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Kartell v. Blue Shield of Massachusetts, Inc.

United States Court of Appeals for the First Circuit
749 F.2d 922 (1984)


Facts

Blue Shield of Massachusetts (Blue Shield) (defendant) directly paid physicians for medical treatment rendered to individual subscribers of its Blue Shield health insurance plan. In order to receive payment, the physicians were required to sign a standard agreement promising to accept the Blue Shield payment in full and not to separately charge patients for services. The patient paid nothing out of pocket. Virtually all Massachusetts physicians participated in the Blue Shield program and Blue Shield covered nearly 74% of all privately insured Massachusetts residents. Kartell (plaintiff) and several other Massachusetts physicians brought suit against Blue Shield claiming the requirement to not separately charge patients, also known as a “ban on balance billing”, violated § 1 of the Sherman Act (prohibition against agreements restraining trade) and § 2 of the Sherman Act (prohibition against agreements creating monopolization). The district court found that Blue Shield’s practice violated § 1 of the Sherman Act because Blue Shield’s payment-in-full requirement interfered with the physicians’ freedom to set higher prices for more expensive services. Blue Shield appealed.

Rule of Law

Issue

Holding and Reasoning (Breyer, J.)

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