The Polk County District Court did not exceed its authority in denying class action status to a group of Iowa chiropractors suing Wellmark Blue Cross and Blue Shield for alleged unlawful price fixing, the Iowa Supreme Court held in a Jan. 26 ruling.
This is the sixth appeal the Supreme Court has heard in approximately 10 years between groups of Iowa chiropractors and Wellmark regarding Wellmark’s payment policies relating to chiropractic cases. In this case, the plaintiffs allege the Des Moines-based health insurance company conspired in service agreements with more than 400 employers that self-fund health care coverage for their employees to fix prices paid to chiropractors.
The plaintiff-appellants argue that but for this conspiracy, employers would compete among themselves for chiropractic services for their employees by negotiating directly with chiropractors who would earn higher rates as a result.
Sioux City chiropractor Bradley Chicoine along with two other Iowa chiropractors sought certification from the district court for class-action status for their suit to include 1,300 similarly situated Iowa chiropractors. In response, Wellmark argued that in the plaintiffs’ proposed counterfactual, fees paid to individual providers would be determined by individual variables that would have to be considered case by case to determine whether or not they would be better off in the absence of Wellmark’s service agreements.
The Polk County District Court in 2022 denied the plaintiffs’ motion for class-action certification, concluding there would be winners and losers within the proposed class absent the alleged conspiracy. The district court noted that the “antitrust injury” requirement of the plaintiffs’ claims required that each plaintiff be left worse off as a result of the challenged agreements, but found that it would require a case-by-case assessment of individual providers to determine whether members of the proposed class would have been able to negotiate a higher rate absent the allegedly unlawful Wellmark agreements.
The Iowa Supreme Court affirmed the district court holding in a decision written by Justice Thomas Waterman joined by all justices except Edward Mansfield, who did not participate in the case.
In affirming the trial court, Waterman wrote that “there are too many variables to adjudicate the threshold liability element of antitrust injury on a classwide basis. Ample evidence in the record supports the district court’s finding. Numerous minitrials would be required to determine whether individual chiropractors would be better or worse off without the challenged Wellmark Administrative Services Agreements. Chicoine offered no expert testimony or viable model for a classwide adjudication of an antitrust injury.”
[Disclosure: Nyemaster Goode attorney Benjamin P. Roach represents Wellmark Blue Cross and Blue Shield of Iowa and Wellmark Health Plan of Iowa in this case.]