Virginia Academy of Clinical Psychologists v. Blue Shield of Virginia

In 1972, Blue Shield of Virginia and Blue Shield of West Virginia (Blue Shield) (defendants) revised their policies related to coverage for psychotherapy treatment. Up until then, Blue Shield’s plans covered the treatments regardless of whether they were rendered by a psychiatrist or duly licensed psychologist. As revised, however, the plans only covered the treatments rendered by psychologists if they were billed through a physician. Virginia Academy of Clinical Psychologists (VACP) along with Robert J. Resnick, a practicing clinical psychologist, (plaintiffs) sought judicial review of Blue Shield’s revised billing policy, alleging that the policy was anticompetitive in violation of the Sherman Act. A United States district court concluded that Blue Shield’s policies did not violate the act because the clinical psychologist is not competitive with the psychiatrist unless the psychologist is working under the supervision of a medical doctor. The district-court judge viewed the matter as one involving professional pride rather than one of restraint on trade. Accordingly, the district court ruled in favor of Blue Shield. In upholding the policy, the district judge reasoned that Blue Shield’s plans promoted close contact between therapists and physicians and helped Blue Shield ensure that covered treatments were medically necessary. VACP and Resnick appealed.