Health First, Fla. foundation reach settlement ending antitrust lawsuit

After seven years of litigation, integrated delivery network Health First and a local charitable foundation have reached a settlement to end an antitrust lawsuit that was started by the central Florida foundation's corporate forerunner, Wuesthoff Health System.

A Health First spokeswoman declined to elaborate on the terms of the settlement or the exact nature of the dispute, but a joint release from the two organizations said Health First is offering two seats on its board to members of the foundation, the Space Coast Health Foundation, as part of the deal.

"The ending of this long-standing dispute between Health First and the Space Coast Health Foundation should signal to Brevard County residents our commitment to the importance of focusing our combined efforts on the community's health," Health First President and CEO Steve Johnson said in a written statement.

Wuesthoff Health System, formerly a three-hospital system based in Rockledge, Fla., sued Health First, alleging antitrust violations in 2005, according to a spokeswoman. Health First is a three-hospital system based in Rockledge that also operates a multispecialty medical group and offers commercial and Medicare health plans. Both systems were not-for-profits at the time.

Wuesthoff was sold to for-profit Health Management Associates in Naples, Fla., for $153 million in 2010. After that, a conversion foundation eventually known as Space Coast Health Foundation was established to manage the charitable assets that had been held by the formerly not-for-profit health system, among other duties, according to its public IRS tax filings. The foundation had $72 million in assets and $22 million in liabilities (PDF) as of Sept. 30, 2011.

However, the antitrust litigation against Health First continued after the sale. A system spokeswoman declined to describe the exact allegations or the court where it was filed. Wuesthoff and Health First had two prior antitrust cases filed in Florida's U.S. District Court in Orlando, but they were reported as settled in 1999 and 2007.

A news release from Health First and the foundation declined to state any of the terms of the settlement, except to note that the organizations plan to create "a new health program for Brevard County" that will benefit underinsured residents by enhancing access to care. "This initiative will be overseen by representatives from both Health First and SCHF and will enhance the resources of existing health agencies that support and augment care for Brevard's underinsured," the release said.

As part of the agreement, Fran Pickett, chairwoman of the foundation board, will join Health First's board, as will foundation board member James Dwight in January.