Atrium Health's largest physician group sues to practice independently

Updated 5:30 p.m. ET:

Atrium Health's biggest physician group, Mecklenburg Medical Group, sued the North Carolina-based system to get out of its employment restrictions so it can practice independently.

More than 90 doctors at Mecklenburg Medical Group accused Atrium Health, previously Carolinas HealthCare System, of cutting their pay and including overly restrictive noncompete conditions in their new contract. The physician group has been a part of the health system for approximately 25 years, according to the suit.

In addition to allegedly "overly broad" noncompete clauses that would essentially prevent them from doing any medical work in the Mecklenburg County area for 12 months, the contracts allegedly mandate that they refer each patient who needs treatment to an Atrium facility, without consideration of pricing or cost to the patient, the doctors claim. If the doctors didn't sign the new contracts, they would allegedly be fired "for cause," according to the lawsuit filed in Mecklenburg County Superior Court.

Atrium said that it is surprised and disappointed by the lawsuit, but it is "granting their desire to go independent and determining the most appropriate way to address the noncompete provision," the health system said in a statement.

Atrium allegedly uses its dominant market power to demand rates up to 150% higher than its peers charge for the same services, according to the lawsuit.

"Atrium is acting as the exact opposite of the non-profit healthcare provider that it claims to be," the suit reads. "Intervention of the court is required to prevent Atrium's corporate ambitions from causing irreparable harm" to the group's physicians and patients.

Doctors of the Mecklenburg Medical Group argued that they can operate more effectively independently, following claims that Atrium and its "bloated management bureaucracy" would lose an estimated $17.6 million on the group's practice in 2018.

The medical group claims that Atrium cut the number of registered nurses who support physicians and relocated triage nurses to a central facility in Mint Hill, N.C. It also replaced front-facing staff with a centralized call center in Mint Hill, according to the suit.

Atrium is facing similar lawsuits that contend that Atrium's contracts with insurers quell competition and raise healthcare prices.

Atrium has consistently grown its market share over the years through mergers and acquisitions. But recently, UNC Health Care broke off merger talks following backlash from state officials. The news came about a month after it announced plans to merge with not-for-profit health system Navicent Health, based in Macon, Ga.