A Virginia hospital has dropped its high-profile managed-care contracting lawsuit against a national insurance company following the hospital's sale.
Stuart Circle Hospital, a 133-bed facility in Richmond, Va., sued Aetna Life Insurance Co. in 1991 after the insurer excluded the hospital from a preferred provider organization that it operated in Richmond. The hospital said Aetna violated the state's "any willing provider" law, which bars PPOs from excluding providers that meet their participation requirements.
A federal district court threw out the suit, but on appeal, the 4th U.S. Circuit Court of Appeals reinstated the case and ordered a trial to be held. Late last year, the U.S. Supreme Court declined to hear the case, letting the appellate court decision stand and prompting some legal observers to predict a wave of similar provider suits against managed-care plans (Dec. 6, 1993, p. 8).
But the hospital dropped its lawsuit earlier this month after the hospital's owner, Quorum Health Group, sold it to Bon Secours Health System, which operates St. Mary's Hospital in Richmond. St. Mary's Hospital is in Aetna's Richmond PPO network. A trial on the merits of the case hadn't been set.
Quorum acquired Stuart Circle last October from Charter Medical Corp., which owned the hospital at the time the lawsuit was filed.