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Analysis

CHI Franciscan Health, Washington State Settle Antitrust Suit

By John Commins  
   March 20, 2019

CHI Franciscan has confirmed that the case has been settled, but few details have been made public.

Washington state has settled a price fixing suit involving CHI Franciscan Health and two physician practices in the Tacoma area, the Kitsap Sun reported.

Details of the settlement are scarce. Washington Attorney General Bob Ferguson's office did not return queries Wednesday, but the settlement was confirmed by a spokeswoman for CHI Franciscan.

The trial was scheduled to begin this week in U.S. District Court in Tacoma. The two sides were ordered to file dismissal paperwork by the end of April. 

Cary Evans, vice president of communications & government affairs at CHI Franciscan, said that "along with the court's recent judgment to remove WestSound Orthopaedics from the lawsuit, the settlement ensures CHI Franciscan's joint affiliations with WestSound and The Doctors Clinic remain in place."

"This is good for patients and doctors on the Peninsula, keeps our highly skilled doctors in our community, and ensures everyone has access to great care close to home," Evans said.

Ferguson filed suit against CHI Franciscan, The Doctors Clinic and WestSound Orthopaedics in August 2017, to undo what he said were two unlawful agreements that raised prices and decreased competition for healthcare on the Kitsap Peninsula.

"These transactions were intentionally made to decrease competition, increase prices, and pad CHI Franciscan's bottom line at the expense of its patients," Ferguson said at the time, alleging that CHI Franciscan has netted well over $1 million in ill-gotten gains.

CHI Franciscan WestSound Orthopaedics, a practice of seven orthopedic physicians based in Silverdale in July 2016. Two months later, CHI Franciscan announced an affiliation with The Doctors Clinic, a multi-specialty practice with more than 50 physicians, which has seven locations in Kitsap County.

In the lawsuit, the state alleged that both transactions violated state and federal antitrust laws.

However, CHI Franciscan denied the allegations, and said the physicians' groups were financially distressed and acted independently when they proposed the affiliations, and that they had attempted unsuccessfully to work with Ferguson's office to find a solution.

"We are very concerned that the AG’s actions will drive away physicians from the community, inhibit our ability to recruit new physicians to the area, and will ultimately result in fewer choices and less quality healthcare available to the residents of the community," CHI Francisican said in prepared remarks.

 

 

 

 

 

“This is good for patients and doctors on the peninsula, keeps our highly skilled doctors in our community, and ensures everyone has access to great care close to home.”

John Commins is a senior editor at HealthLeaders.


KEY TAKEAWAYS

CHI Franciscan acquired the two physicians groups in July 2016, and the state's attorney general immediately filed suit to block the deals.

In the lawsuit, the state alleged that both transactions violated state and federal antitrust laws.

The trial was scheduled to begin this week. The two sides were ordered to file dismissal paperwork by the end of April. 


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