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 7th U.S. Circuit Court of Appeals 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., 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 insurers have sought exclusive relationships with St. Francis.