Med. Ctr. at Elizabeth Place, LLC v. Premier Health Partners (Summary)

MANAGED CARE

Med. Ctr. at Elizabeth Place, LLC v. Premier Health Partners, No. 3:12-cv-26 (S.D. Ohio Aug. 30, 2012)

The United States District Court for the Southern District of Ohio denied a group of affiliated hospitals’ motion to dismiss a competing medical center’s suit that alleged that the hospitals had conspired to restrain trade in the market.  In the case, the hospitals were organized through a series of mergers and joint ventures that resulted in a collective market share of nearly fifty-five percent.  The complaining medical center, on the other hand, occupied only four percent of the market.  In its complaint, the medical center alleged that the hospitals had coerced managed care plan providers either to refuse the medical center access to their networks or to reimburse the medical center at below market rates.  Furthermore, the medical center alleged that the hospitals had prevented physicians from affiliating with the medical center.  This conduct, the medical center argued, diminished the medical center’s access to managed care contracts and foreclosed the medical center from the relevant market.

In its denial of the hospitals’ motion to dismiss, the court addressed three issues.  First, noting that joint ventures and other horizontal combinations are typically subject to per se review, the court concluded that the allegations raised an issue that is subject to the per se analysis under Section 1 of the Sherman Act.  Second, the court concluded that the medical center had sufficiently alleged that the hospitals operated independently and were therefore separate and distinct entities subject to Section 1 of the Sherman Act.  Third, the court concluded that the medical center’s implied assertion that the hospitals’ conduct had resulted in a price increase was a sufficiently pled antitrust injury to survive the hospitals’ motion to dismiss.  Accordingly, the court denied the hospitals’ motion to dismiss the medical center’s complaint.