In Lori Rubenstein Physicial Therapy, Inc.,et al v. PTPN, Inc. et al, (Cal. App. 2007),the plaintiffs challenged legislation adopted by the State of California in (1982) that provided anti-trust immunity for preferred provider organizations ("PPOs") formed from groups of independent physicians to contract with health care insurers for alternative rates for their services. The defendants were PTPN, a physical therapy practice and Blue Cross of California, which gave PTPN an exclusive contract for physical therapy services. The plaintiffs were providers of physical therapy services who could not contact with Blue Cross. The suit alleged that PTPN's limitations on membership unlawfully restrains competition for Blue Cross insured patients and have foreclosed actual and potential competitors of PTPN from competing on the merits for patients with private health insurance. The California statute seems to be one of those "provider cooperation laws" passed by a number of states following California Liquor Dealer's Association v. Midcal Aluminum, Inc., 445 U.S. 97 (1980), wherein the Supreme Court held that states could provide a blanket of antitrust immunity over private action if 1) the state policy was clearly articulated and 2) the activity was actively supervised by the state. These statutes were never widely used perhaps because of concern over the "state supervision" requirements.
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