Tension between specialty hospitals and general acute care hospitals has come to a head in litigation arising in Kansas City. In a victory for the plaintiff Heartland Spine & Specialty Hospital, the U.S. District Court for the District of Kansas rejected defendant's motion for summary judgment on plaintiff's Sherman Act claims. The lawsuit, originally filed against 18 defendants in April 2005, alleged that the managed care organizations ("MCOs") and competing hospitals conspired to prevent the specialty spine and upper extremity specialty hospital from joining any managed care network.

The court found sufficient evidence to allow the lawsuit to proceed, citing a litany of meetings and e-mails in its 125-page memorandum which formed the basis to support claims that representatives of the Kansas City-area hospitals and MCOs met to address strategies for Heartland's entrance into the market. The court concluded that the facts, when taken in a light most favorable to Heartland, support a reasonable inference that the managed care defendants had to have realized that if Heartland was granted in-network provider status by one MCO, then that MCO would have a more expansive network than the other MCOs, which would be more attractive to employers and insureds. The court's memorandum exudes frustration with the parties and characterizes the litigation "as contentious, at best."