Ptpn

In 1982, the California Legislature enacted legislation that paved the way for the proliferation of a new kind of health care service plan, the preferred provider organization (PPG). That year, the Legislature amended Insurance Code section 10133 to allow private health insurers to contract with hospitals and providers of medical services for alternative rates of payment for those services, thus permitting insurers to create panels of “preferred providers” for the insurers’ subscribers. That amendment was followed a few years later by legislation that enables providers to form groups or combinations to more efficiently negotiate with insurers to' become preferred providers. In doing so, the Legislature immunized certain conduct from antitrust liability. In this case, we. are asked to determine whether the conduct of one such group of providers (which imposed territorial restrictions on its members) and one insurer (which made the members of that, group the virtually exclusive preferred providers for physical therapy services) comes within the scope of this immunity. We hold that it does.

BACKGROUND

There are two named defendants in this lawsuit. The first is PTPN, Inc.,…