In a closely watched private antitrust case, Saint Francis Hospital and Medical Center sued its rival, the Hartford Healthcare Corporation and the litigation has survived a motion to dismiss.
United States District Judge Sarala V. Nagala allowed Saint Francis to proceed with three of four antitrust claims: (1) acquiring physician practices, (2) controlling physician referrals, and (3) negotiating an exclusive agreement for the Mako robot, a tool used by orthopedic surgeons to perform knee and hip replacements. St. Francis additionally alleged that HHC and its provider network, Integrated Care Partners recruit practitioners to participate in the network by “offering attractive terms to the physicians made possible by HHC’s dominant market power” and ensuring that “independent physicians in its network refer to other ICP-network or HHC physicians.” This last claim failed to state an antitrust claim.
This ruling illustrates that health systems may be vulnerable to private antitrust suits brought by competitors, and such actions can make it past a motion to dismiss. Additionally, firms with a dominant market share may face scrutiny or potential suit for allegedly anticompetitive conduct that is otherwise practiced regularly throughout the health care industry. The case is also notable because the conduct alleged to be illegal is common in the industry, The National Law Review reports.
Specifically, St. Francis alleged that HHC engaged in a course of conduct that includes threatening physicians who refer patients to other hospitals, scoring physicians on their level of referrals and tying financial compensation accordingly, requiring physicians to explain every referral outside of HHC, and even retaliating against a physician who referred outside of HHC with termination. Read more.
