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Health First Monopoly Claims Advance in Fla.

ORLANDO, Fla. (CN) - The largest hospital corporation in Southern Brevard County must face claims that it coerced doctors and drove them out of business, a federal judge ruled.

U.S. District Judge Roy Dalton Jr.'s Jan. 22 ruling advances the third amended complaint against Health First and three of its subsidiaries, including Holmes Regional Medical Center, a hospital in downtown Melbourne, Fla., over their alleged attempt to monopolize the regional health care market.

Led by Omni Healthcare, the physicians suing those entities, plus Health First's founders and former executives, challenge how Health First gained market power over acute-care hospital services, physician services and private insurance plans.

They say Health First coerced doctors into joining its subsidiaries or entering exclusive referral agreements. Doctors who resisted were allegedly driven out.

Health First's monopoly has been on the rise since its 1995 acquisition of all competing hospitals in the region, according to the complaint,

In addition to retaining exclusive trauma and neonatal intensive care services that gave Health First an advantage over new competitors, Health First's own insurance company received lower reimbursement rates at Health First hospitals as compared with other insurers, according to the complaint.

The company's market share allegedly continued to expand as most physicians joined Health First practices, bringing in new patients.

Treatment quality in Southern Brevard County meanwhile hit "shockingly low" levels because of the monopoly, despite increasing prices, causing doctors who did not comply to lose business, the doctors say.

Judge Dalton Jr. last month found that the plaintiffs can advance claims that Health First's exclusionary tactics amount to an antitrust violation.

The doctors' interests in dissolving Health First's exclusive arrangements also coincide with those of the public, according to the Jan. 22 ruling.

Dalton likewise sided with doctors for adequately defining the relevant markets, including their product and geographic dimensions.

Given Health First's alleged coercive tactics and the plaintiffs' exclusion from its networks, Dalton found that the plaintiffs' conspiracy claims were plausible.

The judge also upheld state-law claims for deceptive practices and tortious interference, rejecting Health First's contention that its insurer was exempt from suit under Florida law.

Health First's former executives similarly failed to have the claims against them struck in the 37-page order.

Matthew Gerrell, a spokesman for Health First, denied the doctors' monopoly allegations. "This and other lawsuits by a select few distract Health First from focusing on our mission to improve the health and well-being of those we serve," Gerrell said in a statement last year. "They drive up expenses, which in turn drives up costs, and the only beneficiaries are the lawyers involved."

Health First settled a previous antitrust lawsuit with the Space Coast Health Foundation in November 2012. Details of the settlement were never released.

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