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Antitrust Challenge to Hospital’s Exclusive Dealing Contracts with Payors Moves Forward

A small regional hospital’s antitrust suit alleging illegal exclusive dealing and attempted monopolization against its largest competitor will move forward following a district court’s denial of the defendant hospital’s motion for judgment on the pleadings.  Methodist Health Svcs. Corp. v. OFS Healthcare System, d/b/a Saint Francis Med. Ctr., No. 1:13-cv-01054 (C.D. Ill. Mar. 25, 2015).  The complaint alleges that defendant is a “must have” for health insurers, and that defendant leverages that status to prevent health insurers from contracting with plaintiff and other competing hospitals.  Saint Francis filed a motion for judgment on the pleadings, arguing that the complaint failed to plead, and cannot adequately plead, plausible relevant product markets or substantial foreclosure in those markets.  The court disagreed.

In “Hospital Wins First Round Against Largest Rival” Mintz Levin antitrust attorneys explain the importance of this case, noting that it has the potential to create important precedent and guidance regarding the use of exclusive contracts, particularly when employed by parties with market power.  The case also serves as an important reminder that private antitrust litigation can often spark the interest of federal antitrust enforcers, as was the case in the FTC’s seminal St. Luke’s matter.  Beyond private litigants, the potential competitive harm from exclusive dealing has been and continues to be scrutinized by the federal antitrust enforcers.

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Dionne Lomax