Case Name: DESGRANGES PSYCHIATRIC CENTER, PC v. BLUE CROSS & BLUE SHIELD OF MICHIGAN
Court: Michigan Court of Appeals
Jurisdiction: Michigan
Decision Date: 1983-02-11
Citations: 124 Mich. App. 237
Docket Number: Docket No. 54787
Parties: DESGRANGES PSYCHIATRIC CENTER, PC v BLUE CROSS & BLUE SHIELD OF MICHIGAN
Judges: Before: M. J. Kelly, P.J., and T. M. Burns and Mackenzie, JJ.
Reporter: Michigan appeals reports; cases decided in the Michigan Court of Appeals.
Volume: 124
Pages: 237–248

Head Matter:
DESGRANGES PSYCHIATRIC CENTER, PC v BLUE CROSS & BLUE SHIELD OF MICHIGAN
Docket No. 54787.
Submitted March 10, 1982, at Lansing.
Decided February 11, 1983.
Leave to appeal applied for.
Plaintiff Desgranges Psychiatric Center, P.C., provides outpatient mental health care services to children and their families. The center was incorporated by plaintiff Louise Desgranges, M.D., a child psychiatrist, and employs plaintiff Kathleen Desgragnes, who has a master’s degree in social work. Dr. Desgranges became a participating physician on November 11, 1978, under a contract with defendant, Blue Cross and Blue Shield of Michigan, which provided that the doctor must certify that the services she provides and for which she seeks reimbursements are performed personally by her or under her direct and personal supervision and in her presence. On January 12, 1979, Dr. Desgranges requested an application to secure a participation agreement with defendant for her psychiatric center for reimbursement for outpatient child psychiatry care. The request for an application was never granted due to a moratorium imposed by defendant on the granting of any further outpatient psychiatric clinic participation agreements. Had the application been granted, the clinic could have been reimbursed for services by a social worker with a master’s degree. Plaintiffs thereafter brought an action in the Genesee Circuit Court charging defendant with a violation of Michigan’s antitrust statute and with maintaining an unlawful monopoly. Plaintiffs further alleged that the requirement of Dr. Desgranges’ reimbursement agreement that she be personally present when psychiatric care is given is an unconscionable contract provi sion that inhibits the doctor from engaging in medically accepted methods of diagnosis and treatment. The trial court, Philip C. Elliott, J., ruled that defendant’s maintenance of its moratorium on the approval of new outpatient psychiatric clinics was unreasonable and violated Michigan antitrust statutes. The trial court made no ruling on plaintiffs’ claims that the personal presence requirement of the doctor’s reimbursement agreement with defendant is unconscionable. Defendant appeals and plaintiffs cross-appeal. Held:
References for Points in Headnotes
54 Am Jur 2d, Monopolies, Restraints of Trade, and Unfair
Trade Practices §§ 21, 449, 458.
54 Am Jur 2d, Monopolies, Restraints of Trade, and Unfair Trade
Practices §§ 34, 43. [3] 61 Am Jur 2d, Physicians, Surgeons, and
Other Healers §§ 158-165.
61 Am Jur 2d, Physicians, Surgeons, and Other Healers §§ 378-392.
[No reference]
1. The evidence presented below was not sufficient to establish that defendant combined or conspired with any other party to restrain trade in violation of Michigan’s antitrust statute, MCL 445.701; MSA 28.31. The trial judge’s findings of fact do not contain a determination that an unlawful combination between defendant and certain outpatient psychiatric clinics was established. It was not shown that the agreements restrained trade.
2. There is no evidence that the participation agreements between defendant and various outpatient psychiatric clinics contain any provision that would inhibit defendant from entering into a similar agreement with plaintiffs. The decision to impose the moratorium on any further such agreements appears to have been made solely by defendant.
3. The evidence in the record refutes plaintiffs’ argument that defendant is composed of a diversity of constituent groups which make defendant itself a combination of two or more entities.
4. The record establishes that defendant’s decision not to contract with plaintiffs was a unilateral one. A unilateral action, no matter how anticompetitive it may be, does not amount to a combination to restrain trade. Therefore, the trial court erred in finding defendant’s actions constituted a combination to restrain trade.
5. A remand is not necessary to determine whether the provision in defendant’s reimbursement contract with Dr. Desgranges, that she be personally present when psychiatric care is administered, is unconscionable and unreasonable since the Court of Appeals has held that such a clause does not invade the physician-patient relationship and has noted that doctors are still free to use social workers without master’s degrees in their clinics. The only difference is the financial source to which they must now look for compensation.
Reversed.
Mackenzie, J., concurred with the holding that the record contains insufficient evidence that the moratorium was the result of a combination to support the trial court’s finding of a violation of MCL 445.701; MSA 28.31. However, she did not agree with all of the majority’s reasoning. She noted:
1. The moratorium unilaterally imposed by defendant bears no reasonable relationship to the need for outpatient psychotherapy clinics and specifically outpatient child psychotherapy clinics. The moratorium does not reduce waste or unnecessary treatment, but instead cuts defendant’s costs by discouraging subscribers from utilizing benefits which defendant has contracted to provide.
2. A new statute, MCL 550.1502(3); MSA 24.660(502X3), evidently permits restrictions in participation agreements such as those at issue here. Fortunately, subscribers and providers will soon have a remedy under a new act, MCL 550.1501 et seq.; MSA 24.660(501) et seq., which requires defendant to develop a provider class plan. Providers and subscribers will be able to raise the concerns expressed here when the Commissioner of Insurance eventually determines whether defendant is meeting the required goals.
Opinion of the Court
1. Monopolies — Antitrust.
The most basic element of a cause of action under Michigan’s antitrust statute is proof of the requisite combination of two or more entities (MCL 445.701; MSA 28.31).
2. Monopolies — Anticompetitive Actions — Unilateral Actions — Combinations to Restrain Trade.
A unilateral action, no matter how anticompetitive it may be, does not amount to a combination to restrain trade (MCL 445.701; MSA 28.31).
3. Physicians and Surgeons — Physician-Patient Relationship — Participation Agreements.
A clause contained in a participation agreement between a doctor and a voluntary nonprofit medical care and hospital service corporation which requires the doctor to certify that the services he provides and for which he seeks reimbursements are performed personally by him or under his direct and personal supervision and in his presence does not invade the physician-patient relationship.
Concurrence by Mackenzie, J.
4. Physicians and Surgeons — Health Care Providers — Reimbursement Contracts.
The statute regarding reimbursement contracts of professional health care providers permits restrictions in reimbursement provisions of a provider contract or reimbursement arrangement which require the doctor to certify that the services he provides and for which he seeks reimbursements are performed personally by him or under his direct and personal supervision and in his presence (MCL B50.1502[3]; MSA 24.660[502][3]).
5. Physicians and Surgeons — Nonprofit Health Care Corporations — Provider Class Plan.
A health care corporation is required under the Nonproñt Health Care Corporation Reform Act to develop a provider class plan in conformity with the requirements of the act (MCL SS0.1B01 et seq.; MSA 24.660[B01] et seq.).
Pelavin, Pelavin & Powers, P.C. (by Frumeth Brenda Hirsh), for plaintiffs.
Foster, Swift, Collins & Coey, P.C. (by Theodore W. Swift and William K. Fahey), and Michael T. Zajac and Daniel E. Lazaroff, of counsel, for defendant on appeal.
Before: M. J. Kelly, P.J., and T. M. Burns and Mackenzie, JJ.

Opinion:
Per Curiam.
Coming before this Court on an appeal as of right, defendant Blue Cross-Blue Shield of Michigan argues that the lower court erred in entering a declaratory judgment on November 5, 1980, finding that defendant's refusal to contract with plaintiffs constituted a combination to restrain trade in violation of the provisions of MCL 445.701; MSA 28.31. Plaintiffs cross-appeal as of right from the trial judge's refusal to award them damages for the alleged antitrust actions of defendant and the trial judge's failure to find that the provision in the contract between the defendant and Dr. Louise Desgranges requiring the doctor to be personally present when any psychiatric care was given to a patient by the plaintiff psychiatric center was unconscionable and void as against public policy.
Plaintiff Desgranges Psychiatric Center is a professional corporation that provides outpatient mental health care services to adolescent children and their families. It was incorporated by Dr. Desgranges, a child psychiatrist, and the staff includes a full psychologist as well as plaintiff Kathleen Desgranges, who has a master's degree in social work.
Defendant, a voluntary nonprofit medical care and hospital service corporation, has provided service benefits for outpatient medical health care administered by a participating clinic since 1966. In January, 1979, Dr. Desgranges requested an application to secure a participation agreement with defendant for reimbursement for outpatient child psychiatry care.
On November 11, 1978, Dr. Desgranges became a participating physician under a contract with defendant. Pursuant to this contract, Dr. Desgranges must certify that the services she provides and for which she seeks reimbursements are performed personally by her or under her direct and personal supervision and in her presence. Thus, plaintiffs can receive reimbursement only for services provided personally by Dr. Desgranges and only for psychological testing conducted by a certified psychologist.
Dr. Desgranges' January 12, 1979, request for an application to secure a participation agreement with defendant for her psychiatric center was never granted due to a moratorium imposed by defendant on the granting of any further outpatient psychiatric clinic participation agreements. Had the application been granted, Dr. Desgranges' clinic could have been reimbursed for services by a social worker with a master's degree as well as services by a psychiatrist.
In the instant action, plaintiffs charge defendant with violating Michigan's antitrust statute by maintaining its moratorium on the approval of new outpatient psychiatric clinics for participation in defendant's reimbursement scheme. Plaintiffs also allege that defendant maintains an unlawful monopoly over the outpatient psychiatric service market in Genesee County and that the requirement of Dr. Desgranges' reimbursement agreement that she would be personally present when psychiatric care is given is an unconscionable contract provision that inhibits Dr. Desgranges from engaging in medically accepted methods of diagnosis and treatment.
Following a lengthy hearing held below, the trial judge ruled that defendant's maintenance of its moratorium on the approval of new outpatient psychiatric clinics was unreasonable and violated Michigan's antitrust statutes. The trial judge made no ruling on plaintiffs' claim that the "personal presence" requirement of Dr. Desgranges' reimbursement agreement with defendant is unconscionable.
The dispositive issue in this appeal is whether the evidence presented below was sufficient to establish that defendant combined or conspired with any other party to restrain trade in violation of Michigan's antitrust statute. That statute, MCL 445.701; MSA 28.31, makes it unlawful in this state to participate in:
"a combination of capital, skill or arts by two or more persons, firms, partnerships, corporations or associa tions of persons, or of any two or more of them, for either, any or all of the following purposes:
"1. To create or carry out restrictions in trade or commerce;
"3. To prevent competition in manufacturing, making, transportation, sale or purchase of merchandise, produce or any commodity."
As was noted by this Court in Metro Club, Inc v Schostak Brothers & Co, Inc, 89 Mich App 417, 419; 280 NW2d 553 (1979), the most basic element of a cause of action brought under this statute is proof of "the requisite combination of two or more entities". Plaintiffs sought to prove the existence of an unlawful combination between defendant and certain outpatient psychiatric clinics by showing that they were parties to a participation agreement that restrained trade. However, the trial judge's findings of fact do not contain a determination that such a combination was established.
The mere fact that participation agreements between defendant and various outpatient clinics exist is insufficient proof of an illegal combination without evidence to show that the agreements restrained trade. Id. Plaintiffs' theory that the agreements restrain trade is seriously undermined by plaintiffs' admission that they enable "subscribers to receive health care benefits". Thus, they would appear to facilitate trade. Most damaging to plaintiffs' argument that the agreements are unlawful is the fact that the purpose of this lawsuit is to obtain such an agreement. If the agreements are unlawful, then this Court cannot affirm the lower court judgment as to do so would have the effect of ordering defendant to enter into an unlawful contract with plaintiffs.
Further, there is no evidence in the record that defendant and the participating outpatient psychiatric clinics entered into any type of agreement that would deny plaintiffs an opportunity to secure such a participation agreement. Specifically, there is no evidence that the participation agreements between defendant and various outpatient psychiatric clinics contain any provision that would inhibit defendant from entering into a similar agreement with plaintiffs. Rather, the decision to impose a moratorium on any further such agreements appears to have been made solely by defendant.
We recognize plaintiffs' argument that defendant is composed of a diversity of constituent groups which make defendant itself a combination of two or more entities. However, the evidence in the record refutes this argument. Unlike the situation in Virginia Academy of Clinical Psychologists v Blue Shield of Virginia, 624 F2d 476 (CA 4, 1980), cert den 450 US 916; 101 S Ct 1360; 67 L Ed 2d 342 (1981), defendant's bylaws do not require that a majority of the board of directors be physicians or psychiatrists. In fact, nearly 60% of defendant's board of directors are consumer representatives. Because of the structure of defendant's board of directors then, the questionable type of provider control criticized by the Virginia Academy court is not present in this case. For this reason that case is distinguishable. Human Resource Institute of Norfolk, Inc v Blue Cross of Virginia, 498 F Supp 63 (ED Va, 1980).
Thus, the record establishes that defendant's decision not to contract with plaintiffs was a unilateral one. A unilateral action, no matter how anticompetitive it may be, does not amount to a combination to restrain trade. Theatre Enterprises, Inc v Paramount Film Distributing Corp, 346 US 537; 74 S Ct 257; 98 L Ed 273 (1954); Overseas Motors, Inc v Import Motors Ltd, Inc, 375 F Supp 499 (ED Mich, 1974), aff'd 519 F2d 119 (CA 6, 1975). Therefore, the lower court erred in finding that defendant's actions constituted a combination to restrain trade in violation of MCL 445.701; MSA 28.31.
Although the lower court did not render a decision on whether the provision in defendant's reimbursement contract with Dr. Desgranges that she be "personally present" when any psychiatric care is administered is unconscionable and unreasonable, we find that a remand to determine this matter is not necessary. As this Court noted in Michigan Ass'n of Psychotherapy Clinics v Blue Cross & Blue Shield of Michigan, 101 Mich App 559, 571-573; 301 NW2d 33 (1980), modiñed in part 411 Mich 869; 306 NW2d 101 (1981), such a clause does not invade the physician-patient relationship, "Doctors are still free to use social workers without master's degrees in their clinics. The only difference is the financial source to which they must now look for compensation".
Reversed.