Geisinger Health sued its affiliate AtlantiCare to prevent the New Jersey system from separating from the integrated provider, according to a complaint filed Thursday.
The Danville, Pa.-based health system accused AtlantiCare, its chairman Michael Charlton and CEO Lori Herndon of plotting the separation against the terms of their 2014 agreement to acquire AtlantiCare. In August 2019, Charlton claimed Geisinger breached the terms of the agreement and said they would terminate their association, according to the complaint.
Geisinger alleged that in the acquisition agreement, AtlantiCare could only leave the system if Geisinger were acquired by a religious not-for-profit health system or a for-profit system. Neither scenario has happened.
"The call blindsided Geisinger," the complaint said.
Geisinger accused Charlton and AtlantiCare's board of "plotting to take action against Geisinger's interests" and breaching their fiduciary duty under the agreement. Ultimately, AtlantiCare's board voted to disassociate in September 2019.
"The complaint filed in federal court on Thursday is related to discussions about the future status of the relationship between Geisinger and AtlantiCare," Geisinger said in a statement. "We continue to engage in discussions and are hopeful that we can resolve this matter to the satisfaction of all involved."
In its own statement, AtlantiCare said, "although we deny the assertions in the complaint, we continue to engage in discussions and are hopeful that we can resolve this matter to the satisfaction of all involved in the best interests of our patients and their families, our staff and the broader communities we serve."