A federal appeals court refused to revive a $300 million lawsuit accusing St. Francis Medical Center of violating antitrust laws by carving other Peoria, Ill., providers out of its exclusive contracts with commercial insurers.
A three-judge panel of the U.S. Court of Appeals for the 7th Circuit ruled that St. Francis' insurer contracts did not have a significant exclusionary effect on other hospitals in the Peoria market.
St. Francis' main rival, Methodist Health Services Corp. had sued the 616-bed hospital in 2013, alleging its insurer contracts hurt competition in the area. The lawsuit alleged the contracts forced payers and consumers to pay $300 million more in healthcare costs than they would in a competitive environment.
But none of the other four hospitals in the region nor the insurers joined Methodist's suit, the court noted, and Methodist has its own exclusive contracts with insurers as well.
"Methodist is not the representative of any insurer or of any consumer; it's simply an unsuccessful competitor with a hospital that offers patients insured by health insurance companies more healthcare than it does," Judge Richard Posner wrote for the panel.
St. Francis has the only Level 1 trauma center in the region and also provides inpatient services that other hospitals in the area can't, such as neonatal intensive care and solid-organ transplants. Posner said it was "no surprise" that some commercial insurance companies have sought exclusive relationships with St. Francis.
Approximately one-third of commercially insured patients in the Peoria region are on a Blue Cross and Blue Shield PPO plan where St. Francis is an in-network provider, but Methodist is not. All in all, St. Francis' exclusive contracts cover about one half of the commercial market in the area.
A district judge granted summary judgment for St. Francis in September 2016.
OSF HealthCare, the owner of St. Francis, said in a statement that it was pleased with the ruling.
"As we stated from the beginning, we were confident OSF HealthCare fully complied with all antitrust laws and regulations while providing high-quality healthcare throughout the region," Kevin Schoeplein, CEO of OSF HealthCare, said in a statement.
Methodist did not respond to a request for comment on Monday.
