthermore, without specificity or analysis, the defendants’ contention that the plaintiffs failed to sufficiently plead that the defendants’ actions in limiting the number of compensated referrals violated antitrust law was conclusory and without substance.

The case is No. 14-1533 (JAG).

Attorneys: Alberto G. Estrella (Estrella, LLC) for Dr. Luis B. Rivera-Nazario. Luis E. Pabon-Roca (Faccio & Pabon Roca) and Michael C. McCall (Law Office Of Michael C. McCall) for Corporacion del Fondo del Seguro del Estrado.

Companies: Corporacion del Fondo del Seguro del Estado

Cases: Antitrust PuertoRicoNews