Trinity Health sues medical group, challenges non-compete clauses

Livonia, Mich.-based Trinity Health filed a federal lawsuit against Anesthesia Associates of Ann Arbor (Mich.) on July 23, alleging the medical group's non-compete clauses could threaten operations at six of Trinity's hospitals, according to Bloomberg Law.

Anesthesia Associates of Ann Arbor is the exclusive anesthesiology provider at six of Trinity's hospitals, and the anesthesiology group has terminated or is terminating its contracts with Aetna, Blue Cross Blue Shield and Priority Health, according to the complaint.

Anesthesia Associates of Ann Arbor is allegedly breaching its contract with Trinity by terminating the insurer contracts. Trinity claims its contract with Anesthesia Associates of Ann Arbor requires the anesthesiology group to remain in network with the payers to ensure Trinity's patients are fully covered by their health insurance when they require anesthesia at its hospitals.

Trinity says it needs to employ many of Anesthesia Associates of Ann Arbor's anesthesiologists to ensure patients will have anesthesia services covered at Trinity's hospitals. However, Anesthesia Associates of Ann Arbor is allegedly refusing to release physicians from their non-competes.

Trinity alleges there are many reasons the non-competes are unreasonable and illegal in these circumstances.

"If the non-competes are not enjoined, A4 will be able to violate its contracts with plaintiffs with impunity and potentially threaten the insurance coverage of thousands of THM patients, secure in the belief that its non-competes will allow it to remain under contract whether it observes its obligations or not," the complaint states. "Defendants seek to impose an impossible dilemma on plaintiffs — either accept A4's breaches of contract and risk losing substantial patients whose insurance coverage has been disrupted, or terminate A4 without adequate replacement anesthesiologists available, and thereby face equal or greater losses due to interference with surgeries and other critical cases."

Trinity is seeking a court order requiring Anesthesia Associates of Ann Arbor to release their physician employees practicing at Trinity's hospitals from any restrictions on their employment. The health system is also seeking damages related to the alleged breach of contract and a declaratory judgment finding that the anesthesiology group's noncompetition clauses in their agreements with physicians violate federal and Michigan antitrust laws to the extent that they are used to prevent anesthesiologists from being employed by Trinity.

Access the Bloomberg Law article here.

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