1. Heartland Spine & Specialty Hospital. Heartland Spine & Specialty Hospital in Overland Park, Kan., brought forth antitrust suits against several hospitals and payors in the Kansas City area after the hospital was excluded from the major managed care contracts in the area. In Apr. 2005, Heartland proceeded to bring suit against HCA Midwest, St. Luke's Health System, Carondelet Health System, Shawnee Mission Medical Center and North Kansas City Hospital as well as Aetna, Blue Cross and Blue Shield of Kansas, Cigna, Coventry Health Care of Kansas, Humana and UnitedHealth. Heartland brought action for approximately $120 million in damages plus treble damages. The suit survived a motion for summary judgment. The hospital was able to show that the managed care plans initially indicated an interest to contract with the hospital and then there was some intervening factor that caused them not to. The hospital was also able to show that the other hospitals in town discussed exclusion of the hospital at annual hospital meetings in the area. In this situation, the hospital ultimately settled with the hospitals and managed care plans. The terms of the settlement were not disclosed.
2. Houston Town and Country Hospital. This case is particularly noteworthy because it was the Texas State Attorney General that brought action against Memorial Herman Health Care System, the health system that purchased the Houston, Texas-based Town and Country following its closure in 2007 after failing to secure in-network contracts with the major managed care providers in the area. The Attorney General alleged that Memorial Herman used exclusionary tactics and anti competitive conduct to dissuade payors from negotiating managed care contracts with its new competitor. It was one of the few cases that we are aware of where a State Attorney General attacked the conduct of a major hospital system based on anti competitive conduct against a physician-owned hospital. The acute-care hospital and the State Attorney General ultimately settled for $700,000. Memorial Hernan agreed to a five year injunction on some contract negotiating practices. The hospital admitted no wrongdoing in the settlement. The hospital also stated that the steps it agreed to take were things it would do anyways and that it simply settled to avoid the costs of an anti trust defense and litigation.
3. Little Rock Cardiology. In this case, physicians from Little Rock (Ark.) Cardiology Clinic who were involved with the Arkansas Heart Hospital alleged that Baptist Health took anti-competitive actions to attempt to put the physician-owned hospital out of business. The cardiologists participated in the Arkansas FirstSource Network, a network of providers used by all Blue Cross and affiliate health plans. After the Heart Hospital opened, the physicians claimed they were excluded from the network due to their involvement with the physician-owned facility. The physicians argued that the reason they were excluded from the network was to protect Baptist Health from competition. However, the physicians did not name Blue Cross as a defendant in its compliant. The physicians also claimed the beginning in 2003, Baptist Health began credentialing practices that excluded physicians with financial interests in competing facilities from being on staff. The physicians argued that Baptist participated in unlawful contract combination and concerted action to restrain competiton. Here, the court dismissed the claims of the plaintiff on the grounds that the physicians failed to prove the acute-care hospital engaged in anti-competitive behavior.
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These three cases give some indication of the types of suits that are being brought by physician-owned hospitals to prevent anti competitive conduct by acute-care hospitals. This is an evolving area with many cases in the surgery center area that also shed light on these types of claims.