HPC Biologicals, Inc. v. UnitedHealthcare of Louisiana, Inc.

194 So. 3d 784, 2016 La.App. 1 Cir. 0585, 2016 WL 3031720, 2016 La. App. LEXIS 1046
CourtLouisiana Court of Appeal
DecidedMay 26, 2016
DocketNo. 2016 CA 0585
StatusPublished
Cited by9 cases

This text of 194 So. 3d 784 (HPC Biologicals, Inc. v. UnitedHealthcare of Louisiana, Inc.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
HPC Biologicals, Inc. v. UnitedHealthcare of Louisiana, Inc., 194 So. 3d 784, 2016 La.App. 1 Cir. 0585, 2016 WL 3031720, 2016 La. App. LEXIS 1046 (La. Ct. App. 2016).

Opinion

McDonald, j.

lain this appeal, UnitedHealthcare. of Louisiana, Inc. challenges a judgment denying its exceptions of no cause of action and no right of action as to the antitrust claims asserted by plaintiff,' HPC Biologi-cals, Inc. For the following reasons, we reverse the trial court’s judgment and remand for further proceedings.

FACTUAL AND PROCEDURAL BACKGROUND

The facts, as alleged in the petition for declaratory judgment and damages filed by HPC Biologicals, Inc. (“HPC”), are as follows. HPC is a specialty pharmacy that provides medications used to treat a range of complex and chronic diseases in patients at every stage of life. While HPC was initially founded to treat individuals with hemophilia, it has expanded the. scope,of its business to serve patients with other specialized conditions, such as Crohn’s disease, hepatitis C, multiple sclerosis, and rheumatoid arthritis. HPC offers a wide range of services as a specialty pharmacy, including home-based nursing care, social services, community consultants and advocates and reimbursement representatives. HPC also serves high-risk populations and patients across the financial spectrum, including individuals insured through Medicaid, and specializes in conditions that require costly treatment.

The State of Louisiana privatized its Medicaid program, referred to as “Bayou Health,” which is a highly regulated industry governed by both federal and state laws. Under the Bayou Health program, Medicaid recipients enroll in a health plan managed by one of five private insurance [790]*790companies, referred to as managed care organizations (“MCO”), which are funded through the State. UnitedHealthcare of Louisiana, Inc. (“United”) is one of the five MCOs currently operating within the Bayou Health program. Prior to the privatization of the Medicaid program, HPC provided services to Medicaid patients, and it currently | aserves Medicaid patients enrolled in all of the Bayou Health plans, except the plan operated by United. On January 30, 2015, HPC received notification from the State of Louisiana, Department of Health and Hospitals (“DHH”) that, beginning February 1, 2015, pharmacy benefits for Medicaid recipients would be managed and reimbursed through the Bayou Health plans and that two new plans were added to the Bayou Health program, including the plan operated by United. HPC contacted United with the goal of entering into an agreement with United as a provider within its Bayou Health program. Despite assurances that it would promptly forward a contract, United did not provide HPC with an application for specialty pharmacy qualification until March 30, 2015. United did not send a proposed specialty pharmacy network agreement to HPC until July 14, 2015, with a supplemental agreement on July 21, 2015.

United’s proposed agreements failed to provide a complete set of terms for HPC’s participation in the United plan, which included a failure to set all the rates at which HPC would be reimbursed for pharmaceuticals to plan patients, HPC attempted to resolve this issue with United and was advised by United that the contract would be configured to “pay as the state pays,” referring HPC to the fee schedule posted by DHH. HPC alleges that United’s reimbursement rates for numerous medications were below the minimum fee-for-service rate set by Louisiana Medicaid, and that United’s proposed rates to HPC for numerous medications were materially lower than those used by the other four MCOs, and were also below HPC’s cost to acquire the medications. HPC continued to request from United the reimbursement rates for medications not listed in the proposed contracts. Meanwhile, United informed HPC that HPC would not be permitted to supply any patients in the United plan with two key medications for hemophilia, i.e., Rixubus and Alprolix. Rather, United plan patients would be required to purchase these two medications only through two other specialty | ¿pharmacies, OptumRx and BioScrip. OptumRx is an affiliate of United, sharing the same corporate parent company, and BioScrip is a national partner of United’s corporate parent company. OptumRx and BioScrip are the only designated specialty pharmacies for a broad array of medications in all of United’s health plans throughout the United States, with the exception of three states. According to HPC, BioScrip will fill a prescription for a specialty medication only once, and then transfers this service to OptumRx, which continues to fill the prescription exclusively. United rewards BioScrip for this arrangement by agreeing to pay BioScrip above-market prices on other medications sold by BioScrip to members of United’s Bayou Health plan. HPC alleges that United and BioScrip have entered into an arrangement that results in patients having no choice as to their specialty pharmacy provider, which results in a conspiracy to restrain trade in, and is actively monopolizing the sale of, specialty pharmacy medications to members of United’s plan.

On September 1, 2015, United informed HPC that it would no longer pay HPC for hemophilia products supplied to its Bayou Health plan members because HPC had failed to execute the provider agreement [791]*791within a reasonable time, and HPC’s patients within the United plan would need to be transferred to an in-network provider, despite the' fact that United had still not provided HPC with the reimbursement rates it had requested. HPC sought DHH’s assistance in resolving this, matter, which resulted in communications and a meeting. However, DHH later informed HPC that the issue was between United and HPC and that DHH would not make any further requests of United.

HPC alleges that United has improperly barred it from participating as a provider in United’s Bayou Health plan and that DHH has abdicated its legal responsibility of ensuring that United, as a Bayou Health MCO, operates in accordance with federal and state law. HPC has asserted three causes of action: [fl(l) declaratory judgment; (2) damages for unfair trade practices; and (3) damages for violation of antitrust statutes.

United filed peremptory exceptions of no cause of action and no right of action. In its exception of no cause of action, United asserted that: HPC has no cause of action for declaratory judgment because it has no private right to enforce Medicaid regulations and cannot pursue a declaratory judgment to do the same, and HPC has failed to identify any Medicaid rule or regulation that United has breached; HPC has no cause of action under the Louisiana Unfair Trade Practices Act because it has not alleged that it suffered an ascertainable loss or that United violated public policy or engaged in egregious or deceptive activity; HPC has no cause of action under the Louisiana antitrust statutes because it pled a legally deficient market to support a claim of restraint of trade, monopolization, ‘conspiracy to monopolize or attempted monopolization and • failed to plead that United possessed monopoly power or that its conduct injured competition or caused an antitrust injury.

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194 So. 3d 784, 2016 La.App. 1 Cir. 0585, 2016 WL 3031720, 2016 La. App. LEXIS 1046, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hpc-biologicals-inc-v-unitedhealthcare-of-louisiana-inc-lactapp-2016.