9th Circuit Revives Kaiser Antitrust Case

A Ninth Circuit panel revived an antitrust lawsuit accusing health care giant Kaiser Permanente of trying to monopolize the health insurance market in California’s Solano County, reported Courthouse News.

The hospital group, NorthBay Healthcare, accuses Kaiser Permanente of steering insured trauma patients away from its hospitals and instead only sending uninsured patients.

Northbay also accuses Kaiser of breaking a reimbursement agreement with NorthBay and cutting the amount the hospital could recoup for its medical services, according to a complaint filed in the Northern District of California in 2017.

Kaiser did these things to financially harm NorthBay and a competitor insurance provider, Western Health Advantage, according to their complaint.

US Magistrate Judge Laura Beeler dismissed the lawsuit finding NorthBay failed to show the four essential elements of “causal antitrust injury” and therefore could not support its monopolization and conspiracy to monopolize claims.

On Tuesday, December 8, a divided Ninth Circuit panel reversed Beeler and resuscitated the case.

The majority found NorthBay had made a sufficient showing that Kaiser was involved in unlawful conduct, despite Beeler finding the scenario where “lucrative patients” were steered away to drain NorthBay of its resources was lacking.

“However ‘fanciful’ these facts may seem is irrelevant,” the majority wrote in an unpublished memorandum opinion. “Given that only the claim needs to be plausible, and not the facts themselves, we disagree with the district court’s conclusion that any further factual enhancement was necessary.” 

Read the full opinion here.