The Justice Department rebuffed a group of ancillary providers in Northwest Missouri that challenged its proposed settlement in a major managed-care antitrust case.
In its long-awaited response to voluminous comments filed in the case, the antitrust division says it won't reopen the proposed settlement to address complaints that it unfairly favors a "monopolist" hospital.
The proposed settlement must be approved by a federal judge before it can be implemented.
The case involves Heartland Health System of St. Joseph, Mo.; St. Joseph Physicians; and Health Choice of Northwest Missouri, a managed-care plan. The Justice Department used the case to establish rules for physician-hospital organizations in small cities.
That part of the consent decree has not been challenged. But a small provision concerning the referral policy by Heartland Health System, the only hospital in St. Joseph, apparently struck a nerve outside the region.
It elicited 153 comments, extraordinary for an antitrust case, particularly because they address an issue the Justice Department apparently considered peripheral. The department has not yet disclosed all the groups that addressed comments to the court. Nineteen comments came from hospitals outside Buchanan County, where Heartland is located, and 105 comments came from ancillary service providers or trade associations outside the county.
A group calling itself the Coalition for Quality Healthcare, comprising area ancillary providers, filed the most comprehensive comments. The coalition fears the specified referral policy gives Heartland an advantage in referring patients to its own nursing home, hospice, pharmacy and other services. The coalition contends the referral policy "violates a consumer/patient's right to make an informed choice among all ancillary services providers" and "enhances Heartland's capacity to monopolize the ancillary services market."
The coalition asked that the referral policy be deleted or that the court substitute another policy drafted by the coalition. That policy would set up an ombudsman, paid jointly by the competitors, to help patients freely select an ancillary provider.
In its response, the government says the agreed-upon referral policy is "a wholly effective remedy." It further notes that many ways could be found to redress the policy and that many of those may be reasonable. But it says that alone isn't reason enough to throw out the proposed settlement.
Lowell C. Kruse, president of Heartland, said his hospital and the department are seeing eye-to-eye on the consent decree as drafted and prefer not to reopen the case.
Diane Hansen, lawyer for the coalition, said: "We were very disappointed, but the response that they gave us was not unexpected." But, she added, "it's not over yet."
U.S. District Judge Howard Sachs must still rule on the coalition's motion to appear as a friend of the court and rule on the consent decree itself.
So far there is no hearing scheduled at U.S. District Court in Kansas City, Mo.
The Missouri attorney general also is investigating Heartland's ancillary services referral practices. The Justice Department response notes that it cannot preclude any legal action by the state authorities.