418 F.Supp.3d 826
D.N.M.2019Background
- Plaintiff NMOHC is an independent, physician‑owned oncology practice operating the New Mexico Cancer Center; Defendants are Presbyterian Healthcare Services (PHS), its insurer Presbyterian Health Plan (PHP), and related entities forming an integrated multi‑market system.
- PHS developed its own comprehensive cancer program and PMG (Presbyterian Medical Group); PHP is a major local insurer with significant market share in commercial and Medicare Advantage plans.
- Negotiations between NMOHC and PHP (original contract from 2003) stalled in 2008–2010; PHP sought substantial drug/reimbursement reductions but the 2003 “evergreen” contract remained in effect.
- PHP/ PHS implemented enterprise strategies to capture oncology volume: referral‑management software, a PMG referral guide, nurse‑navigator program, and a 2012 Medicare Advantage “Mandate” directing certain injectable drugs to Presbyterian Specialty Care Pharmacy (CMS approved the Mandate).
- NMOHC sued under Section 2 of the Sherman Act and the New Mexico Antitrust Act (monopolization and attempted monopolization), plus state tort claims; the district court considered summary judgment on the federal claims and whether to retain state claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Monopolization (private health insurance market) | PHP unlawfully maintained monopoly by exclusivity and reducing NMOHC reimbursement to eliminate competition. | Market shares and conduct do not show unlawful exclusionary conduct; unilateral contract negotiation and insurer conduct are procompetitive. | Summary judgment for defendants: plaintiff failed to prove the required anticompetitive (exclusionary) conduct under §2. |
| Attempted monopolization (outpatient oncology market) | PHS used enterprise power (referral steering, nurse navigators, Mandate) to attempt to monopolize outpatient oncology. | PHS’s actions were unilateral, profit‑driven, and legitimate business/quality initiatives, not unlawful exclusion. | Summary judgment for defendants: plaintiff cannot show the exclusionary conduct necessary for attempted monopolization. |
| Reimbursement/coverage cuts & Mandate (refusal‑to‑deal / predation) | PHP’s renegotiation, lower reimbursements, and the Mandate were designed to strip NMOHC drug revenue and force it out. | These were unilateral, profit‑motivated decisions or plan terms (Mandate was a benefit design); no “termination of a voluntary, profitable course of dealing” or irrational forfeiture of short‑term profits. | Held: conduct fits within the general rule protecting unilateral conduct; no Aspen‑type refusal‑to‑deal or predatory bidding established. |
| Referral management, nurse navigators, PMG guide | PHS’s referral tools and navigators intentionally diverted patients from NMOHC to PMG and were exclusionary. | Programs aimed to reduce purchased medical costs, retain capitated patients, and improve internal capacity—valid business reasons; no duty to assist rivals. | Held: lawful, unilateral competitive conduct; not an antitrust §2 violation. |
| Remaining state claims (tortious interference, unfair competition) | Ask court to adjudicate state law claims tied to same facts. | Defendants requested dismissal of federal claims; if federal claims dismissed, state claims should be left to state court. | Court dismissed federal antitrust claims and declined supplemental jurisdiction over state claims, dismissing them without prejudice. |
Key Cases Cited
- Reazin v. Blue Cross & Blue Shield of Kansas, Inc., 899 F.2d 951 (10th Cir. 1990) (market share and multimarket factors relevant to monopoly power inquiry)
- Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (2004) (limits on §2 liability for unilateral conduct and leveraging claims absent a duty to deal)
- Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (1985) (narrow refusal‑to‑deal exception where a monopolist abandons a profitable cooperative arrangement)
- Novell, Inc. v. Microsoft Corp., 731 F.3d 1064 (10th Cir. 2013) (scope of Aspen exception and standards for unilateral conduct liability)
- Four Corners Nephrology Assoc., P.C. v. Mercy Med. Center of Durango, 582 F.3d 1216 (10th Cir. 2009) (rejecting leveraging claim; no duty to share facilities after defendant invested in its own practice)
- Christy Sports, LLC v. Deer Valley Resort Co., Ltd., 555 F.3d 1188 (10th Cir. 2009) (antitrust protects competition, not competitors; refusal to deal analysis)
- Weyerhaeuser Co. v. Ross‑Simmons Hardwood Lumber Co., Inc., 549 U.S. 312 (2007) (predatory bidding and monopsony principles)
- Pac. Bell Tel. Co. v. Linkline Commc’n, 555 U.S. 438 (2009) (unilateral pricing conduct generally not actionable under §2)
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (summary judgment burden allocation)