More than a dozen Florida doctors and provider groups will seek nearly $350 million from integrated system Health First for allegedly violating antitrust law in a trial scheduled to begin next month.
On Thursday, a federal judge refused to dismiss most of the allegations against Health First, clearing the way for the trial to begin Aug. 15 in Orlando, said Joe Whatley, an attorney for the plaintiffs.
Multispecialty physician group Omni Healthcare and several other physicians and provider groups allege that Health First maintains a monopoly by “intimidating physicians or otherwise obstructing their ability to practice medicine in southern Brevard County if they do not 'play ball' with Health First and refer their patients exclusively to Health First's hospitals and physician specialists.”
They allege that Health First's 2013 acquisition of physician group Melbourne Internal Medicine Associates lessened competition in the area and increased the system's monopoly in violation of antitrust law. The physicians and groups want the acquisition unwound and are seeking triple damages—a figure that could rise to as much as $346 million, Whatley said.
Matthew Gerrell, Health First vice president of marketing and communications, wrote in an email Friday that the evidence will show that the plaintiffs' allegations are meritless and that Health First's activities are important to improving health in its community. He wrote that Health First has done nothing wrong and that a settlement, at this point, is unlikely.
“Sadly, these lawsuits have cost Health First millions of dollars to defend over the many years they have been active,” Gerrell wrote. “It means fewer resources are available to provide enhanced care.”
He wrote that Health First is working to create an integrated delivery network model to keep patients healthy.
“There are those in the health services industry that do not believe this is the right model, and feel threatened, as they have richly profited from the historic 'fee for service' model of health care for decades,” he wrote. “Their reaction is to file lawsuits, and try to 'cash in,' while their business models erode due to the evolving economics of healthcare.”
Health First, based in Rockledge, owns and operates health plans, hospitals, physician groups, urgent-care centers and a network of fitness and wellness services. It had $1.26 billion in operating revenue in 2015, according to Modern Healthcare's financial database.
Health First also faces several other lawsuits making similar allegations, including one filed by public hospital Parrish Medical Center last year in state court. In that case, Parrish, a 210-bed hospital in Titusville, Fla., operated by the North Brevard County Hospital District, alleges that Health First requires its doctors to admit and refer almost exclusively to its own facilities and that Health First is attempting to monopolize markets for medical and radiation oncology services.
Gerrell called the complaints behind that and other lawsuits “unfounded.”
But Whatley said it's a “serious issue” when an integrated system is also a monopoly.
“When it is a monopoly and it starts excluding doctors from its networks, then there are real problems,” Whatley said.
He said the plaintiffs are always open to settlement discussions, but he said any such discussions are confidential.
Matthew Cantor, a partner at Constantine Cannon who specializes in antitrust, said antitrust cases often don't go to trial. They're often either dismissed before a trial starts or settled because “generally, there's a lot of risk,” said Cantor, who is not involved in the Health First case.
If the case does go to trial, it may be tough for the private plaintiffs to get the judge to order Health First to unwind its 2013 acquisition, he said.
“Even if you win, often the judge will say, 'It's just not going to be possible for me, at this point, to unscramble the eggs,'” Cantor said.