United States District Court, W.D. North Carolina, Charlotte Division
RAYMOND BENITEZ, individually And on behalf of all others similarly situated Plaintiff,
THE CHARLOTTE-MECKLENBURG HOSPITAL AUTHORITY, d/b/a Carolinas Healthcare System, d/b/a Atrium Health Defendant.
J. Conrad, Jr.United States District Judge.
MATTER comes before the Court on
Charlotte-Mecklenburg Hospital Authority's
(“Defendant”) Motion for Judgment on the
Pleadings, (Doc. No. 22), and the parties' associated
briefs and exhibits, (Doc. Nos. 16, 20-21, 23, 29-30, 47).
Having been fully briefed, the matter is now ripe for
The Governments' Suit
the second time this Court confronts this set of
facts. On June 19, 2016, the United States
Department of Justice and the State of North Carolina
(“the Governments”) filed suit against the
Charlotte-Mecklenburg Hospital Authority d/b/a Carolinas
HealthCare System and Atrium Health (“Defendant”
or “Atrium”) seeking injunctive relief. Doc. No.
1: “Governments' Complaint, ” United
States v. Charlotte-Mecklenburg Hosp. Auth., No.
3:16-cv-311 (W.D. N.C. June 19, 2016) [hereinafter the
Governments' suit]. Defendant is a North Carolina
not-for-profit corporation providing healthcare services with
its principal place of business in Charlotte. (Id.
¶ 1). Its flagship facility is Carolinas Medical Center,
a large general acute-care hospital located in downtown
Charlotte. (Id.). Defendant also operates nine other
general acute-care hospitals in the Charlotte area.
(Id.). The Governments brought a civil antitrust
action to enjoin Defendant “from using unlawful
contract restrictions that prohibit commercial health
insurers in the Charlotte area from offering patients
financial benefits to use less-expensive healthcare services
offered by [Atrium's] competitors.” (Id.
at 1). The Governments contend that “[t]hese steering
restrictions reduce competition resulting in harm to
Charlotte area consumers, employers, and insurers.”
(Id.). The Governments' suit remains pending in
The Current Suit
July 4 and July 10, 2016, Raymond Benitez
(“Plaintiff”), a Charlotte resident, used Atrium
general acute care inpatient hospital services for seven
overnight stays. (Doc. No. 1 ¶ 3, Benitez v. The
Charlotte-Mecklenburg Hosp. Auth., 3:18-cv-95 (W.D. N.C.
Feb. 28, 2018) (i.e., the instant suit)). Plaintiff sought
treatment at Atrium's flagship facility. At the time
services were rendered, Plaintiff was the dependent of
Estelvina Coroas-a policy holder who was insured under a
health insurance policy issued under an agreement between
Tyson Foods (i.e., the insured's employer) and Blue
Advantage Administrators of Arkansas (“Blue
Advantage”), an operating division of Arkansas Blue
Cross and Blue Shield. (Doc. No. 20: Ex. 1). Plaintiff
incurred charges for his healthcare services. (Id.).
While insurance covered most of these charges, Plaintiff paid
Atrium $3, 440.36 as a co-insurance payment. (Doc. No. 1
¶¶ 3, 39) (“A co-insurance payment is the
percentage of the bill for inpatient medical services paid
directly by the insured inpatient consumer, with the rest
paid by the insurance company.”).
time Plaintiff received services from Atrium, Defendant had a
separate contract-a Network Participation Agreement, (Doc.
No. 21: Ex. 5)-with Blue Cross Blue Shield North Carolina
(“BCBSNC”). The Network Participation Agreement
required Atrium to treat any person presenting a “Blue
Card” as a member. A Blue Card establishes evidence of
coverage through an affiliated Blue Cross health plan. Under
the terms of the Network Participation Agreement, Atrium
treated Plaintiff as a Member of BCBSNC, which gave Plaintiff
access to the discounted rates negotiated by BCBSNC with
Defendant. (Doc. No. 21). The primary policy on those records
is BCBS OOS PPO (“Blue Cross Blue Shield Out of
State Preferred Provider Organization”). (Doc. No. 20).
The Network Participation Agreement authorizes Defendant to
seek the collection of any deductibles or copayments, which
are determined by the “Benefit Plan”-"the
particular set of health benefits and services provided or
administered by [BCBSNC] that is issued to an individual or
to a Group.” (Doc. No. 21 at 3). Defendant does not set
deductible or copayment prices; rather, the insurers
establish these costs.
central allegation, derivative from the Governments'
suit, is that Atrium's anti-competitive steering
restrictions drove up prices for inpatient services and thus
inflated the amount of co-insurance he paid. Plaintiff
identifies the relevant product market as “[t]he sale
of general acute care inpatient hospital services to insurers
(‘acute inpatient hospital services')” and
the relevant geographic market as “no larger than the
Charlotte area.” (Id. ¶ 18).
February 28, 2018-almost two years after the Governments
filed suit seeking injunctive relief against
Defendant-Plaintiff commenced the instant suit against
Defendant on behalf of himself and all others similarly
situated. (Doc. No. 1). In this proposed class action for
restraint of trade, Plaintiff seeks classwide damages and
injunctive relief under Section One of the Sherman Act, 15
U.S.C. § 1, and Sections 4 and 16 of the Clayton Act, 15
U.S.C. §§ 15, 26, against Defendant. (Doc. No. 1).
The only difference between the requested relief in
Plaintiff's suit as compared to the Governments' is
that Plaintiff also seeks monetary damages for
Defendant's alleged antitrust violations.
Complaint, Plaintiff references the Governments'
preexisting case and acknowledges that he “relies, in
part, on the [Governments'] thorough assessments of the
[Atrium] restraint of trade and their conclusions as to what
constitutes the public interest.” (Id. ¶
17). Plaintiff characterizes the instant suit as a
“related action seek[ing] a remedy for consumers, who,
as a result of [Atrium's] unlawful conduct, have been
forced to pay [Atrium] above-competitive prices for inpatient
services through co-insurance payments and other direct
payments.” (Id. ¶ 2). Plaintiff seeks
treble damages under 15 U.S.C. § 15 as recompense for
the alleged violations of the Sherman Act and injunctive
relief to enjoin Defendant from continuing to use and
implement anti-steering provisions in its contracts with
12(c) motions are governed by the same standard as motions
brought under Rule 12(b)(6). Occupy Columbia v.
Haley, 738 F.3d 107, 115 (4th Cir. 2013). In its review
of a Rule 12(b)(6) motion, “the court should accept as
true all well-pleaded allegations and should view the
complaint in a light most favorable to the plaintiff.”
Mylan Labs Inc. v. Matakari, 7 F.3d 1130, 1134 (4th
Cir. 1993) (internal citation omitted). But the court need
not accept allegations that “contradict matters
properly subject to judicial notice or by exhibit.”
Blankenship v. Manchin, 471 F.3d 523, 529 (4th Cir.
2006) (quoting Veney v. Wyche, 293 F.3d 726, 730
(4th Cir. 2002)). The court may consider the complaint,
answer, and any materials attached to those pleadings or
motions for judgment on the pleadings “so long as they
are integral to the complaint and authentic.”
Philips v. Pitt Cnty. Mem. Hosp., 572 F.3d 176, 180
(4th Cir. 2009); see also Fed R. Civ. P. 10(c)
(stating that “an exhibit to a pleading is part of the
pleading for all purposes.”). In contrast to a Rule
12(b)(6) motion, the court may consider the answer as well on
a motion brought pursuant to Rule 12(c). Alexander v.
City of Greensboro, 801 F.Supp.2d 429, 433 (M.D. N.C.
plaintiff's “[f]actual allegations must be enough
to raise a right to relief above the speculative
level.” Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 555 (2007). “[O]nce a claim has been stated
adequately, it may be supported by showing any set of facts
consistent with the allegations in the complaint.”
Id. at 563. A complaint attacked by a Rule 12(b)(6)
motion to dismiss will survive if it contains sufficient
factual matter, accepted as true, to “state a claim to
relief that is plausible on its face.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting
Twombly, 550 U.S. at 570). “A claim has facial
plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.”
Id. at 678. Thus, the applicable test on a motion
for judgment on ...