In an opinion written by Judge Posner, the Seventh Circuit on Friday, June 9, 2017, affirmed OSF Saint Francis Medical Center’s summary judgment win in a $300 million antitrust suit brought by a smaller competitor alleging unlawful exclusive dealing and attempted monopolization. This alert discusses the Court’s decision in this case, which is a notable precedent for hospitals and provider networks — particularly those with substantial market shares — that wish to negotiate narrow and exclusive network agreements with payors.
On March 30, 2017, in a closely watched case, a federal district court denied the Motion for Judgment on the Pleadings filed by Carolinas Healthcare against a Complaint filed by the DOJ Antitrust Division and the State of North Carolina. The Complaint alleged that Carolinas Healthcare insisted on contract provisions with payors that limited or prohibited steering to lower-cost providers. In its motion, Carolinas Healthcare relied heavily on the Second Circuit decision in United States v. American Express Co., 838 F.3d 179 (2d Cir. 2016), where the Second Circuit had reversed a trial verdict condemning steering restrictions in Amex’s contracts with merchants. This alert reviews the court’s ruling and considers its implications for future health care antitrust cases.
A popular weapon used to contain health care expenditures is the creation by payors and employers of tiered provider networks, which by differentiated co-pays attempt to steer insureds to less expensive choices. In connection with such networks, providers will often provide better pricing in order to be placed on more favorable tiers. In a new antitrust suit, the Antitrust Division of the Department of Justice (“DOJ”) and the State of North Carolina have challenged the attempt by the dominant health care system in North Carolina to use contractual anti-steering provisions to avoid being disfavored. This Alert analyzes the Government’s complaint and how this lawsuit fits into the DOJ’s views of contractual restraints of this type.
On January 24, 2014, a federal district court judge validated the trend of recent increased Federal Trade Commission (FTC) scrutiny of physician practice consolidations and acquisitions by upholding the agency’s antitrust challenge to the St. Luke’s Health System (St. Luke’s) 2012 acquisition of Saltzer Medical Group (Saltzer). In this decision, the court ordered a divestiture remedy by requiring St. Luke’s to unwind its acquisition of Saltzer. Although it applauded St. Luke’s for its attempt to improve health care delivery through the transaction, the court nonetheless held that “there were other ways to achieve the same effect that do not run afoul of the antitrust laws.”
On September 7, 2012, the health policy peer-review journal, Health Affairs, sponsored a day-long briefing at the National Press Club to showcase its September issue, “Payment Reform to Achieve Better Health Care.” Throughout the day, prominent academics, government officials, representatives of health care providers, and commercial insurer executives discussed their research and recommendations regarding alternative payment structures designed to increase quality of care, promote better health outcomes, and reduce costs. See this announcement for a complete list of the speakers, including authors from the September issue and their articles discussed at the briefing. Continue Reading Health Affairs Briefing Speakers Discuss Payment Reform Research