Healthcare Business News

'Big guy-little guy fight'

Surgery centers sue systems, insurer, trade group

By Andis Robeznieks
Posted: November 24, 2012 - 12:01 am ET

Four ambulatory surgery centers are allied in an antitrust lawsuit against two major healthcare systems, plus a state division of a major health plan and the state ASC trade association.

The centers are claiming that HCA-HealthOne and Centura Health abused their market power and drew Kaiser Foundation Health Plan of Colorado and the Colorado Ambulatory Surgery Center Association into a conspiracy to drive the four of them out of business.

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The case encapsulates the often bitter struggle for the most lucrative patients amid a changing payment landscape and increasingly consolidated markets.

“It seems, on the face of it, that it's a big guy-little guy fight,” said Philip Lebowitz, a healthcare lawyer and partner with Duane Morris in Philadelphia. “But I think what's going on is the fighting over dollars is getting more intense in the healthcare world.” Lebowitz said the push for efficiency and quality has led to new innovation and structures—such as ambulatory surgery centers—that may be in conflict with traditional hospital-centric healthcare models, creating “the tension between the old methodology and news ways of delivering service.”

The complaint was filed Nov. 15 in U.S. District Court in Denver and seeks triple an unspecified amount in damages suffered by the plaintiffs, as well as court costs, decrees that the defendants violated federal antitrust law and a permanent order blocking the defendants for entering into, honoring or enforcing “any agreements to limit competition in the market for surgical services not requiring hospitalization.”

The centers that filed the case are Kissing Camels Surgery Center, Colorado Springs; Cherry Creek Surgery Center and Hampden Surgery Center, both in Denver; and Arapahoe Surgery Center, Englewood. Their lawyers did not return requests for comment.

The lawsuit argues that “HealthOne has made clear that it is antagonistic to the competition it is facing from the plaintiff facilities in a number of different ways,” and made similar charges against Centura.

“The allegations made by the plaintiffs are egregious, misleading and untrue,” Linda Kanamine, spokeswoman for HCA-HealthOne, said in an e-mailed statement. “We will vigorously defend against the lawsuit.”

The complaint also contends that Centura “exerts a great deal of control over” the surgery center trade group, known as CASCA.

The surgery centers allege the trade group hosted an Aug. 30 meeting at which Centura representatives requested that insurers stop doing business with them. “The clear intent behind this action is to drive plaintiffs out of business,” according to the complaint.

When asked for comment, CASCA Executive Director Rob Schwartz replied, “We didn't hold any secret meetings.” He later e-mailed a two-page letter that doesn't mention the lawsuit or the surgery centers that filed it, but it goes on at length about the illegality of waiving health insurance copayments and deductibles—particularly for out-of-network physicians.

As part of the conspiracy, the surgery centers alleged, the health systems and the trade group threatened them with legal action and attempted to get the state to sanction them for illegally waiving copayments and deductibles, which the plaintiffs said they “do not generally” do.

The suit alleges that, as a result of the Aug. 30 meeting, Kaiser “no longer intended to finalize its previously negotiated agreement with Kissing Camels.” A spokeswoman for Kaiser Permanente Colorado declined to comment, citing a policy of not discussing potential litigation.

Centura spokesman Andrew Wineke said in an e-mail that the system is “confident Centura Health has not violated any federal or state laws and that our hospitals and other facilities are operating in the best interests of the communities we serve.”

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