Take 5

North Carolina Business Court Denies Hospital’s Motion to Dismiss Monopoly Maintenance Claims

April 27, 2023

The North Carolina Business Court has denied a motion to dismiss monopoly maintenance claims filed by a hospital, accused of using anticompetitive contracts to prevent other healthcare providers from offering inpatient services in outlying regions of western North Carolina.

The initial complaint alleged that the defendants held a monopoly on the provision of inpatient medical services in certain counties within the state, through their flagship hospital—Mission Hospital-Asheville. The plaintiffs claimed that the hospital, by using its negotiating power, included anticompetitive contractual restraints in its contracts with commercial health insurers, thereby extending its monopoly to other markets within western North Carolina, in violation of antitrust law.

In a September 19, 2022 Order and Opinion, the Court dismissed the monopoly claims without prejudice but ruled that the plaintiffs had stated a valid claim for relief on their accompanying claim for restraint of trade. Following the Court’s ruling, the plaintiffs filed a First Amended Complaint containing additional allegations to address the identified defects in their original monopoly claims.

The defendants filed a new motion to dismiss, arguing that the amended monopoly claims were still subject to dismissal as a matter of law. The North Carolina Business Court has now denied the hospital’s motion to dismiss, determining that the plaintiffs’ new allegations are sufficient to state valid claims for relief on a monopolization theory.

This decision highlights the increasing scrutiny of healthcare providers’ business practices and the importance of adhering to antitrust laws in the healthcare industry. The outcome of this case could have significant implications for healthcare providers and their contractual arrangements with commercial health insurers.

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