Trinity Health hospitals file parallel lawsuits calling anesthesiology group's noncompetes unlawful

Two of Trinity Health’s affiliate hospitals mounted lawsuits against a large anesthesia group alleging that noncompete and non-solicitation clauses included in its providers’ contracts restrict competition, drive high prices and “compel” the hospital to accept their terms.

Holy Cross Hospital and St. Joseph’s Hospital Health Center filed the parallel complaints in the U.S. District Courts for Southern Florida and Northern New York, the federal courts for each respective facility.

Both note that the defendant, North American Partners in Anesthesia (NAPA), is asking “exorbitant payments for critical and understaffed patient services” in the markets it allegedly restricts. They also said that the group has “demanded an exorbitant multi-million payment to waive the non-competes” should the hospitals want to employ the physicians directly.

The enforcement of those noncompetes and non-solicitation clauses are violations of federal and state antitrust laws, the hospitals allege.

The plaintiffs said they have suffered “millions of dollars” in damages as a result of the clauses and NAPA’s monopoly power. They are petitioning the courts to release physicians practicing at the hospitals from the clauses’ restrictions and to grant three times the above millions of damages in relief as well as other monetary relief.

“[NAPA] does not see the non-competes as needed to protect it against unfair competition, but uses them to impede the free movement of its providers so that it can capture the value of their scarce services,” according to language in one of the complaints that is near-identical to its counterpart. “… The non-competes should be declared void so that the anesthesia providers can freely offer their services to patients in need.”

In statements to reporters, a spokesperson to NAPA said the group believes the claims have no merit and “are prepared to defend against their allegations and seek appropriate relief for the hospitals' actions in the judicial system.” Fierce Healthcare has reached out to NAPA for confirmation or any additional comment.

NAPA employs 5,000 clinicians who provide services at 400 facilities in 22 states. It serves over 2 million patients per year, logs about $1.8 billion in annual revenue and claims to be North America’s largest provider of anesthesia services, according to the lawsuits.

Holy Cross Hospital is a 557-bed facility in Ft. Lauderdale, Florida, while St. Joseph’s Hospital Health Center is a 431-bed hospital in Syracuse, New York. Their parent system, Livonia, Michigan-based Trinity Health, runs more than 100 hospitals and reported almost $21.6 billion of revenue in its most recent fiscal year.

Monopoly power over an anesthesiology market and noncompete clauses have been in regulators’ spotlight as of late. Earlier this week, Colorado Attorney General Phil Weiser and U.S. Anesthesia Partners agreed to a deal in which the latter cut ties with five hospitals and plans to wind down its existing noncompete clauses to avoid an antitrust investigation. That same group has been targeted by a Federal Trade Commission lawsuit alleging similar antitrust conduct in Texas, and has seen its private equity backing held up by the Biden administration as an example of “corporate greed in healthcare.”