Anesthesia Associates of Ann Arbor PLLC, the largest anesthesiology and pain-management medical group in Michigan, has sued Trinity Health Michigan in Washtenaw County Circuit Court over an allegation the 13-hospital health system improperly tried to hire away some of its providers.
The lawsuit contends Trinity has "chosen to ignore (Anesthesia Associates') valid non-competes and its own non-solicitation obligations and has recently attempted to recruit our certified registered nurse anesthetists," according to a statement to Crain's from Anesthesia Associates, also known as A4.
"Trinity's conduct is contentious and certainly does not represent the values of the health care system which include justice, stewardship and integrity," A4 CEO Gregory Bock said in a statement. "Now, the issue must be handled by the courts as this is the only way that A4 can protect its physicians and CRNAs and continue to serve patients and remain focused on exceptional anesthetic care."
Trinity Health Michigan had no immediate comment on lawsuit. CEO Rob Casalou addressed some of the issues Trinity has with A4 in an Aug. 9 letter to Bock and Traci Coffman, M.D., president of A4 Management Co. in Ann Arbor.
"We have heard that large numbers of A4 physicians at multiple locations are upset that we withdrew offers because they had hoped to be employed by Trinity," Casalou wrote. "Leadership at our hospitals have heard that many of the A4 physicians are very unhappy with A4, and that if A4 remains in charge, they will look elsewhere for employment."
Casalou said if anesthesiologists leave A4, it would interfere with surgery and anesthesia services at Trinity hospitals and "put A4 in breach of its staffing requirements, particularly in light of the shortage of anesthesiologists nationally."
Anesthesia Associates, which employs about 120 anesthesiologists and 50 CRNAs, provides services to six Trinity Health hospitals in Michigan, four Beaumont Health hospitals in Wayne, Dearborn, Trenton and Taylor, and another small hospital in Ypsilanti. It also has contracts with six ambulatory surgery centers and four chronic-pain-management clinics.
On July 23, Trinity Health sued Anesthesia Associates of Ann Arbor after the group terminated its contract with Blue Cross Blue Shield of Michigan, Priority Health other payers over contract disputes.
A4 said it has signed new contracts with Blue Cross, Priority, Health Alliance Plan, Aetna and UnitedHealthcare. However, A4 has remained upset with the reimbursement deals.
"The insurance rates for anesthesia services from these large insurance companies are some of the lowest in the country and have not increased in over six years," Bock said.
Despite reaching an agreement, Priority Health and Blue Cross refused to negotiate new agreements at reasonable rates, Bock said. He said they instead to retain a larger share of rising patient premiums for increasing profits and executive compensation.
A4 has suggested it could terminate its participation agreements with Blue Cross and Priority, Trinity said in a lawsuit it filed in federal district court in Detroit Wednesday.
Blue Cross and Priority were not immediately available for comment.
Sources told Crain's that A4 asked Blue Cross and Priority for a substantial increase in reimbursement, which the payers refused, leading to the temporary contract termination. After A4 signed the new payer contracts, Trinity said it would drop its lawsuit.
Casalou said Trinity was surprised to learn that A4 could terminate its contracts again with payers in an effort to garner higher rates.
"This would be a serious, material breach of our agreements," he wrote, adding: "We didn't end our recent dispute with A4, incur all the expense we did, and go through all the disruption and angst amount our patients, staff and communities only to face the same problem."
In his letter, Casalou raised new issues to A4.
"The CRNAs at St. Joseph Mercy Oakland are even more upset," Casalou wrote. "We have received communications predicting a mass exodus if the CRNAs cannot work for Trinity instead of A4. We understand that one of the CRNAs who criticized A4 was immediately fired last week in response."
Trinity gave A4 until Aug. 20 to agree to its terms or it would not renew A4s contract at its Grand Rapids hospital, which expires Aug. 30, and also not renew contracts at its five other hospitals that expire in June 2020.
Bock said in response that Trinity Health Michigan has overstepped its boundaries and "demanded A4 release its physicians and CRNAs from any non-competes unless A4 agrees to renegotiate a new agreement" that would essentially free its doctors and CRNAs to join Trinity or other hospitals.
"We are disappointed in how Trinity is handling themselves during these discussions given the work our physicians and CRNA's provide and given the relationship we have had with Trinity," Bock said. "We want our physicians and CRNAs to continue to provide the same high-quality anesthesia services that A4 has always provided to Trinity, but independent from Trinity. Unfortunately, Trinity is forcing a forced hand by stealing doctors away from their practice and dismembering our organization that started 50 years ago. We have no choice but to sue the health care system."
In a response to A4's lawsuit, Trinity Health Michigan asked the U.S. District Court in Detroit for a declaratory judgment, permanent injunction and damages to prevent A4 from using noncompete clauses in its anesthesiology contracts "to interfere with the ability of their more than 100 anesthesiologists to continue to treat patients at the hospitals they serve."
Trinity contends that the noncompete clauses "stymie the choices of its physicians, who desire to work for plaintiffs directly, and of (TrinityHealth Michgian) patients, who will face the risk of disruption to their care at (Trinity) hospitals."
In its 58-page lawsuit, Trinity acknowledges that it offered employment to A4 anesthesiologists, but said it did so only after A4 breached its contract with Trinity by terminating payer contracts.
After A4 signed the payer contracts, Trinity withdrew the offers, which it said upset A4 doctors who wanted to leave A4.
"Anesthesia Associates sues Trinity Health for trying to hire away anesthesia providers" originally appeared in Crain's Detroit Business.
