For someone who just had an antitrust lawsuit tossed out of court, Chris Riedel is remarkably upbeat. Riedel, the chief executive officer of Hunter Laboratories in Campbell, Calif., told Laboratory Industry Report that his legal team is moving forward with an amended complaint in the federal lawsuit against Quest Diagnostics, Aetna, Blue Shield of California, and the Blue Cross Blue Shield Association. Hunter and several other California labs contend that the defendants engaged in anti-competitive behavior to squeeze smaller labs out of the networks of the two health plans. The lawsuit, filed last November by Rheumatology Diagnostics Laboratory Inc., Pacific Breast Pathology Medical Corp., Surgical Pathology Associates, and Hunter Labs, alleged that the insurers conspired to allow Quest to monopolize markets for specialized testing. The U.S. District Court for the Northern District of California dismissed the case June 25, saying the allegations were not adequately supported. “A [dismissal] with leave to amend is very common with antitrust suits,” said Riedel, who praised the rationale given by U.S. District Judge Jon S. Tigar in his decision to throw out the suit. “The judge gave us a very nice roadmap” in terms of how Hunter and the other plaintiffs should craft their […]
For someone who just had an antitrust lawsuit tossed out of court, Chris Riedel is remarkably upbeat.
Riedel, the chief executive officer of Hunter Laboratories in Campbell, Calif., told Laboratory Industry Report that his legal team is moving forward with an amended complaint in the federal lawsuit against Quest Diagnostics, Aetna, Blue Shield of California, and the Blue Cross Blue Shield Association.
Hunter and several other California labs contend that the defendants engaged in anti-competitive behavior to squeeze smaller labs out of the networks of the two health plans. The lawsuit, filed last November by Rheumatology Diagnostics Laboratory Inc., Pacific Breast Pathology Medical Corp., Surgical Pathology Associates, and Hunter Labs, alleged that the insurers conspired to allow Quest to monopolize markets for specialized testing.
The U.S. District Court for the Northern District of California dismissed the case June 25, saying the allegations were not adequately supported.
“A [dismissal] with leave to amend is very common with antitrust suits,” said Riedel, who praised the rationale given by U.S. District Judge Jon S. Tigar in his decision to throw out the suit. “The judge gave us a very nice roadmap” in terms of how Hunter and the other plaintiffs should craft their amended complaint, Riedel noted.
Hunter’s ability to act as a gadfly to the national labs is not to be underestimated. Riedel filed a qui tam lawsuit against Quest and LabCorp in 2005, claiming they overbilled California’s Medicaid program. The two labs eventually settled the suit for a combined $290.5 million.
This most recent lawsuit alleged the health plans had agreed to accept from Quest discounts in tests in exchange for “pull-throughs”—essentially a guarantee for a bulk book of business. And the Blue Cross Blue Shield Association allegedly made changes in its billing rules for out-of-state labs that essentially rendered scores of labs as out-of-network providers.
As a result, the plaintiff labs said they were essentially cut out of Aetna’s and Blue Shield’s provider networks.
“Our lab has been hammered because Blue Shield took us out of their network,” Riedel said, adding that the San Francisco-based health plan represents about 10 percent of the lab business in California.
However, Tigar dismissed the suit because the plaintiffs did not show that all the defendants were acting in concert, nor did they demonstrate Quest’s market shares increased as a result of the offers it made to the payers.
Riedel did not give specifics about how the lawsuit might be amended, but he suggested that it would be reborn with even greater force.
“We’re even having other labs call us, asking to join the suit,” he said.
The attorneys for Quest, Aetna, and Blue Shield did not respond to requests for comment.
Aetna has already come under fire for keeping contracted lab rates well below Medicare and favoring laboratories with nationwide reach over regional players.
“Most labs in our network are in fact contracted nationally [by our national contracting unit] at Aetna,” said spokesperson Cynthia Michener. “Only a small number of local labs might be contracted by a state team.”
