Antitrust Law Daily Wrap Up, ANTITRUST NEWS: State medical board allegedly engaged in price fixing of Lyme disease treatments, (Feb 3, 2016)

By Linda O’Brien, J.D., LL.M.

The North Carolina Medical Board and several past and current board members engaged in price fixing and conspired to monopolize the market for the provision of medical services for the treatment of Lyme disease within the state, according to a complaint filed in the federal district court in Raleigh, North Carolina (Jemsek v. North Carolina Medical Board, February 2, 2016).

The North Carolina Medical Board is the state regulatory agency authorized to administer and enforce the licensing the practice of medicine in North Carolina. The Board is staffed by health care practitioners engaged in the private practice of medicine in the state. The plaintiff, Joseph Jemsek, practices medicine in Washington, D.C. His North Carolina license is currently inactive.

The complaint states that, in 2000, Jemsek started a clinic in Charlotte, North Carolina, and was issued a license by the Board. The focus of his practice was the treatment of individuals with chronic Lyme disease. Jemsek treated patients with long-term antibiotic regimens that did not fit the guidelines by the private organization Infectious Disease Society of America (IDSA) of not using long-term antibiotics beyond 28 days. However, Jemsek’s treatment regimens were recognized by the physician group, International Lyme and Associated Diseases Society (ILADS).

Jemsek asserts that the ILADS guidelines directly conflict with the Board’s business plan and with the restrictions sought by their health insurer payer, Blue Cross Blue Shield of North Carolina (BCBSNC). The IDSA guidelines place a time restriction element on the duration of treatment in order to save money on claims paid by BCBSNC.

Since opening his clinic, Jemsek had a provider agreement with BCBSNC that did not have a definitive medical policy regarding the use of long-term antibiotics to treat Lyme disease. Beginning in 2003, BSBCNC employees began applying a secret, undisclosed policy on the treatment of Lyme disease when determining and denying claims and deemed all courses of antibiotics more than 28 days to be medically unnecessary. Additionally, in 2005, BSBCNC became concerned at the costs associated with the long-term antibiotic treatment and circulated an internal memorandum targeting Jemsek as one of the top providers whom BCBSNC paid by volume reimbursement claims. Subsequently, BCBSNC adopted a blanket denial policy against claims regarding Jemsek’s treatment of Lyme disease, the complaint states.

According to the complaint, BCBSNC conspired with Janelle Rhyne, a board member and paid consultant to BCBSNC, and other board members to put Jemsek “out of business.” Specifically, Rhyne and the Board solicited complaints by patients who were participants in BCBSNC plans, and initiated sham investigations and disciplinary proceedings aimed at unreasonably restricting Jemsek’s medical services for treating Lyme disease. At the recommendation of the Board’s investigative and disciplinary committee, Jemsek was formally charged with misconduct and BCBSNC put a hold on all claims submitted by Jemsek and his clinic. According to the complaint, the conspiracy by the Board was further aimed at redistributing Jemsek’s patients to other North Carolina physicians who provided Lyme disease treatments in accordance with IDSA guidelines and helping boost BCBSNC’s financial bottom line by avoiding pay claims for long-term antibiotics treatment.

The complaint also alleges that, in August 2006, the Board issued a formal order that restricted Jemsek’s practice of medicine in North Carolina related to the treatment of Lyme disease by prohibiting the use of long-term regimens of antibiotics. Although Jemsek continued to practice medicine under the restrictions of the 2006 order, the Board further conspired to limit Jemsek’s competitive services by initiating a new sham investigation. Subsequently, the Board coerced Jemsek to place his license on inactive status and abandon his practice in North Carolina in order to avoid further discipline. As a result of the defendants’ misconduct, Jemsek suffered tremendous financial losses and was forced to move out of the state. In June 2014, Jemsek discovered from court documents in the form of an affidavit by Rhyne that she and other board members conspired to unreasonably restrict his practice of medicine for their own financial gain.

Jemsek asserts claims for violations of Sections 1 and 2 of the Sherman Act. The action seeks declaratory and injunctive relief, and any other just and proper relief.

The case is No. 4:16-cv-00014-D.

Attorneys: Jacques G. Simon (Law Offices of Jacques G. Simon) and Robert Meynardie (Meynardie & Nanney, PLLC) for Joseph Jemsek.

Companies: North Carolina Medical Board

News: Antitrust NorthCarolinaNews