The anti-trust battle by a group of New York DCs to achieve equal access to the basic managed care plans of the HMOs, and to free consumers from paying additional premiums for riders is fast approaching the trial stage. Still, the HMO defendants allege that time is in their corner; that DCs are closing their practices with each passing day; and that soon, the issue of inclusion in managed care will be moot because the chiropractic profession cannot match the combined economic power of the insurance industry and the medical profession. In response to the HMO "allegators," the Solla DCs announced their readiness for trial in anticipation of federal court judge Nina Gershon's decision denying the HMOs' motion for summary judgment.
All HMO defendants claimed in their motion papers that they did not conspire with any other HMO; that all decisions concerning chiropractic covered benefits were made "in-house," unilaterally, and by nonmedical management personnel; and with little or no respect for present law, they argue that without proof of a conspiracy among the HMOs, there is no Section 1 violation of the Sherman Anti-Trust Act.
After extensive and expensive discovery proceedings, the Solla plaintiffs proved that "the Prudential HMO does not offer coverage in their basic HMO plan, except for large group contracts; the defendants Aetna, Choicecare, Empire, HIP, Managed Health, Oxford, Sanus (NYLCare) and U.S. Healthcare each admit they do not offer coverage for physical manipulation services in their basic HMO plans."
Three defendants, Choicecare, Cigna, and Oxford, stretch these admissions even further: "Choicecare's in-network providers do not exercise independent discretion in deciding whether to direct a referral to a chiropractor; none of Cigna's participating providers is authorized to change the nature or scope of the benefits; and at Oxford, no participating health care provider has decision-making authority with regard to the nature or scope of the benefits."
The defendants admit lack of participation by their personnel in decisions of medically-necessary services, and lack of due regard for cost studies and competitors' practices: "Choicecare's in-network providers do not participate in decisions as to chiropractic or spinal-manipulation services. Empire does not consult any medical literature or medical doctor in deciding what benefit to offer for physical manipulation services. Empire's vice president for medical policy and research has nothing to do with the decision to exclude physical manipulation services. Neither HIP's medical groups nor their providers participate in deciding to limit coverage for physical manipulation services. HMO Sanus (NYLCare) has not commissioned or considered any studies regarding the cost of chiropractic treatment in comparison to the cost of other forms of treatment. Sanus executives have not investigated the practice of the other defendants in determining what benefits to cover or how to administer the benefits that are covered."
Four HMO defendants openly admit that exclusion of chiropractic services means exclusion of chiropractic doctors from the health care provider network: "Choicecare has not contracted with chiropractic doctors with respect to the basic HMO plan; they exclude DCs from the network of health care providers; and health care providers have an option to refer to DCs. Neither HIP nor any of its medical groups has a contract with a chiropractic doctor. The same is true with the defendant HMO Managed Health. HMO Travelers never had DCs in its network."
William Weber, lead attorney for the Solla plaintiffs, argued in the brief that whatever were the intentions of the HMO defendants in excluding chiropractic coverage, even assuming they were well-intended, the HMO defendants are civilly liable for violating Section 1 of the Sherman Anti-Trust Act. Citing Summit Health, Ltd v. Pinhas, 500 U.S. 322, 111 Supreme Ct. 1842 (1991) Weber stated: "During the past century, as the dimensions and complexity of our economy have grown, the federal power over commerce, and the concomitant coverage of the Sherman Act, have experienced similar expansion. The court's decisions have long permitted the reach of the Sherman Act to expand along with expanding notions of congressional power. It is firmly settled that when Congress passed the Sherman Act, it left no area of its constitutional power [over commerce] unoccupied. In a civil action under Section 1, liability may be established by proof of either an unlawful purpose and/or anticompetitive effect." Solla therefore argues that either purpose or effect will support liability.
What the HMOs refuse to accept is that Section 1 liability does not require an unlawful purpose. Section 1 is "aimed at all contracts, combinations or conspiracies, which by reason of their purpose or effect tend to prejudice the public interest by unreasonably restraining interstate trade and commerce." Blue Bell Co. v. Frontier Ref. Co. 213 F. 2d 354 (10th Cir. 1954).
The Solla plaintiffs do not claim a conspiracy. They do claim each defendant has formed a combination (contracting with independent physicians to form IPOs or in the case of HIP contracting with groups of physicians) whose effect is anti-competitive. "Unity of purpose is required when a conspiracy is alleged under Section 1, but [not] when contract or combination is alleged." Eskfoot A/S v. E.I. du Pont De Nemours & Co. 873 F. Supp. 81 (S.D.N.Y.) (1995).
Attorney Weber argued in the opposition brief that there are many areas of the law where an unlawful purpose is not required. "It is unlawful for a packer or poultry dealer to do any act for the purpose or with the effect of restraining trade. A bank may not be acquired if the effect may be substantially to lessen competition. Acquisition of a telephone system is unlawful if the purpose is and/or the effect thereof may be to substantially lessen competition." Also citing the Code of Federal Regulations where unlawful purpose is not required, Weber stated: "It is unlawful to exclude handicapped persons, to influence the control of a bank, to unreasonably interfere with a person's work performance, to discriminate on the basis of age, or to disrupt the Middle East peace process" (31 CFR 595.311)! The law is as powerful in the case of discrimination against interstate commerce: "Either purpose or effect will trigger strict scrutiny analysis." Harvey & Harvey v. County of Chester, 68 F. 2d 798 (3rd Cir. 1995), cert. den._U.S._, 1163 S. Ct. 1265 (1996).
Under Section 1, an association of decision makers is illegal, if its effect is to restrain, never mind the purpose.
The Solla plaintiffs expect to receive a decision on the HMOs final motion by July and intend to announce to the court they are ready for trial in November or December of this year. "We need the money to pay for the economic experts," stated Dr. Solla, "and the burden on attorneys William Weber and Laurence Meyer needs to be lifted by hiring a nationally recognized, expert litigator." For the last four years, throughout the country DCs have promised to support this antitrust action "after the summary judgement motions are decided." The Solla plaintiffs are confident that the HMO motion will be defeated, but they cannot wait for June or July to begin retaining the experts to prepare for trial. "We need the financial support of the chiropractic community now! We have raised and spent nearly $600,000. We need at least that amount to properly prepare for trial," stated Dr. Solla. "Several HMO defendants have been talking settlement on a local level and we have turned our backs on them. This antitrust action was started on behalf of the chiropractic profession throughout the United States, and we will not sell out to the HMO money machines. We have been hurt when some state associations decline to offer support because they state: 'our state laws are protecting DCs and the Solla case will not impact us,' or 'our attorneys have advised us not to support the action.'"
During research and discovery, it was revealed to the plaintiffs' legal team that many state and national DC leaders are on the HMOs' payrolls, or have vested interests in businesses tied to managed care. The plaintiffs believe that DCs have every right to be entrepreneurs, but not the right to represent the majority of their state members who are being driven out of business by the growing tentacles of managed care. On a more positive side, the HMOs were compelled to produce computer data of all chiropractic reimbursement and referrals, mostly through riders. The data is still being reviewed and will be made available to the chiropractic profession to assist in research and developing protocols.
Dr. Andrew Lacerenza, as treasurer of the Chiropractic Alliance, is prepared to mail the HMO and Solla briefs for a small fee to interested DCs who request a copy. He is also prepared to accept donations from national and state professional organizations, from the chiropractic colleges, and from chiropractic doctors throughout the United States. For a copy of the HMO and Solla summary judgment briefs, please contact Dr. Lacerenza at (516) 225-9880. Contributions to help support the litigation should be mailed to The Chiropractic Alliance, c/o Dr. Andrew Lacerenza, 199 North Wellwood Avenue, Lindenhurst, New York 11757.
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