Insights

Missouri Multi-Specialty Medical Group Sues Medical Center for Antitrust Violations

On January 18, 2006, Ferguson Medical Group, L.P. ("FMG") filed a Complaint against Defendants Missouri Delta Medical Center ("MDMC"), MDMC Board Member and former Chairman of the Board Executive Committee, Robert Scott Matthews and MDMC President and CEO, Charles D. Ancell in the U.S. District Court for the Eastern District of Missouri, Southeast Division. FMG alleged violation of Section 2 of the Sherman Act, a violation of the Missouri antitrust laws, and a number of additional causes of action.

Plaintiff FMG is a multi-specialty physician group that also provides ancillary services and outpatient diagnostic and surgical services in Scott County, Missouri and in surrounding areas. Defendant MDMC operates the only full-service, acute-care hospital in Scott County. FMG and MDMC entered into a contract around December of 2001 for FMG to provide physician call coverage and medical services to emergency room patients who lack a family physician on the MDMC staff.

FMG asserts that the product market consists of "ancillary medical services and outpatient diagnostic and surgical services" and that the geographic market consists of "portions of Scott County from Sikeston South, adjacent portions of Mississippi County, New Madrid County, and small adjoining areas in Illinois and Kentucky." FMG alleges that MDMC is the dominant provider in this market.

According to the Complaint, MDMC believed that FMG should limit itself to primary care services, instead of operating as a multi-specialty group. The Complaint contains a number of allegations along these lines of MDMC's anticompetitive intent. FMG also alleges that MDMC "has engaged in numerous predatory and anti-competitive acts" in order to "dominate the market and eliminate competition." The Complaint asserts that starting in 2000 and 2001, MDMC "began its campaign to disrupt and eliminate FMG and to divert FGM's patient base," citing as examples: "termination of call contracts with FMG, discrimination against FMG in recruiting, peer review, and credentialing matters, withholding coverage for FMG physicians, restriction of patient referrals to competitors of MDMC, and inducement of FMG limited partners of FMG [sic] to breach their fiduciary duties and contracts with FMG." FMG also alleges that MDMC has entered into exclusive contracts with employers in order to prevent competition for occupational medicine services, and that MDMC breached the FMG/MDMC contract by terminating the coverage arrangement with FMG physicians.

The Complaint contains eight counts: attempt to monopolize under Section 2 of the Sherman Act, conspiracy to monopolize under Section 2 of the Sherman Act, attempt to monopolize under Missouri law, conspiracy to monopolize under Missouri law, and four other state law claims.

A copy of the Complaint is available at this link.

For additional information about this Antitrust Development, please contact Toby G. Singer, leader of the Health Care Antitrust Practice.

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