Allen Health System sued fellow Waterloo, Iowa-based provider Covenant Health System in a bid to stop Covenant from opening a competing cardiac catheterization laboratory on the premises of a lab jointly run by the two not-for-profit systems.
The move would violate terms of the systems' joint venture agreement, which expires as of the end of January, said Jim Waterbury, Allen's vice president of institutional advancement. The agreement includes a stipulation that 281-bed Covenant not open a competing lab for one year after the agreement ends, Waterbury said.
In addition, executives of 218-bed Allen believe the certificate of need given the joint venture would not apply to a catheterization lab run solely by Covenant, Waterbury said.
Covenant officials, meanwhile, don't believe the agreement is enforceable or in the best interest of the community, said Covenant's attorney, Grant Killoran of Michael Best & Friedrich, Milwaukee. Allen essentially is arguing that the community is better off with just one cardiac cath lab, said Killoran, who hadn't seen a court-stamped version of the suit.