A battle between two for-profit healthcare systems over the sale of a hospital in Passaic, N.J., has boiled over into the courts, with dueling accusations of political threats and intimidation, according to local press reports.
Ontario, Calif.-based Prime Healthcare Services and Philadelphia-based Hudson Hospital Holdco both are seeking to acquire the nonprofit Saint Mary's Hospital and trying to establish footholds in northern New Jersey, reports the Star-Ledger.
Prime recently filed suit in Passaic County Superior Court claiming Vivek Garipalli, one of the owners of Holdco, told Prime chief executive Prem Reddy he would use his sway with Jersey politicians and unions to ruin Reddy's reputation, according to the Star-Ledger.
In the suit, Prime accused Hudson of organizing opposition against Prime after the California company signed asset agreements with for-sale hospitals, then swooping in to acquire the hospitals at a discount. It also claimed Garipalli offered to withdraw Holdco's bid for a hospital in Rhode Island that Prime also was trying to acquire in exchange for Prime withdrawing its bid for Saint Mary's.
Holdco attorney Thomas Ajamie denied the accusations, saying in a letter that Reddy was the one threatening to use his political and union connections to "destroy our client if he dared to compete with Prime," the paper said.
Prime's lawsuit also accused the CEO of a hospital in Paterson, N.J., of trying to influence legislators against Prime in a bid to force the closure of Saint Mary's. The hospital declined comment.
Meanwhile, in Idaho, Portneuf Medical Center in Pocatello is facing a federal suit from a medical consultant claiming the hospital thwarted competition by controlling area anesthesiologists, resulting in patients being overcharged.
Anesthesiologist Terry Elquist alleged the hospital pressured Anesthesia Associates to drop Elquist's medical consulting business if he didn't end his plans to open a surgical center in Pocatello and agree not to open one within 100 miles of the city, according to an Idaho Business Review report recounted by the Associated Press. The anesthesiology group subsequently dropped him.
The hospital asked for the suit's dismissal, arguing that even if the anesthesiologists were pressured to sever their ties with Elquist, he could have started another business and still could have opened a surgery center, according to the report.
The Associated Press noted a separate case in which the Federal Trade Commission and Idaho's attorney general brought an anti-trust suit against St. Luke's Health System and the medical group the healthcare system purchased last year.
To learn more:
- read the Star-Ledger report (includes a link to the suit)
- here's the Associated Press report