New Mexico Oncology v. Presbyterian Healthcare Services

169 F. Supp. 3d 1204, 2016 WL 1169410, 2016 U.S. Dist. LEXIS 39180
CourtDistrict Court, D. New Mexico
DecidedMarch 14, 2016
DocketCiv. No. 12-00526 MV/GBW
StatusPublished
Cited by3 cases

This text of 169 F. Supp. 3d 1204 (New Mexico Oncology v. Presbyterian Healthcare Services) is published on Counsel Stack Legal Research, covering District Court, D. New Mexico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
New Mexico Oncology v. Presbyterian Healthcare Services, 169 F. Supp. 3d 1204, 2016 WL 1169410, 2016 U.S. Dist. LEXIS 39180 (D.N.M. 2016).

Opinion

MEMORANDUM OPINION AND ORDER

MARTHA VÁZQUEZ, UNITED STATES DISTRICT JUDGE

THIS MATTER comes before the Court on the Partial Motion of Defendants Presbyterian Healthcare Services and Presbyterian Network, Inc. to Dismiss the Third Amended Complaint with Prejudice and Memorandum in Support, filed April 20, 2015 [Doc. 141]. Defendants seek to dismiss Plaintiffs new claims for monopolization of an alleged “Inpatient Hospital Services” market. The Court, having considered the motion, briefs, relevant law, and being otherwise fully informed, finds that the motion is well taken and will be granted.1

BACKGROUND

Plaintiff New Mexico Oncology and Hematology Consultants, Ltd. (“NMOHC”) is a professional corporation with its principal place of business located in Albuquerque, New Mexico. [Doc. 123 at 23]. NMOHC is an integrated, comprehensive cancer treatment facility that offers patients a full range of medical oncology and hematology, radiation oncology, chemotherapy infusion, and radiology and labora[1206]*1206tory services. [Id. at 24, 32, 33, 34]. NMOHC offers patients its services at a freestanding cancer center owned and operated by NMOHC. [Id. at 31]. While NMOHC is based in Albuquerque, it has satellite facilities in underserved areas, including Gallup, Silver City, and Ruidoso. [Id. at 35].

Defendant Presbyterian Healthcare Services (“Presbyterian Hospital”) is a not-for-profit corporation, with its principle place of business in Albuquerque, New Mexico. [Id. at 36]. Presbyterian Hospital owns, operates, and manages eight acute care hospitals, all of which are located in New Mexico and three of which are located in Albuquerque. [Id. at 37]. Presbyterian Hospital is the largest hospital in New Mexico and offers a full range of services, including comprehensive oncology services. [Id. at 35, 45, 69, 77, 84]. Presbyterian Hospital owns, operates, and manages Presbyterian Medical Group, which employs approximately 700 physicians, including primary care physicians, medical oncologists, and a wide range of other specialists. [Id. at 45].

Presbyterian Hospital also is the ultimate parent company of co-Defendant Presbyterian Network, Inc. [Id. at 39]. Presbyterian Hospital owns and operates Presbyterian Healthcare Services Affiliates, Presbyterian Healthcare Services Affiliates owns Southwest Health Foundation, Southwest Health Foundation owns Defendant Presbyterian Network Inc., and Presbyterian Network Inc. owns and controls Presbyterian Insurance Company, Inc. and Presbyterian Health Plans Inc. [Id.]. In the interest of brevity, the Court will refer collectively to Presbyterian Network, Inc. and its subsidiaries as “PHP.” [Id.].

PHP operates, on a for-profit basis, various health maintenance organizations, preferred provider organizations, and other health insurance products. [Id.]. PHP is the largest health insurer in Albuquerque. [Id. at 43], Despite the legal separation between Presbyterian Hospital and PHP, Presbyterian Hospital actively controls PHP’s actions. [Id. at 44],

Plaintiff filed its Second Amended Complaint (hereinafter “SAC”) [Doc. 24] against Defendants Presbyterian Hospital and PHP, alleging various federal and state antitrust claims, claims under the federal Racketeer Influenced and Corrupt Organizations Act (“RICO”), and state common law claims. On August 22, 2014, this Court granted in part and denied in part Defendants’ Motion to Dismiss the Second Amended Complaint, dismissing Plaintiffs state law claim for injurious falsehood (Count VI) and Plaintiffs claims under RICO (Count VII). Plaintiff filed a Third Amended Complaint (hereinafter “TAC”) on March 19, 2015, [Doc. 123], in which Plaintiff amended its antitrust claims under Counts I, II, IV, and V. Defendants filed the present Partial Motion to Dismiss the Third Amended Complaint on April 20, 2015, asking the Court to dismiss Plaintiffs new antitrust claims. [Doc. 141],

Plaintiff asserts monopolization and attempted monopolization antitrust claims under Section 2 of the Sherman Act, 15 U.S.C. § 2, and under the New Mexico Antitrust Act (“NMAA”), N.M. Stat. Ann. § 57-1-2. In its SAC, Plaintiffs antitrust claims are premised upon the theory that Defendants used their monopoly in the private health insurance market to employ anticompetitive tactics that harm Plaintiff in the comprehensive oncology market. Plaintiffs monopolization claims under this theory (Counts I, IV) arise out of Defendants’ alleged willful maintenance of a monopoly and/or monopsony in the market for private -health insurance services through the alleged anticompetitive acts of lowering Plaintiffs reimbursement rates, [1207]*1207threatening to terminate Plaintiffs provider contract, and entering into an exclusive arrangement with United Healthcare. [Doc. 24 at 471-76, 483-89]. The Court upheld Plaintiffs antitrust claims related to Defendants’ monopoly in the private insurance market. [Doc. 79 at 52-53].

However, Plaintiffs TAC alleges an additional theory for its antitrust claims, which is the subject of the present Partial Motion to Dismiss. Plaintiff now alleges that Defendants used their monopoly in the inpatient hospital services market to harm Plaintiff in the comprehensive oncology market. Plaintiffs monopolization claims under this theory (Counts II, V) arise out of Defendants’ alleged willful maintenance of a monopoly in the market for inpatient hospital services through the alleged anticompetitive acts of intimidating physicians who referred patients to NMOCH, actively discouraging and interfering with physician referrals to NMOCH, offering financial benefits for physicians who refused to refer patients to NMOCH, and alterations to Defendants’ internal computer system that made it difficult for Defendants to process referrals to NMOCH. [Doc. 123 at 255-63, 267].

Plaintiff also claims attempted monopolization in violation of Section 2 (Count III). In its SAC, Plaintiff's attempted monopolization claim appeared to be based solely on Defendants’ alleged attempt to monopolize the comprehensive oncology services market by engaging in the same acts that maintained their monopoly in the private health insurance market. In the TAC, however, Plaintiffs attempted monopolization claim arises out of Defendants’ alleged attempt to monopolize the comprehensive oncology services market by engaging in the same acts that maintained both alleged monopolies in the private health insurance market and the inpatient hospital services market.

The Court did not consider claims based on the inpatient hospital services market in Defendants’ first Motion to Dismiss because the parties agreed that Plaintiff would amend claims pertaining to Defendants’ alleged monopoly of the market for inpatient hospital services. [Doc. 79 at 7, n.3].

STANDARD

Federal Rule of Civil Procedure 12(b)(6) authorizes a court to dismiss a complaint for “failure to state a claim upon which relief can be granted.” Fed. R.Civ.P. 12(b)(6). “The nature of a Rule 12(b)(6) motion tests the sufficiency of the allegations within the four corners of the complaint after taking those allegations as true.” Mobley v. McCormick,

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Bluebook (online)
169 F. Supp. 3d 1204, 2016 WL 1169410, 2016 U.S. Dist. LEXIS 39180, Counsel Stack Legal Research, https://law.counselstack.com/opinion/new-mexico-oncology-v-presbyterian-healthcare-services-nmd-2016.