Antitrust Law Daily Wrap Up, TOP STORY—D. N.M.: Cancer treatment facility failed to show antitrust injury in monopolization claims against health system, (Mar 16, 2016)

By Linda O’Brien, J.D., LL.M.

A cancer treatment facility lacked standing to pursue monopolization claims against a healthcare system and its affiliated health plan provider for allegedly using their dominance in the market for inpatient hospital services to force the facility out of the market for comprehensive oncology services, the federal district court in Santa Fe, New Mexico has ruled (New Mexico Oncology and Hematology Consultants, Ltd. v. Presbyterian Healthcare Services, March 16, 2016, Vazquez, M.).

New Mexico Oncology and Hematology Consultants, Ltd. (NMOHC) is an integrated, comprehensive cancer treatment facility that offers patient services at a free standing cancer center. Presbyterian Healthcare Services (PH) owns and operates eight acute care hospitals in New Mexico and offers a full range of services, including comprehensive oncology services. PH is also the parent company of Presbyterian Network, Inc. (PHP), which operates various health maintenance organizations (HMOs), preferred provider organizations (PPOs), and other health insurance products.

NMOHC filed a complaint against PH and PHP, alleging monopolization and attempted monopolization claims under Section 2 of the Sherman Act. Specifically, NMOHC claimed that the defendants used their dominance in the market for private health insurance and inpatient hospital services to drive the plaintiff out of the market for comprehensive oncology services. In August 2014, the court denied the defendants’ partial motion to dismiss the antitrust claims relating to the defendants’ monopoly in the private health insurance market. Before the court was the defendants’ partial motion to dismiss the claims relating to the defendants’ monopoly in the inpatient hospital services market.

Antitrust injury. The court found that NMOHC lacked standing to assert a monopolization claim in the market for inpatient hospital services. According to the court, the plaintiff’s monopolization claim was based on an alleged monopoly in the inpatient hospital services market. However, NMOHC’s complaint did not set forth how PH was monopolizing the market, sufficiently allege a causal connection between the monopolization and any antitrust injury, or adequately define PH”s market share for inpatient hospital services beyond the number of patients admitted to the defendants’ hospitals.

Additionally, the plaintiff’s allegations that the defendants discouraged or interfered with physician referrals to NMOHC did not specify whether the physicians were making referrals through the hospital’s inpatient or outpatient services. Allegations that the defendants offered financial incentives to physicians who refused to refer patients to NMOHC and altered their internal computer system to interfere with the processing of referrals to NMOHC also did not specify whether the incentives or alteration related to inpatient or outpatient services. Moreover, the plaintiff did not allege that the defendants used their large number of hospital beds to bolster their oncology clinic and drive out the plaintiff’s oncology services. Since the alleged exclusionary conduct did not pertain to the defendants’ alleged monopoly in inpatient services and there was no causal connection between the alleged monopoly and the plaintiff’s injury, the plaintiff failed to establish an antitrust injury, the court concluded.

The case is No. 12-00526.

Attorneys: Brian P. Jakulevicius (Law Office of George M. Sanders, PC) for New Mexico Oncology and Hematology Consultants, Ltd. Bruce D. Hall (Rodey Dickason Sloan Akin & Robb PA) and Douglas E. Litvack (Jones Day) for Presbyterian Healthcare Services and Presbyterian Network, Inc.

Companies: New Mexico Oncology and Hematology Consultants, Ltd.; Presbyterian Healthcare Services; Presbyterian Network, Inc.

MainStory: TopStory Antitrust NewMexicoNews