A Tennessee judge ruled Friday that a lawsuit brought by investor-owned hospital system Community Health Systems and its subsidiary Lutheran Health Network against Lutheran's former CEO of its Indiana hospitals could proceed.
In November, Franklin, Tenn.-based CHS and Fort Wayne, Ind.-based Lutheran Health Network sued former CEO Brian Bauer for breaching his contract by disparaging the hospital system, sharing confidential information to harm the system, and ultimately luring Lutheran competitor IU Health to the Fort Wayne area.
Bauer had filed a motion to dismiss the lawsuit, but a judge for the Circuit Court of Williamson County, Tenn., ruled the court has jurisdiction to hear the claims and declined to dismiss the case.
"This is an important milestone decision in the litigation against Brian Bauer because it means the case will move forward and there can be a full airing of the facts and the evidence that Bauer and others engaged in a scheme to harm Lutheran Health Network," a CHS spokeswoman said in a statement.
A representative for Bauer did not immediately respond to a request for comment.
Bauer was fired as Lutheran Health Network's CEO in June 2017 in the wake of a failed physician bid to find a buyer for the Fort Wayne hospitals. The group of disgruntled physicians claimed that CHS neglected Lutheran's capital and staffing needs for years and had lost the trust of physicians.
They offered to buy the Fort Wayne hospitals for $2.4 billion, but CHS rejected the offer, saying it was inadequate.
In October, Lutheran competitor IU Health said Bauer and former Lutheran Hospital Chief Medical Officer Dr. Geoffrey Randolph signed on to help build a new primary-care practice in Fort Wayne. Bauer is an independent contractor working with IU Health to build out the primary-care practice.