The nation's largest laboratory company and two big insurers stand accused of creating a diagnostic monopoly that hasn't passed on savings to consumers.
Three individuals in Northern California are suing Quest Diagnostics, alleging that the company has monopolized outpatient diagnostic services in all parts north of the Bay Area through acquisitions of rivals, provider inducements, collusion and strongarming of payers.
The class action suit argues that Quest billed patients at unfair, above-market prices that their health plans -- Blue Shield of California and Aetna -- passed onto them through increased outpatient payment obligations.
"Quest has acquired, and continues to exploit, its monopoly position in the relevant market for plan/out-patient billing through at least three exclusionary practices," write lawyers J. Ross Wallin and colleagues. The company, they allege, has "paid kickbacks to medical providers in the form of dramatically below-cost billings," schemed with "two major private health insurers to suppress its competition," and "acquired its competitors for plan/out-patient billing in order to eliminate their competition."
Among the specific charges in the suit are allegations that Quest's place as a "preferred provider" or discount lab resulted in rival labs getting kicked out of payer networks or resulting in high out-of-pocket costs for patients.
I covered the rest of the antitrust allegations in Healthcare Finance News, along with the rise of Quest's lab empire and some emerging threats to it.