Antitrust Law Daily Wrap Up, ANTITRUST—C.D. Ill.: Hospital ordered to disclose physician information in suit against rival, (Apr 23, 2014)

By Jeffrey May, J.D.

In an antitrust action involving two hospitals serving central Illinois, plaintiff Methodist Health Services Corporation was ordered to produce documents related to Methodist’s physician staffing, compensation, and recruitment to defendant OSF Healthcare System. A magistrate judge in the federal district court in Peoria granted in part OSF’s motion to compel; however, OSF’s motion to compel non-party UnityPoint—the health system that includes Methodist—to disclose certain “contracting documents” was denied (Methodist Health Services Corp. v. OSF Healthcare System, April 22, 2014, Hawley, J.).

In 2013, Methodist filed suit, alleging that OSF, which operates St. Francis Medical Center, leveraged its size and status to force commercial health insurers to enter into exclusionary contracts to preclude those insurers from contracting with other hospitals and healthcare facilities. St. Francis, located in Peoria, is the fourth largest medical center in the state of Illinois. Methodist contended that the predatory and exclusionary conduct reduced competition and raised prices in the Peoria area with respect to: (1) the sale of general acute-care inpatient hospital services to commercial health insurers; and (2) the sale of outpatient surgical services to commercial health insurers.

Methodist resisted production of the physician information on the ground that it unnecessarily invaded the privacy of physicians within the Peoria community. The physician information was relevant and was not unduly burdensome, the court ruled. OSF had argued that it was entitled to the information on the physicians to defend itself against Methodists’ allegations that OSF’s conduct dissuaded physicians from affiliating with Methodist. The physicians’ privacy interests could be preserved by the redaction of their names in any produced documents and by a protective order. Moreover, the request was not unduly burdensome in light of the claims and defenses the parties were litigating, the court explained.

Methodist also had objected to OSF’s request for information on “Methodist’s provision of inpatient hospital services or outpatient surgical services” and to certain board meeting information. In light of Methodist’s assertions that these requests were overly broad, vague, and unduly burdensome, OSF was instructed to issue properly-tailored discovery requests.

OSF was not entitled to “contracting documents” from non-party UnityPoint. OSF contended that it was entitled to these documents, which included agreements between any UnityPoint hospital and a third party payor containing an exclusivity clause or any other provision making reference to any other hospital and/or another hospital’s services, to show that UnityPoint’s own hospitals regularly engaged in the very contracting practices that Methodist challenged. However, the burden that responding to these requests would impose upon UnityPoint outweighed the attenuated relevance of the responsive documents, the court ruled.

The case is No. 13-1054.

Attorneys: Andrew R. Woltman (McGuire Woods LLP) for Methodist Health Services Corp. Alexander George Bomstein (Pepper Hamilton LLP) for OSF Healthcare System.

Companies: Methodist Health Services Corp; OSF Healthcare System

Cases: Antitrust IllinoisNews