Community Health Systems has settled a lawsuit against the former CEO of its Fort Wayne, Ind., subsidiary, Lutheran Health Network, more than a year after it alleged the CEO used confidential information to lure a competitor to the Fort Wayne area.
In a statement, hospital giant CHS and Lutheran said former Lutheran CEO Brian Bauer is barred from disclosing any confidential information and from soliciting employment from Lutheran employees until June 13, 2020. The rest of the settlement is confidential.
CHS and Lutheran sued Bauer in November 2017 for breaching his contract, claiming Bauer engaged in an online smear campaign against the hospital system, shared confidential information to harm the system and ultimately lured competitor IU Health to the area.
Bauer was fired as Lutheran's CEO in June 2017 after a group of disgruntled physicians at the hospital system tried and failed to buy out the profitable Fort Wayne hospitals. He then went to work for IU Health as an independent consultant to help build a new primary-care practice in Fort Wayne.
CHS claimed that Bauer marketed himself to IU Health as a "Fort Wayne insider" and solicited Lutheran employees to work for IU Health. A judge in Tennessee, where CHS is based, in February 2018 ruled that Bauer indeed disclosed confidential information and barred him from creating a competing healthcare network with anyone who received that information. But the court still allowed Bauer to work with IU Health.
IU Health opened its first primary-care office in Fort Wayne in August this year and has said it wants to establish a long-term presence in the area with plans for additional facilities including imaging, lab and urgent-care centers. It also opened a specialty pediatric clinic in Fort Wayne in early 2018.
In an email, Bauer said he is pleased the lawsuit is settled and looks "forward to the future in northeast Indiana." He is still working with IU Health.
Modern Healthcare A.M. Newsletter: Sign up to receive a comprehensive weekday morning newsletter designed for busy healthcare executives who need the latest and most important healthcare news and analysis.