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Health Companies Face|Antitrust Complaint

DENVER (CN) - Four ambulatory surgery centers have sued HealthOne, Centura, Kaiser and an association that is supposed to act for the plaintiffs, in a federal antitrust complaint.

Kissing Camels Surgery Center LLC, Cherry Creek Surgery Center LLC, Arapahoe Surgery Center LLC and Hampden Surgery Center LLC sued HCA Inc., HCA-HealthOne LLC, Centura Health Corp., Colorado Ambulatory Surgery Center Association Inc., and Kaiser Foundation Health Plan of Colorado, and their various subsidiaries and divisions, in the U.S. District Court for the District of Colorado.

Plaintiffs allege federal and state contract, combination, or conspiracy in restraint of trade, and federal and state conspiracy to monopolize and attempted conspiracy to monopolize. They request to permanently enjoin defendants from entering into, or from honoring or enforcing, any agreements to limit competition in the market for surgical services not requiring hospitalization; treble damages; and costs, expert fees and attorneys' fees. Plaintiffs are represented by Whatley Kallas LLC: Joe Whatley Jr. of Aspen, Colo., Edith Kallas of New York, W. Tucker Brown of Birmingham, Ala., and Deborah Winegard of Atlanta.

The plaintiffs offer patients not requiring admission to a hospital for surgery a low cost alternative, according to the complaint.

But the defendant health systems have worked with insurance companies to keep the plaintiffs out of the market by excluding them from insured networks, encouraged doctors whom they employ not to refer patients to the plaintiffs, and discouraged health insurance companies from entering into contracts with plaintiffs and encouraged them to pay lower rates to doctors who do business with plaintiffs, plus other tactics in restraint of trade, the complaint claims.

The complaint states: "Defendants include the two most dominant private hospital systems in the State of Colorado. The defendant hospitals have significant market power in the Denver and Colorado Springs geographic areas included in this complaint. As those defendants realized that they could not compete fairly in the marketplace with plaintiffs, those defendants have abused their market power in an effort to put the plaintiffs out of business. Those defendants have conspired with each other and they have gained control over the defendant association that is supposed to represent the interests of the plaintiffs and brought that association into the conspiracy. Finally, they have used their market power and brought defendant Kaiser into the conspiracy and convinced Kaiser not to sign a contract that it had negotiated with one of the Plaintiffs. The defendant hospitals have also attempted to use their market power to influence other health insurance companies that do business in Colorado. The result is that plaintiffs and the patients they serve are being damaged."

The complaint also claims: "While the defendant hospital systems have formed surgery centers, those hospital systems have an inherent conflict of interest to direct as many patients as possible to the hospitals where the defendants are paid more for the services in order for the hospitals to cover their significant costs. In fact, through their relationships with doctors and otherwise, hospitals have the ability to direct many patients to the site where they will receive their procedures."


The complaint shows: "As an example of lower prices charged by and paid to ambulatory surgery centers ('ASCs'), Medicare pays $1,332.19 for carpal tunnel surgery when performed in a hospital in Colorado, but pays only $762.31 when that same surgery is performed in a free-standing ASC in Colorado. As a further example, Medicare pays $4,246.76 for reconstruction of a wrist joint when that surgery is performed in a hospital, but pays only $2,457.95 when that same surgery is performed in a free-standing ASC."

The complaint states: "In January of 2012, counsel for a number of surgery centers operated by HealthOne threatened to file suit against SurgCenter at Dry Creek (Arapahoe) and SurgCenter Development, Inc. for what it claimed were unfair business practices related to copays and deductibles, according to the complaint. The letter claimed that the HealthOne entities would file suit against the plaintiffs if they did not change their billing and collection services to be less competitive with HealthOne, and to increase costs collected from plaintiff's patients, according to the complaint.

By September 2012, Kaiser Foundation Health Plan of Colorado "had joined the conspiracy and then it refused to sign a network agreement that it had negotiated with Plaintiff Kissing Camels and refused to authorize treatment of its members at Kissing Camels as a part of the conspiracy," according to the complaint.

The complaint claims: "While the Defendants HealthOne and Centura damaged Plaintiffs through their abuse of their market power, when they were not successful in using their market power to force plaintiffs out of business, they engaged in additional concerted activity to achieve the same end.

"At the behest of Centura and/or HealthOne, the major health plans in Colorado, have taken actions to pressure these facilities out of business. One of the primary methods of putting plaintiffs out of business was to attempt to dry up 'referrals' to the plaintiffs by physicians and other healthcare providers.

"Many of these health insurers sent notices to healthcare providers who performed surgeries or other procedures at the plaintiffs' facilities threatening them with termination from provider networks, or other financial penalties, if they continued to perform those surgeries or procedures at the plaintiffs' facilities. Some of these healthcare providers were ultimately terminated from the health insurance networks.

The complaint further claims: "When their other efforts were not sufficiently successful, defendants resorted to a blatant violation of the Antitrust laws. On or about Aug. 30, 2012, defendants CASCA, HealthOne, and Centura held a meeting with the majority of the major health insurance companies in the Denver and Colorado Springs markets, at which these defendants asked the health insurance companies, such as CIGNA, United, Anthem, Aetna, Humana, and Kaiser, to join them in a concerted boycott of the plaintiffs. "Present at the meeting were representatives of Kaiser, Anthem, United, and Humana among others. At the meeting on or about Aug. 30, 2012, Centura representatives provided misinformation about plaintiffs Surgery Center and requested health insurers not to do business with plaintiffs. The clear intent behind this action is to drive plaintiffs out of business.

"As a result of the meeting and the agreements reached with HealthOne, Centura, and CASCA a number of the health insurers took actions designed to further their agreement to attempt to marginalize or put out of business the plaintiffs.

"For instance, one insurance company terminated from its networks a number of physicians and practices affiliated with the plaintiffs' facilities. These terminations were designed to deter referrals of patients and surgeries to these facilities. That company has threatened many other physicians and practices with termination if they continue to treat patients at the plaintiff facilities and has threatened primary care physicians with termination if they continue to refer patients to surgeons who perform surgery at the plaintiff facilities. In fact, that company went one step further and threatened to terminate primary care physicians who referred patients to specialists who ultimately performed surgeries and procedures at the plaintiffs' facilities."

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