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New Mexico Oncology and Hematology Consultants, Ltd. v. Presbyterian Healthcare Services.

Nos. 19-2210 & 20-2024. D.N.M. Judge Kelly. Sherman Act—Antitrust Claims—Monopolization and Attempted Monopolization—Refusal to Deal—Summary Judgment.

April 5, 2021

Plaintiff is a physician practice that owns and operates the New Mexico Cancer Center (NMCC). Defendant Presbyterian Healthcare Services (PHS) is a nonprofit integrated healthcare system that participates in multiple markets and employs many physicians. PHS controlled defendant Presbyterian Health Plans, Inc. (PHP), which operates on a for-profit basis and sells health insurance products. Plaintiff is an in-network provider for PHP.

The NMCC opened in 2002, and plaintiff and PHP entered into a five-year provider agreement. The agreement was extended on annual intervals after its expiration. In 2007, PHS opened its own oncology program and began to compete with plaintiff.

Plaintiff filed suit against defendants alleging, as relevant here, claims under Section 2 of the Sherman Act for monopolization and attempted monopolization and various state law claims. Plaintiff’s claims centered on three alleged anticompetitive practices that PHS implemented: (1) the “mandate,” under which PHP would cover certain drugs only if they were purchased from a specified pharmacy; (2) an alleged joint venture between PHP and Radiology Associates of Albuquerque (RAA) in which PHP enrollees needing breast imaging services were forced to use RAA under their PHP plan; and (3) PHS’s policies concerning internal physician referrals. The district court granted summary judgment to defendants on the Sherman Act claims and declined to exercise jurisdiction over the remaining state law claims.

Plaintiff appealed the district court’s grant of summary judgment. First, as to the mandate, none of the conduct that plaintiff asserted was anticompetitive constituted a refusal to deal because none of the conduct demonstrated a willingness to forsake short-term profits to achieve an anti-competitive end, and none of the conduct showed that defendants ended a preexisting course of dealing with plaintiff. Second, plaintiff’s allegation of a joint venture between RAA and PHS lacked merit. Third, regarding the claims concerning internal referrals, PHS was under no obligation to refer its patients to another practice or hospital. Accordingly, the district court did not err in holding that plaintiff had failed to establish a Sherman Act claim. Further, the district court did not abuse its discretion in declining to exercise jurisdiction over the remaining state law claims after it dismissed the Sherman Act claims.

The summary judgment was affirmed.

Official US Court of Appeals for the Tenth Circuit proceedings can be found at the US Court of Appeals for the Tenth Circuit website.

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