Healthcare Business News

Trinity Health subsidiary sues to block doc practice sale

By Joe Carlson
Posted: November 13, 2012 - 12:30 pm ET

A subsidiary of Trinity Health, Livonia, Mich., has filed a private antitrust lawsuit in Idaho in an attempt to block the impending sale of Idaho's largest physician practice to Trinity's direct competitor in the market, St. Luke's Health System, Boise.

The Federal Trade Commission and the Idaho attorney general's office were already investigating whether the potential acquisition of Saltzer Medical Group would give St. Luke's a monopoly over certain healthcare services, according to records from the attorney general and statements from St. Luke's.

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On Monday, Trinity subsidiary St. Alphonsus Health System and its hospitals asked a federal judge to impose temporary and permanent injunctions (PDF) on the transaction between St. Luke's and Saltzer, arguing that such a deal would give St. Luke's a near monopoly for adult primary-care services in Nampa, Idaho, and deal a crippling blow to St. Alphonsus' safety-net hospital in the city.

The lawsuit includes a copy of a letter from the attorney general's office to St. Luke's warning that closing the deal before the conclusion of ongoing investigations "would appear designed to invite litigation."

"Nevertheless," the St. Alphonsus lawsuit says, "St. Luke's is preparing to defy antitrust authorities and to imminently complete the transaction before the FTC or attorney general act. Plaintiffs are forced to proceed in order to prevent immediate and irreparable injury."

St. Luke's spokesman Ken Dey confirmed that the system has served the state with notice that it intends to acquire Saltzer and that system officials hope to close the deal by the end of the year. But he denied the allegations in the lawsuit and said the system would be answering the litigation soon.

Dey said St. Luke's estimates that it would control just 28% of the market for adult primary-care services in the Nampa market after the deal and that its doctors would be under no obligation to refer patients exclusively to St. Luke's just because they would be working under contract for the system.

Under the deal, St. Luke's would directly employ Saltzer's support staff, but the physicians would work under a professional services agreement. Dey said doctors under the agreement could quit and work for competitors at any time and would not be subject to noncompete agreements, which have been controversial in transactions such as the one recently involving Renown Health in Reno, Nev.

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