A group of ancillary healthcare providers in northwest Missouri has filed an unusual friend-of-the-court brief with a federal judge who will be ruling on a major antitrust case.
The group, the Coalition for Quality Healthcare, asserts that a settlement reached between the Justice Department's antitrust division and Heartland Health System of St. Joseph, Mo., unfairly puts the smaller providers at a disadvantage (Oct. 30, 1995, p. 38).
They accuse Heartland, the only hospital in St. Joseph, of trying to leverage its monopoly by steering discharged patients to nursing homes, pharmacies and home health agencies that are owned and operated by the hospital holding company.
The settlement includes a passage outlining what protocols Heartland Hospital must follow when discharging patients to ancillary providers. The document, known in legal parlance as an amicus curiae brief, asks U.S. District Judge Howard Sachs to strike that language from the settlement.
"We don't believe the referral policy does anything to discourage anti-competitive behavior. We think it would encourage it," said Dianne M. Hansen, lawyer for the ancillary providers coalition. "We believe that was an add-on, and not relevant to issues of the antitrust violation."
Indeed, the focus of the original case was not patient referrals but managed-care competition. Heartland Hospital, St. Joseph Physicians and their jointly owned managed-care organization, Health Choice of Northwest Missouri, were accused of blocking outsiders who wanted to offer managed-care products in the St. Joseph area. The settlement, regarded as a national precedent, enjoins them from doing that (Sept. 18, 1995, p. 2).
The brief also critiques weaknesses in the enforcement provisions of the consent decree and points out that as long as Heartland is allowed to employ the majority of physicians in the area, it will enjoy enormous competitive advantages.
The document contains nine letters, some handwritten, and support materials that purport to show the unfairness of the consent decree.
"Being a neighbor to an octopus, when the octopus is trying to eat you every day, is no fun," wrote Lowell Fox, administrator of Citadel Health Care, a 100-bed nursing home. "We know that Heartland has spent huge sums of money defending its right to acquire and operate all of the healthcare industry in a large area of northwest Missouri.*.*.*.*When the competition is gone, so will be all ability to make independent healthcare choices.
"Please do not turn your backs on the providers that took care of this community before Heartland became a megalopoly," Fox wrote to Gail Kursh, a lawyer in the Justice Department's antitrust division. "Heartland's vertical integration," he said, allows it "to squeeze its smaller counterparts like a huge python kills its prey."
Kursh, reached in Washington during the government shutdown, said: "I'm here but only for doing essential work. I don't think it would be appropriate to comment." She referred calls to the department spokeswoman, who did not return phone messages.
For now, the Justice Department is not releasing the 120 letters it received in the 60-day comment period, although it eventually must publish them in the Federal Register. It is also not releasing any "determinative" documents it used to formulate the referral policy. The department asserts "there are no such documents or materials."
Kristin Helsel, president of the coalition, said that is "very hard to believe. Personally, I gave a lot of documentation to the Justice Department. I released to them referral trends, documented cases, problems in referral policy. So it seems a little strange."
Helsel, who works for a home health provider, said the coalition wants to present testimony and witnesses at a hearing. It is up to the court whether testimony will be heard or not.
"Procedurally, it's somewhat unusual to have an amicus brief filed at this point, but it's not unheard of," said Chicago healthcare attorney Richard D. Raskin. "Often, the filing of the complaint and the settlement is effectively the end of the case and there are no further hearings."
That, apparently, is the Justice Department's view. Helsel said the department opposes the brief. "They don't want us to mess up their little baby. They've worked long and hard, they've got their precedent-setting policy, and they're not willing to go any further," she said. "It's very disappointing."
The last notable time a federal judge refused to accept an antitrust settlement as written, the Microsoft case, the Justice Department got the decision reversed on appeal. In that case, too, a group of anonymous competitors filed an amicus brief with the court.
Whatever the resolution of the federal case, the Missouri attorney general is pursuing a separate investigation of antitrust and merchandising practices issues.