In a rare move, on February 8, 2018, the U.S. Department of Justice (DOJ) filed a Statement of Interest on behalf of the United States (Statement of Interest) in Marion Healthcare, LLC v. Southern Illinois Healthcare, Civil Action No. 3:12-CV-00871 (S.D. Ill.), a private antitrust case in which Defendant Southern Illinois Healthcare (SIH) has moved for summary judgment.  In its Statement of Interest, DOJ requests that the court reject SIH’s argument that certain types of  exclusive contracts between providers and payors should be considered per se legal under the antitrust laws.

In Marion, Plaintiff Marion Healthcare, LLC (MHC) alleges that SIH entered into exclusive arrangements with certain health insurers that effectively excluded MHC from competing for outpatient services in Southern Illinois.  On October 13, 2017, SIH filed a Motion for Summary Judgment, in which it relied on Method Health Services Corp. v. OSF Healthcare System (Methodist II), 859 F.3d 408 (7th Cir. 2017) to argue that exclusive contracts of short duration that do not promote high prices or bankruptcy for competitors should not survive summary judgment in the Seventh Circuit.

In its Statement of Interest, DOJ argues that SIH’s s attempt to convert Methodist II into “per se legality” in the Seventh Circuit is “unsound.”  Although it acknowledges that exclusive contracts are not necessarily anticompetitive, DOJ argues that, under certain conditions, exclusive dealing could be anticompetitive.  With respect to exclusive provider and payor agreements, DOJ observes that an insurance product could be considered unmarketable if it lacks a crucial hospital.  The crucial hospital, therefore, could leverage its position to deny patient volume to competing rivals by entering into an exclusive contract.  DOJ reasons that competing providers could not “easily overcome a hospital’s must-have status by replicating its services,” due to expense or certain regulatory and legal limitations.  Accordingly, DOJ asks the court to “reject [SIH’s] invitation to adopt a rule of per se legality, and instead consider the evidence proffered to determine whether there is a genuine issue of disputed fact for trial.”

SIH’s Motion for Summary Judgment may be found here.  DOJ’s Statement of Interest may be found here.