Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Sykes v. Cross

Supreme Court of North Carolina

June 14, 2019

SUSAN SYKES d/b/a ADVANCED CHIROPRACTIC AND HEALTH CENTER, DAWN PATRICK, TROY LYNN, LIFEWORKS ON LAKE NORMAN, PLLC, BRENT BOST, and BOST CHIROPRACTIC CLINIC, P.A.
v.
BLUE CROSS AND BLUE SHIELD OF NORTH CAROLINA, CIGNA HEALTHCARE OF NORTH CAROLINA, INC., MEDCOST, LLC, and HEALTHGRAM, INC.

          Heard in the Supreme Court on 5 March 2019.

          Appeal pursuant to N.C. G.S. § 7A-27(a) from an order and opinion entered on 5 April 2018 by Judge James L. Gale, Chief Business Court Judge, in Superior Court, Forsyth County, after the case was designated a mandatory complex business case by the Chief Justice under N.C. G.S. § 7A-45.4.

          Oak City Law LLP, by Samuel Pinero II and Robert E. Fields III; and Doughton Blancato PLLC, by William A. Blancato, for plaintiff-appellants.

          Kilpatrick Townsend & Stockton LLP, by Adam H. Charnes, Elizabeth L. Winters, Peter M. Boyle, pro hac vice, and Christina E. Fahmy, pro hac vice, for Blue Cross and Blue Shield of North Carolina; Fox Rothschild LLP, by D. Erik Albright, and Kirkland & Ellis LLP, by Joshua B. Simon, pro hac vice, Warren Haskel, pro hac vice, and Dmitriy Tishyevish, pro hac vice, for Cigna Healthcare of North Carolina, Inc.; and Ellis & Winters LLP, by Stephen D. Feldman, for Medcost, LLC, defendant-appellees.

          NEWBY, JUSTICE.

         This is a companion case to Sykes v. Health Network Solutions, Inc., __ N.C. __, __S.E.2d __(2019) (No. 251PA18) (hereinafter Sykes I). Like its companion, this case raises questions of civil liability based on insurer conduct affecting chiropractic services. Relying on and incorporating its reasoning in Sykes I, the trial court dismissed all claims in this case. Our Court has now issued its opinion affirming the trial court's decision in Sykes I. Because the decision in Sykes I meets the criteria for collateral estoppel, we affirm the trial court's order and opinion in this case.

         This case is one of two putative class actions alleging, inter alia, that defendant insurers contract with Health Network Solutions, Inc. (HNS) to provide or restrict insured chiropractic services in violation of North Carolina's insurance and antitrust laws. Instead of amending the complaint in the companion case, plaintiffs chose to bring this action against defendant insurers separately from their action against HNS and its individual owners. Nevertheless, both actions present essentially the same claims and rely upon the same theories.

         The facts relevant to this case are fully recited in this Court's opinion in Sykes I. HNS is an integrated independent practice association consisting of approximately one thousand, or approximately one-half, of North Carolina's active chiropractors. To enroll in HNS, chiropractors must agree to provide in-network care to patients who are covered by various insurers, namely, defendants in the present action, and with whom HNS has entered into exclusive agreements to provide in-network care. Chiropractors who contract to participate in the HNS network pay fees to HNS based on a percentage of the fees that insurers pay for in-network services.

         In governing its chiropractors and the services they provide, HNS uses a utilization management (UM) program. Through UM, HNS and defendants review and manage enrolled chiropractors based on the cost per patient. The HNS-enrolled chiropractors may be put on probation and subject to potential termination if their average cost per patient exceeds by more than 50% a mean cost that HNS calculates.

         In both of their lawsuits, plaintiffs allege that chiropractors must go through HNS to be deemed "in-network" providers for patients covered by defendant insurers. Plaintiffs contend that HNS's exclusive contracts with defendants enable a "scheme that reduces the number of medically necessary and appropriate treatments" that HNS chiropractors may provide, which has the effect of restricting their output. Plaintiffs contend that these practices allow defendants to avoid paying for medically necessary treatments and appropriate care.

         On 30 April 2013, plaintiffs initiated Sykes I. In that action plaintiffs asserted five claims for relief: (1) requests for a declaratory judgment on certain facts and law referenced in the complaint, including that the agreements described in the complaint "between HNS and Providers" and "between HNS and the Insurers" are "an illegal restraint of trade and anti-competitive"; (2) antitrust claims based on price fixing, monopsony, and monopoly, alleging that HNS, its owners, and insurers have illegally conspired by "[u]sing the Insurers' market power to fix the price of chiropractic services in North Carolina" and "[u]sing its utilization review procedures to continuously lower the availability of chiropractic services in North Carolina"; (3) claims under North Carolina General Statutes section 75-1.1 asserting unfair and deceptive trade practices and acts; (4) breach of fiduciary duties that HNS owners and HNS allegedly owe to the providers by, inter alia, "promoting a scheme to impede competition and restrict prices"; and (5) a request for punitive damages. Plaintiffs later amended their complaint to add a sixth claim for civil conspiracy.

         Plaintiffs outlined four separate product markets in support of their antitrust claims: (1) "the market in which in-network managed care chiropractic services . . . are provided to the Insurers and their North Carolina patients through HNS" (HNS Market); (2) "the market for in-network chiropractic services provided to individual and group comprehensive healthcare insurers and their patients in North Carolina" (Comprehensive Health Market); (3) "the market for insurance reimbursed chiropractic services in North Carolina" (Insurance Health Market); and (4) "the market for chiropractic services provided in North Carolina" (North Carolina Market).

         The trial court denied the defendants' initial motion to dismiss the claims in Sykes I and stayed additional proceedings pending full discovery on market definition. After discovery, plaintiffs decided to pursue the present case separately in addition to their suit against HNS. Thus on 26 May 2015, plaintiffs filed this action against certain North Carolina insurers, specifically, Blue Cross and Blue Shield of North Carolina, Cigna Healthcare of North Carolina, Inc., and Medcost, LLC (Insurers).[1] The case was designated as a mandatory complex business case on 2 June 2015.

         In their Sykes II complaint plaintiffs asserted essentially the same six claims from Sykes I but this time against Insurers: (1) requests for a declaratory judgment on certain facts and law referenced in the complaint, including that the agreements described in the complaint "between HNS and Providers" and "between HNS and the Insurers" are "an illegal restraint of trade and anti-competitive"; (2) antitrust claims, namely, claims for price fixing, monopsony, and monopoly; (3) claims under North Carolina General Statutes section 75-1.1 asserting unfair and deceptive trade practices and acts based on ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.