Crystal Run Healthcare, a multispecialty physician group in Middletown, N.Y., filed a lawsuit Aug. 23 accusing Middletown-based Orange Regional Medical Center, its affiliated physician practice and its parent company of poaching physicians to become the dominant healthcare provider in the region, according to the Times-Herald Record.
Here are six things to know:
1. The 500-plus provider group's lawsuit alleges ORMC and its parent company, Middletown-based Greater Hudson Valley Health System, offered kickbacks in the form of "above-market compensation" to recruit physicians from Crystal Run and other area medical practices despite the physicians' noncompete clauses. The lawsuit claims the higher salaries incentivized physicians to steer business toward ORMC, which violates certain federal and state laws, the report states.
2. The suit also cites the case of Dumisa Adams, MD, a Crystal Run Healthcare physician. Crystal Run Healthcare leaders said ORMC enticed Dr. Adams into joining their practice, effectively breaking her noncompete clause with Crystal Run.
3. A Crystal Run Healthcare spokesperson told the Times-Herald Record in a prepared statement the group filed the lawsuit to prevent ORMC's "unethical and illegal interference with Crystal Run's contractual rights" to keep physicians like Dr. Adams.
"In recruiting Dr. Adams, Orange Regional's conduct is part of its broader effort to become the exclusive medical services provider to the population of Orange County and surrounding communities, ultimately eliminating patient choice — a plan which surely is not in the best interest of Orange County and its residents."
4. Crystal Run Healthcare said it believes the noncompete clause in Dr. Adams' contract is reasonable. However, leaders with the physician group said Dr. Adams' notice letter to leave Crystal Run included arguments similar to those of seven other physicians who sued the organization in December 2017. The physicians cited similar concerns with the noncompete clauses, which they claimed were unfavorable to them and reduced them to "indentured servants," the report states.
5. An attorney for ORMC and its parent company told the publication in a prepared statement: "We dispute the allegations in the suit, and we'll vigorously defend against it."
6. Cecelia Prewett, a spokesperson for Crystal Run Healthcare told Becker's Hospital Review in a prepared statement Aug. 24: "Crystal Run Healthcare has been forced to file a lawsuit against Orange Regional Medical Center and its affiliated medical group, GHVHS Medical Group, PC, to stop Orange Regional's unethical and illegal interference with Crystal Run's contractual rights by seeking to hire one of Crystal Run's physician partners, Dr. Dumisa Adams. Dr. Adams is also a defendant in the suit for breaching her agreement not to compete with Crystal Run for one year and within 15 miles of Crystal Run's practice sites.
"Dr. Adams has informed Crystal Run that, contrary to the terms of the agreement she signed, she intends to not wait the agreed upon one year period and immediately move her practice down the street to Orange Regional. In doing so, she will take the patient relationships that she was given by Crystal Run with her to grow her obstetrics and gynecology practice at Orange Regional. We believe that Orange Regional should respect Crystal Run's contractual rights and that Dr. Adams should likewise abide by the agreement she made and in exchange for which Crystal Run provided her significant financial and other benefits.
"Crystal Run remains committed to providing best-in-class care to hundreds of thousands of patients who turn to us for healthcare each year."
To access the full report, click here.
Editor's note: This article was updated Aug. 24 at 10:55 a.m. to include a statement from Crystal Run Healthcare.