N.M. Oncology & Hematology Consultants, Ltd. v. Presbyterian Healthcare Servs.

• Decision Date: 22 August 2014
• Docket Number: Civ. No. 12–00526 MV/GBW.
• Citation: 54 F.Supp.3d 1189
• Parties: NEW MEXICO ONCOLOGY AND HEMATOLOGY CONSULTANTS, LTD., Plaintiff, v. PRESBYTERIAN HEALTHCARE SERVICES and Presbyterian Network, Inc., Defendants.
• Court: U.S. District Court — District of New Mexico

54 F.Supp.3d 1189

NEW MEXICO ONCOLOGY AND HEMATOLOGY CONSULTANTS, LTD., Plaintiff

v.PRESBYTERIAN HEALTHCARE SERVICES and Presbyterian Network, Inc., Defendants.

Civ. No. 12–00526 MV/GBW.

United States District Court, D. New Mexico.

Signed Aug. 22, 2014.

George M. Sanders, Chicago, IL, J. Douglas Foster, Geoffrey D. Rieder, Foster, Rieder & Jackson, PC, Albuquerque, NM, for Plaintiff.

Bruce D. Hall, Charles K. Purcell, Rodey, Dickason, Sloan, Akin & Robb, Albuquerque, NM, Jeffrey A. Levee, Kate Wallace, Jones Day, Los Angeles, CA, Thomas Demitrack, Jones Day, Cleveland, OH, Toby G. Singer, Jones Day, Washington, DC, for Defendants.

MEMORANDUM OPINION AND ORDER

MARTHA VAZQUEZ, District Judge.

THIS MATTER comes before the Court on the Motion of Defendants Presbyterian Healthcare Services and Presbyterian Network, Inc. to Dismiss the Second Amended Complaint with Prejudice and Memorandum in Support, filed April 15, 2013 [Doc. 33]. The Court, having considered the motion, briefs, and relevant law, and being otherwise fully informed, finds that the motion is well taken in part and will be granted in part.

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. 24 ¶ 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 laboratory services. [Id. ¶¶ 24, 32, 33, 34]. NMOHC offers patients its services at a free standing cancer center owned and operated by NMOHC. [Id. ¶ 31]. While NMOHC is centered in Albuquerque, it has satellite facilities in underserved areas, including Gallup, Silver City, and Ruidoso. [Id. ¶ 35].

Defendant Presbyterian Healthcare Services (“Presbyterian Hospital”) is a not-for-profit corporation, with its principle place of business in Albuquerque, New Mexico. [Id. ¶ 36]. Presbyterian 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. ¶ 37]. Presbyterian Hospital is the largest hospital in both Albuquerque and New Mexico and offers a full range of services, including comprehensive oncology services. [Id. ¶¶ 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. ¶ 45].

Presbyterian Hospital also is the ultimate parent company of co-Defendant Presbyterian Network, Inc. [Id. ¶ 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. ]. The Court collectively refers 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. ¶ 42]. Despite the legal separation between Presbyterian Hospital and PHP, Presbyterian Hospital actively controls PHP's actions. [Id. ¶ 43].

Plaintiff NMOHC filed its Second Amended Complaint (hereinafter “complaint”) [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. These claims arise out of Defendants' alleged use of their dominance in the markets for private health insurance and hospital inpatient services to increase their power in, and drive Plaintiff out of, the market for comprehensive oncology services. To this end, Plaintiff alleges that Defendants engaged in numerous wrongful acts, including but not limited to lowering their rate of reimbursement to Plaintiff in the most recent healthcare provider contract between Plaintiff and PHP, threatening to terminate this provider contract, entering into an exclusive arrangement with the insurance provider United HealthCare pursuant to which United will not take market actions without PHP's approval, limiting and obstructing referrals to Plaintiff's physicians, pressuring Plaintiff's patients to switch to Presbyterian Hospital's physicians, obtaining and selling drugs obtained through the federal 340B program¹ (referred to herein as the “340B drugs” and “340B program”) in an unlawful manner, issuing a mandate requiring Plaintiff's patients to purchase chemotherapy and support drugs from Presbyterian Hospital's specialty pharmacy instead of from Plaintiff (the “mandate”), and falsely informing one of Plaintiff's patients that Plaintiff is not an approved provider under PHP's healthcare plan. These wrongful acts form the basis of the claims alleged in the complaint.

Plaintiff alleges eight counts in the complaint. 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. Plaintiff's monopolization claims (Counts I and III) 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 Plaintiff's reimbursement rates, threatening to terminate Plaintiff's provider contract, and entering into an exclusive arrangement with United HealthCare. [Id. ¶¶ 471–76, 483–89]. Plaintiff's attempted monopolization claims (Counts II and IV) arise out of 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 and by committing the additional acts of limiting referrals to Plaintiff's physicians and requiring Plaintiff's patients to purchase chemotherapy drugs from Presbyterian Hospital's pharmacy. [Id. ¶¶ 477–82, 490–95].

Plaintiff also asserts claims for tortious interference with existing and prospective contractual relationships (Counts V and VIII), which arise out of Defendants' alleged use of improper means to prevent and prohibit referrals to Plaintiff and out of Defendants' alleged use of improper means to prevent Plaintiff's patients from purchasing chemotherapy drugs from Plaintiff and using Plaintiff's chemotherapy infusion center. [Id. ¶¶ 496–503, 517–25]. Plaintiff in addition asserts state law claims for injurious falsehood and unfair competition (Count VI). Plaintiff's injurious falsehood claim arises out of Defendants' alleged misrepresentation of Plaintiff's provider status to patients, and Plaintiff's unfair competition claim arises out of Defendants' coercion of patients to switch to Presbyterian Hospital's physicians, their pressure upon their physicians to refer patients in-house instead of to Plaintiff, their interference with the ability of their physicians to make referrals to Plaintiff, and their alleged illegal receipt and sale of 340B drugs purchased at a discount from pharmaceutical manufacturers under the federal 340B program and sold in violation of program guidelines to reap inflated profits. [Id. ¶¶ 8, 12, 505]. Plaintiff lastly asserts a federal RICO claim (Count VII), which arises out of Defendants' aforementioned alleged illegal receipt and sale of 340B drugs, and Defendants' issuance of the mandate requiring seniors covered by PHP's health insurance to purchase their chemotherapy drugs (including 340B drugs) from Presbyterian Hospital's pharmacy instead of from Plaintiff.² [Doc. 24 ¶¶ 8–12].

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, 40 F.3d 337, 340 (10th Cir.1994). The sufficiency of a complaint is a question of law, and when considering a rule 12(b)(6) motion, a court must accept as true all well-pleaded factual allegations in the complaint, view those allegations in the light most favorable to the plaintiff, and draw all reasonable inferences in the plaintiff's favor. See Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322, 127 S.Ct. 2499, 168 L.Ed.2d 179 (2007) ; Smith v. U.S., 561 F.3d 1090, 1098 (10th Cir.2009) (citation omitted), cert. denied, 558 U.S. 1148, 130 S.Ct. 1142, 175 L.Ed.2d 973 (2010).

A complaint need not set forth detailed factual allegations, yet a “pleading that offers labels and conclusions or a formulaic recitation of the elements of a cause of action” is insufficient. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id.

To survive a motion to dismiss pursuant to Rule 12(b)(6), a plaintiff's complaint must contain sufficient facts that, if assumed to be true, state a claim to relief that is plausible on its face. See Twombly, 550 U.S. at 570, 127 S.Ct. 1955 ; Mink v. Knox, 613 F.3d 995, 1000 (10th Cir.2010). “A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft, 556 U.S. at 678, 129 S.Ct. 1937 (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955 ). “Thus, the mere metaphysical...