National Gerimedical Hosp. v. Blue Cross, 452 U.S. 378 (1981)

National Gerimedical Hospital and Gerontology Center v.

Blue Cross of Kansas City
No. 80-802

Argued April 29, 1981
Decided June 15, 1981
452 U.S. 378

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

Syllabus

Prior to the completion of its construction, petitioner, a private, acute care community hospital in the Kansas City, Mo., metropolitan area, sought to enter into a participating hospital agreement with respondent Blue Cross of Kansas City (Blue Cross), a nonprofit provider of individual and group health care reimbursement plans in the area. Blue Cross refused on the basis of its policy barring participation by any new hospital that could not show that it was meeting a clearly evident need for health care services in its service area. Blue Cross relied on petitioner’s failure to obtain approval for construction from the Mid-America Health Systems Agency (MAHSA), a private, nonprofit, federally funded corporation which was the local "health system agency" (HSA) designated for the area under the National Health Planning and Resources Development Act of 1974 (NHPRDA). MAHSA’s major function is health planning for the Kansas City metropolitan area. Petitioner had not sought approval of its construction from MAHSA because of the latter’s announced policy that it would not approve any addition of acute care beds in view of its determination that there was a surplus of hospital beds in the area. Alleging a wrongful refusal to deal and a conspiracy between Blue Cross and MAHSA, which resulted in a competitive disadvantage to it, petitioner filed suit against respondents Blue Cross and the National Blue Cross Association for violation of the Sherman Act. Respondents contended that the NHPRDA had impliedly repealed the antitrust laws as applied to the conduct in question. The District Court granted judgment for respondents, finding a clear repugnancy between the NHPRDA and the antitrust laws, and congressional intent to repeal the antitrust laws in this context. The Court of Appeals affirmed.

Held: Although respondents may have acted with only the highest motives in seeking to implement the plans of the local HSA, they cannot defeat petitioner’s antitrust claim by the assertion of immunity from the requirements of the Sherman Act. Pp. 388-393.

(a) Implied antitrust immunity can be justified only by a convincing showing of clear repugnancy between the antitrust laws and the regulatory system. Even when an industry is regulated substantially, this does not necessarily evidence an intent to repeal the antitrust laws with respect to every action taken within the industry. And intent to repeal the antitrust laws is much clearer when a regulatory agency has been empowered to regulate the type of conduct under antitrust challenge. Pp. 388-389.

(b) The action challenged here was neither compelled nor approved by any governmental regulatory body. Instead, it was a spontaneous response to the finding of only an advisory planning body, the local HSA which, under the NHPRDA, has no regulatory authority over health care providers. And the application of the antitrust laws to the Blue Cross’ conduct would not frustrate a particular provision of the NHPRDA or create a conflict with the orders of any regulatory body. Nor does the NHPRDA require Blue Cross to take an action that, in essence, sought to enforce the advisory decision of MAHSA. There Is no reason to believe that Congress specifically contemplated "enforcement" of advisory decisions of an HSA by private insurance providers, let alone relied on such actions to put "teeth" into the noncompulsory local planning process. Pp. 389-391.

(c) And NHPRDA is not so incompatible with antitrust concerns as to create a "pervasive" repeal of the antitrust laws as applied to every action taken in response to the health care planning process. Respondents have failed to make the showing necessary for an exemption of all such actions. Pp. 391-393.

628 F.2d 1050, reversed and remanded.

POWELL, J., delivered the opinion for a unanimous Court.