Federal Court Dismisses Multi-Million Dollar Antitrust Complaint Against Non-Profit Hospital System

Ober|Kaler obtains dismissal of antitrust case against Arkansas-based Baptist Health

Washington, D.C., September 4, 2008. (LAWFUEL) On Friday, August 29, the federal district court in Little Rock, Arkansas dismissed all claims in a cardiology clinic’s long-standing antitrust suit against Baptist Health, a five-hospital system in Arkansas, and Arkansas Blue Cross and Blue Shield (“Blue Cross”). The law firm of Ober|Kaler represented Baptist Health and Baptist Medical System HMO, Inc.

Little Rock Cardiology Clinic (“LRCC”) alleged that Baptist Health and Blue Cross conspired to restrain competition, and monopolized cardiology services and health insurance, in the Little Rock area. LRCC claimed millions of dollars of actual damages, and under federal antitrust law, would have been entitled to triple that amount had it prevailed.

In 1997, LRCC and other investors opened a cardiac hospital, Arkansas Heart Hospital, in Little Rock. That same year, Blue Cross terminated its provider network participation agreements with the clinic and its physicians. LRCC alleged that its termination resulted from a conspiracy between Baptist Health and Blue Cross, allowing Baptist to monopolize the hospital services market and Blue Cross to obtain monopoly power in the health insurance industry. In addition, LRCC claimed that Baptist Health, as part of a conspiracy with Blue Cross, adopted a policy in 2003 that prevented physicians with financial interests in other hospitals from obtaining or maintaining medical staff privileges at Baptist Health facilities.

In dismissing the case, the court held that LRCC’s claims relating to the health-insurance market were barred by the statute of limitations because the terminations from Blue Cross’s network had occurred some ten years before the case was filed, and Blue Cross’s subsequent refusals to readmit LRCC were merely reaffirmations of the original terminations.

Additionally, the court held that LRCC failed to plead a plausible relevant market, an essential element of each of its claims, explaining that Baptist Health did not provide cardiologists’ services and so could not monopolize that market. The court also held that LRCC’s alleged geographic market, the cities of Little Rock and North Little Rock, was implausibly small. All plaintiffs’ claims were dismissed with prejudice, which means that they cannot be re-filed.

Ober|Kaler antitrust attorneys Jeff Miles, Bill Berlin, and Christi Braun represented Baptist Health and its subsidiaries.

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