Antitrust Challenges to Provider Network Exclusion

F or as long as there have been provider networks that engage in managed care contracting—whether HMOs, PPOs, IPAs, PHOs, or now ACOs—there have been antitrust lawsuits challenging exclusion from those networks. These suits tend to share a core set of facts. An excluded provider group contends that the denial of its application for admission to the network was the product of a conspiracy among all or some of the network’s members. The provider contends that its admission to the network would benefit competition by allowing it to compete more effectively with other network participants. The network responds that the excluded provider has other avenues of competition available outside the network, and that the network cannot take all applicants without losing the ability to manage the quality of services and to negotiate discounts on provider fees. Most of these suits also share a common outcome—the excluded provider loses, generally because it cannot establish harm to competition as opposed to harm to itself as an individual competitor. A recent set of cases involving a radiology benefits management company (RBM) follows the classic pattern, except in one key respect—so far, the plaintiffs have not definitively lost. And while no plaintiff has definitively won either, the cases have multiplied and spawned an enforcement action by the New York attorney general. In an era of consolidation among providers both through mergers and the creation of network entities such as ACOs, the RBM suits provide a note of caution worth heeding. Just as a network that includes too many providers in a particular specialty may face enforcement risk, a network that selectively includes providers may face treble damages lawsuits from providers whose applications are denied. Those responsible for overseeing network operations need to strike a careful balance in order to successfully manage antitrust risk. This article begins by reviewing the case law on provider network exclusion. It then describes the recent string of RBM litigations and focuses, in particular, on the unique theory of ‘‘one-stop shopping’’ by which plaintiffs in these suits have tried to establish harm to competition and damages.