RENO, Nev. (CN) – Up to 10 cardiologists can join competing practices without being penalized for breaching employment contracts, after Nevada sued Renown Health, claiming it had 97 percent of the cardiology market in the Reno-Sparks area.
Renown Health acquired Sierra Nevada Cardiology Associates in late 2010 and Reno Heart Physicians in March 2011, making it the employer of 97 percent of the physicians who provide cardiology services in the Reno-Sparks area, according to the Nevada attorney general’s federal complaint.
After the acquisition, Renown required all its physicians to sign noncompete agreements barring them from practicing cardiology in the area for 2 years after leaving Renown.
“As a result, Renown Health has eliminated head-to-head competition in an already highly concentrated market, which increases the likelihood of higher prices for cardiology services,” Attorney General Catherine Cortez Masto said.
Cortez Masto said in a statement that Renown Health violated state and federal antitrust laws, and that the consolidation “increased the bargaining power of Renown Health.”
In its own statement, Renown said that it “employed physicians in the groups as a way to help keep them in our community,” and that “the goal of the arrangement was (and is) to enhance quality, improve services and retain physicians in our community.”
The public has 30 days to submit comments about the settlement to the Federal Trade Commission.
Renown’s cardiologists must remain with Renown until the consent order is finalized. Then they have another 30 days to leave without penalty.
At least six doctors must leave during the 30-day period to satisfy the conditions of the settlement, the attorney general said. If less than six decide to leave, the exemption to the noncompete clauses will be extended indefinitely.
Under the agreement, Renown must notify the attorney general of any plans for acquisitions that affect cardiology services in Nevada. It also must implement an antitrust compliance program, and pay $550,000 for investigative fees and other costs, the attorney general said.