On July 27, the Iowa Supreme Court reversed a lower court ruling in Mueller v. Wellmark Blue Cross, holding that the lower court erred in granting summary judgment to Wellmark on claims that its payment of lower rates to chiropractors than to medical doctors under its preferred provider contracts violated the Iowa antitrust laws. In reversing the lower court ruling, the Iowa Supreme Court held that the State Action Doctrine – on which the lower court had relied in granting summary judgment to Wellmark – did not immunize the alleged conduct.
The Iowa Supreme Court began its analysis by noting that the Iowa antitrust laws are to be "construed to complement and be harmonized with the applied laws of the United States which have the same or similar purpose." Accordingly, the same state action principles that apply under the federal antitrust laws – that to be exempt conduct must be (1) undertaken pursuant to a "clearly articulated and affirmatively expressed" state policy and (2) "actively supervised" by the state – would be applied to plaintiffs' claims.
In reversing the judgment for Wellmark on the issue, the court concluded that Wellmark could not meet the "active supervision" requirements of the state action doctrine. Specifically, the court held that the provisions that Wellmark pointed to in the Iowa Insurance Code as evidence of active supervision were designed to regulate conduct different than the conduct at issue in the case. As the court explained, "Wellmark has not established that the Insurance Division reviews preferred provider agreements in order to regulate the rates paid to different classes of health care providers such as doctors or chiropractors." Instead, according to the court, "the review is designed to assure fair and equitable access to the preferred provider network and to protect nonparticipants in the network." And, because "there is no indication that the Insurance Division reviews the rates and approves the actual rates of payment or regulates the specific terms of access to chiropractors as opposed to physicians," the "active supervision" of chiropractor rates necessary for the State Action Doctrine to apply to plaintiffs' claims had not occurred. Accordingly, the Iowa Supreme Court reversed the lower court ruling for Wellmark on this issue, sending the case back to the trial court for further proceedings.
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