Cleveland Clinic Florida and for-profit hospital giant HCA have agreed to pay $120,000 each and cancel a 1998 pact that allegedly divided up markets and stifled competition in Florida as a means of getting around certificate-of-need requirements, state officials say.
The two healthcare provider organizations settled the antitrust case with Florida Attorney General Charles Crist Jr. last week.
Crist had sued HCA and Cleveland Clinic Florida on April 18, charging that they had colluded to drive out competition in various healthcare facilities markets in eight Florida counties, as well as in the acute care market for Collier County and the market for open-heart surgery in Broward County.
He based the charges on an administrative settlement that Cleveland Clinic and HCA predecessor Columbia/HCA Healthcare Corp. reached with state officials in March 1998, in which the two companies agreed either to withdraw CON applications, not to oppose CON bids, or to avoid establishing physician offices or other healthcare facilities in territory served by the other.
Cleveland Clinic also agreed in the 1998 settlement to fund and support healthcare services for children and indigent populations in Collier County.
As a result of the new settlement, HCA will pay $50,000 to Broward Children's Center and $50,000 to SOS Children's Village of Florida, both of which are facilities for special-needs children. Cleveland Clinic will pay $100,000 to Isabel Collier Read Immokalee Health Park, an urgent care and diagnostic center in Immokalee, Fla., owned by NCH Healthcare System, Naples, Fla.
NCH Healthcare System officials were not immediately available for comment Thursday afternoon.
Cleveland Clinic and HCA also will pay $20,000 each to reimburse the state for its investigation, according to documents entered in U.S. district court in Fort Myers, Fla.
In a written statement sent to Modern Physician, Cleveland Clinic says: "The 1998 settlement was a direct result of the defendants' attempt to resolve the then pending administrative litigation related to Florida's Certificate of Need program and allowed Cleveland Clinic Florida to compete in a previously underserved healthcare market located in Southwest Florida. Today, Cleveland Clinic Florida Naples offers the residents of Southwest Florida a competitive alternative to health care services in Collier County."
HCA spokesperson Jeff Prescott did not respond to requests for comment. He was quoted in the April 29 edition of the News-Press in Fort Myers as saying that the type of agreement HCA and Cleveland Clinic reached in 1998 is a "very common and appropriate method to quickly and amicably resolve a certificate-of-need dispute."
Trish Connors, representing the state attorney general, says the practice was indeed common five years ago.
"I think it's less so now," Connors says in explaining the legal action. "We were trying to make the point that this should not be common practice."