ProMedica can end rival's insurance contracts, court rules

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A panel from the Sixth Circuit Court of Appeals on Aug. 10 vacated a preliminary injunction that barred Toledo, Ohio-based ProMedica from dropping its insurance contracts with McLaren St. Luke's Hospital in Maumee, Ohio, and the hospital's physician group, according to Law360

The injunction was issued in an antitrust lawsuit St. Luke's filed in November. The hospital brought the action in an attempt to stop ProMedica from terminating St. Luke's from its insurance network. 

ProMedica notified Grand Blanc, Mich.-based McLaren Health Care in October that the termination of St. Luke's in-network status would be effective Jan. 1, 2021. In its lawsuit, McLaren Health argued the termination notice was issued because of its acquisition of St. Luke's, which is expected to provide greater competition to ProMedica. 

In December, a district court judge granted St. Luke's request for a preliminary injunction barring ProMedica from terminating the contracts between its insurance subsidiary, Paramount, and St. Luke's. 

The appeals court gave several reasons for vacating the preliminary injunction. 

"Because ProMedica had a legitimate business explanation for ending the relationship, St. Luke's is unlikely to show that ProMedica unlawfully refused to continue doing business with it. On top of that, it has little likelihood of establishing an irreparable injury given the option of money damages," states the Aug. 10 opinion. 

The contract between Paramount and St. Luke's stated that Paramount could terminate St. Luke's in-network status if ownership of the hospital changes, according to the court's opinion. 

"The qualification came to fruition when a large healthcare company based in Michigan, McLaren Health, merged with St. Luke's," the court said. "In response, Paramount ended its relationship with St. Luke’s, removing the hospital from its provider network."

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