Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Hospital system allegedly used sham litigation to foreclose competition for cardiac catherization services, (Dec 22, 2015)

By Linda O’Brien, J.D., LL.M.

A non-profit health care system operator has attempted to maintain its monopoly over the provision of cardiac catheterization services in southeastern Massachusetts by filing sham litigation to block or delay to operation of a competing cardiac catheterization center, according to a complaint filed in the federal district court in Boston (Steward Health Care System LLC v. Southcoast Health System, Inc., December 21, 2015).

Steward Health Care System LLC is a community-based accountable care organization (ACO) that operates nine hospitals in Massachusetts. Southcoast Health System, Inc. is incorporated as a public charity and operates three community hospitals in southeastern Massachusetts.

Pursuant to public health data, the residents of southeastern Massachusetts suffer disproportionately high rates of cardiac illnesses and mortality from such illness, according to the complaint. Thus, the need for high quality, affordable, comprehensive cardiac care services is great in this region. However, there are only two hospitals in the region—Charlton Memorial Hospital in Fall River and St. Luke’s Hospital in New Bedford—that provide cardiac catheterization services, an important component of comprehensive cardiac care. Southcoast owns and operates both facilities.

To meet the need for growing cardiac care needs, Steward requested approval from the Massachusetts Department of Public Health (DPH) to offer diagnostic cardiac catheterization services at Saint Anne’s Hospital in Fall River, a member hospital of Steward’s ACO. In September 2015, the DPH approved Steward’s plans for its proposed cardiac catheterization center at Saint Anne’s Hospital after the hospital satisfied all of the regulatory requirements, the complaint alleges.

The complaint states that, in an effort to maintain its monopoly over cardiac catheterization services in southeastern Massachusetts, Southcoast sought to prevent or at least delay Steward from opening its proposed center at Saint Anne’s Hospital by engaging in improper conduct. In October 2015, Southeast filed suit against the DPH, Saint Anne’s Hospital, and Steward, seeking a preliminary injunction to block Steward from operating a cardiac catheterization service at Saint Anne’s Hospital. The lawsuit is objectively baseless and lacks merit, since the DPH acted in accordance with the law, the plaintiff claimed. Furthermore, a Southcoast executive made defamatory statements to the media and falsely suggested that Steward manipulated the regulations for an unfair benefit.

The plaintiff asserts claims for tortious interference with business relations, defamation, and monopolization in violation of Section 2 of the Sherman Act and Massachusetts’ antitrust law (M.G.L. Chapter 93). The action seeks injunctive relief, treble damages, costs of suit, attorney fees, and any other just and proper relief.

The case is No. 1:15-cv-14188-MLW.

Attorneys: Daniel N. Marx, Kevin C. Conroy, and Jeremy W. Meisinger (Foley Hoag LLP) for Steward Health Care System LLC.

Companies: Steward Health Care System LLC; Southcoast Health System, Inc.

News: Antitrust MassachusettsNews