DES MOINES, Iowa (Legal Newsline) – The Iowa Supreme Court has reversed a district court decision that would have allowed a collective of similarly situated chiropractors to sue a health insurance company over alleged antitrust violations in the state.
Attorneys for the plaintiffs in the district court case Mueller v. Wellmark Inc. cited the Iowa Competition Act, according to court documents. A civil complaint was filed in 2007 by Steven Mueller, a chiropractor who alleged Wellmark breached a contract in a $17,376 billing dispute.
Several other chiropractors joined Mueller in May 2008 to engage in legal action against Wellmark. This included filing an amended petition for claims in a class of Iowa chiropractors who “have billed for services provided to patients enrolled in
Wellmark health insurance plans.”
According to the decision,the plaintiffs alleged
Wellmark "discriminatorily fixed prices for services performed by
chiropractors at rates lower than those paid to medical doctors and
doctors of osteopathic medicine. Their amended petition
alleged violations of Iowa insurance regulatory statutes, the Iowa
Competition Law (Iowa Code chapter 553), and a national class-action
settlement. The district court, without certifying this case as a class action, granted Wellmark’s motions to dismiss and for
summary judgment. Plaintiffs appealed."
This led to the case being heard by the court for a first time in 2009. The court reversed the district court’s summary
judgment dismissing antitrust claims against Wellmark based on the
state-action exemption in Iowa Code section 553.6(4) (2009).
The court remanded the case for further proceedings on plaintiffs’ claims
under the Iowa Competition Act. Meanwhile, the collective of chiropractors commenced an administrative
action in the Iowa Insurance Division to litigate the violations of the
insurance regulatory statutes.
Dec. 31, 2012, Wellmark moved to dismiss or stay the civil action
pending the insurance commissioner’s decision in the related
administrative action," the Supreme Court's opinion states. The commissioner decided in favor of Wellmark, who had argued the commissioner had primary
jurisdiction "because the regulator was better suited to analyze the
complex antitrust allegations and any effects on insurance markets," the opinion states.
There was resistance from the plaintiffs who argued that there wasn't a need to await the commissioner's decision because the amended petition alleged "per se" violations. As such, there was no requirement for the regulator's analysis of the market.
According to the court, under a per se violation, an agreement is “so plainly
anti-competitive that no elaborate study of the industry is needed to
establish . . . illegality.” A contrasting rule-of-reason claim “requires plaintiffs to demonstrate that a
particular arrangement ‘is in fact unreasonable and anti-competitive
before it will be found unlawful.’”
The ruling means that proper procedures were not followed and the district court was found to have erred in allowing the case to proceed without class certification in the first place, according to the Supreme Court.