SAN DIEGO, May 2, 2012 (GLOBE NEWSWIRE) -- American Specialty Health Group, Inc. ("ASH") has amended its complaint against Healthways, Inc. to add claims for antitrust violations under the Sherman Act, which allows for the recovery of treble damages. The new claims are being added as a result of further investigation into Healthways' continued "aggressive and illegal campaign to drive out competition in the" Fitness Program Market with Medicare Advantage Plans "by preventing ASH, its most significant competitor, from selling its superior, cost-effective, competing product." The suit, initially filed on December 2, 2011 in the Southern District of California, concerns Silver&Fit® and SilverSneakers®, the Medicare Advantage fitness benefit programs that ASH and Healthways respectively provide to health plans.
ASH alleges that Healthways "insists that its SilverSneakers contracted fitness facilities sign an exclusivity contract that prevents these facilities from contracting with ASH or any other competitor offering a Medicare Advantage fitness program." The amended complaint contains allegations of continued "threats" by Healthways to fitness facilities "that would otherwise prefer to contract with both Healthways and ASH," and summarizes recent instances of "facilities, afraid to be cut off from the volume of Medicare beneficiaries that the dominant market player can deliver," responding "to Healthways' threats by agreeing to terminate ASH." These terminations have taken place since ASH filed its initial complaint. One fitness facility is quoted as saying "[Healthways] will not allow my facility to enroll in their program when I am enrolled in Silver&Fit. As of right now I have more Silver Sneakers members. I would like to be able to re-enroll at a later date if Silver Sneakers will permit."
The amended complaint also points out that, even though "Healthways' contracts with the facilities may be for one-year terms," they actually "are evergreen and, due to the realities of the Medicare Advantage contracting process and approval timeline, operate de facto in perpetuity regardless of their stated term." The amended complaint explains that because of the annual Medicare contracting cycle, ASH believes Healthways has placed it in a Catch 22: "Medicare Advantage contractors have financial incentives to avoid member disruption; yet the exclusivity agreements that Healthways puts in place with fitness facilities guarantee that member disruption will take place if a health plan switches between Healthways and ASH, because fitness facilities cannot be members of both networks. It is also unrealistic to think that fitness facilities might switch from Healthways to ASH unless ASH can guarantee the same volume of members to the facility, which ASH cannot do without the health plans."
"By depriving Medicare Advantage contractors of competitive options, Healthways' conduct has devastating effects on the costs of health care. Healthways pads its own margins while driving up the costs of providing fitness benefit products to Medicare Advantage contractors, driving down the reimbursements that fitness facilities receive, and eliminating competitive options for Medicare Advantage contractors and Medicare beneficiaries. As a result of Healthways' conduct, fitness facilities—including important not-for-profit community businesses like YMCAs that would otherwise invest funds in critical community program like after-school programs—lose valuable opportunities to reinvest in or expand their businesses," the amended complaint states.
ASH's counsel, Elizabeth Mann of Mayer Brown LLP, explained that "ASH believes that these types of increased health care system costs are why exclusivity requirements in health care contracts disappeared long ago."
George DeVries, ASH's CEO, continues, "As Americans struggle to see the delivery of quality health care at an affordable price, the last thing we need is to encourage exclusive contracting with providers, with its proven economic costs and ability to restrict choice. It will be harmful for U.S. health care delivery if Healthways' behavior is continued, since this type of anticompetitive conduct could spread."
ASH seeks to enjoin "Healthways' unlawful, unfair, and fraudulent conduct," damages in excess of $15,000,000, treble damages pursuant to the Sherman Act, and "restitution as authorized by law."
The case is American Specialty Health Group, Inc. dba American Specialty Health Networks v. Healthways, Inc., case number 11-cv-2819, in the U.S. District Court for the Southern District of California. A copy of the amended complaint can be found at http://www.ashcompanies.com/wcmgenerated/FACAgainstHealthways_tcm19-62865.pdf
About the Silver&Fit Program
The Silver&Fit Program is an integrated fitness and healthy aging program for Medicare beneficiaries who want to improve their quality of life by exercising more. This, in turn, may help them lower their risk for heart disease, strokes, and other chronic conditions; cope with existing medical issues; prepare for medical procedures; and prevent falls. Silver&Fit Program members have access to no- or low-cost memberships at a comprehensive Silver&Fit-contracted network of fitness facilities and exercise centers. For more information, visit SilverandFit.com or call 1-800-848-3555.
About American Specialty Health Incorporated
The Silver&Fit program is provided by American Specialty Health Group, Inc., a subsidiary of American Specialty Health Incorporated (ASH). ASH is a national health services organization that provides a total population health management program, specialty health care management programs, and fitness programs to health plans, insurance carriers, employer groups, and trust funds. Based in San Diego, ASH has more than 800 employees and serves nearly 30 million members. For more information, visit ASHCompanies.com or call 1-800-848-3555.