Iowa SC mostly upholds decision in chiropractors' class action

Jessica M. Karmasek Aug. 3, 2012, 8:30am


DES MOINES, Iowa (Legal Newsline) - The Iowa Supreme Court last week mostly upheld a lower court's ruling in favor of the state's largest health insurer.

The plaintiffs in the lawsuit, a group of chiropractors, alleged that defendant Wellmark Inc. employed preferred provider arrangements in an "unlawfully discriminatory and anticompetitive manner" in violation of statutory insurance provisions and state antitrust laws.

In its July 27 opinion, the state's high court affirmed in part, reversed in part and remanded the decision of the Polk County District Court.

In their putative class action, the chiropractors alleged they have been "victimized" by Wellmark's "discriminatory practices."

In particular, they claimed Wellmark wrongfully imposes restrictions and pays lower rates for chiropractic services than for equivalent services offered by medical doctors or osteopathic physicians.

They alleged that the insurer not only has violated various insurance regulatory statutes, but also has engaged in unlawful conspiracy and monopolization in violation of the Iowa Competition Law.

Wellmark's business consists of selling health insurance plans to employer groups and providing administrative services to assist others who provide health insurance coverage, such as self-funded governmental entity plans.

It is one of a dozen health insurers in the state, but retains the largest market share.

In this case, the district court granted Wellmark's motion to dismiss claims brought under Iowa's insurance regulatory statutes because no private cause of action is provided therein.

In its ruling last week, the state Supreme Court affirmed that ruling.

"The proper forum for raising alleged violations of those regulatory statutes is through administrative proceedings in the Iowa Division of Insurance," Justice Thomas D. Waterman wrote in the Court's 38-page opinion.

Second, the district court granted Wellmark's motion for summary judgment on plaintiffs' antitrust claims based on the "state action" exemption found in state code.

The Court reversed in part, saying the summary judgment record fails to establish the challenged conduct falls within the exception.

Third, the lower court granted summary judgment on claims alleging Wellmark breached its obligations under a judicially approved national class action settlement in Love v. Blue Cross Blue Shield Association.

The settlement is the only alleged anticompetitive conduct not approved by the state insurance commissioner.

The Court affirmed that decision, concluding the record "contains no evidence" that the insurer's implementation of the Love settlement violated the state's Competition Law.

The Court also affirmed summary judgment on several specific antitrust claims, and remanded the remaining claims and defenses for "further proceedings."

"Plaintiffs' resistance challenged only the admissibility and competency of Wellmark's affidavits. Plaintiffs conceded Wellmark uses the statutory definition of 'chiropractic' in its provider forms," Waterman noted.

"Plaintiffs identified no evidence to avoid summary judgment on these claims."

From Legal Newsline: Reach Jessica Karmasek by email at

More News