“Monopoly position is not enough – Sentara seeks to eliminate competitors”

2021-05-4

Lawsuit by Chesapeake Regional Medical Center (CRMC) accuses Sentara of stealing cardiologists and interfering in its application to start an open-heart surgery unit.

Sentara Healthcare used insider information to snatch cardiac surgeons from their contracts with CRMC and further cement Sentara’s monopoly on cardiology services in the Hampton Roads area, said a lawsuit filed against Sentara.

The suit filed in Chesapeake Circuit Court seeks at least $20,350,000 in damages and lays out a pattern of unfair business practices that constitute tortious interference.

They include:

Sentara has 70 percent of the overall market in cardiology services, the suit said, “but a monopoly position is not enough – Sentara also seeks to eliminate competitors who attempt to encroach on its monopoly service lines.”
CRMC had approval from the Virginia Department of Health for its 2017 application to start an open-heart surgery unit until Sentara “intervened in the proceeding in an effort to thwart CRMC’s application.”
While Sentara was fighting CRMC’s application for the heart unit, it “began secretly meeting with the cardiologists who serviced CRMC’s internal cardiology program, the Bayview interventional cardiologists, to persuade them to join Sentara and leave CRMC.”
Sentara knew that stealing the cardiologists would hurt CRMC, so it “attempted to conduct its meetings in secret by providing nondisclosure agreements to the cardiologists.”

C&BP has reported on Sentara’s tactics to block Chesapeake Regional Medical Center’s heart unit application, which included a favorable ruling from a Norfolk Circuit Court judge who was once a Sentara attorney. In the earlier case, Hall had worked for Sentara on a long-running Certificate of Public Need (COPN) application to the state, seeking to secure a permit to start a liver-transplant unit.

That judge, Mary Jane Hall, worked on that earlier case with Sentara’s current outside counsel, Jamie B. Martin. Neither reported their apparent conflict to the other parties in the case.

Five Counts Including Conspiracy

The lawsuit cites five counts of alleged wrongdoing by Sentara.

The first count says Sentara committed tortious interference by using “improper means and methods with the medical director contracts” of physicians affiliated with Chesapeake Regional Medical Center.

Sentara, according to the second count, committed “tortious interference with business expectancies” by interfering with the cardiologists’ contracts with CRMC. Without that interference, the suit claims, the cardiologists would have been expected to remain with CRMC.

The final three counts are tortious interference with contract, statutory business conspiracy and common law conspiracy.

According to an article from the law firm Berlik Law, statutory business conspiracy “is popular among plaintiffs’ lawyers not only because of the triple-damages provision but also because a successful plaintiff can recover attorneys’ fees. To state a valid claim for statutory business conspiracy, a plaintiff must allege three key elements: That the defendants (1) engaged in concerted action, (2) with legal malice, (3) that resulted in damages. ‘Concerted action’ refers to the requirement that the defendants combined together to effect a preconceived plan and unity of design and purpose.”

The lawsuit was filed by Virginia Beach attorney Johan Conrod, who works with the Cicala Law Firm of Dripping Springs, Texas. The firm is suing opioid manufacturers for damages on behalf of multiple Virginia municipalities.

Conrod was previously a member of the Norfolk firm, Kaufman & Canoles, which specializes in COPN applications for Virginia health care providers.

Cone Health Merger at Stake

Sentara registered with the IRS as a tax-exempt nonprofit charity but has net assets of $6 billion and pays its CEO $8 million a year. C&BP has been probing how the healthcare giant that’s seeking to expand into North Carolina uses lobbying and influence to crush competitors, the lengths it goes to do that and the impact on average citizens.

This suit by Chesapeake Regional Medical Center comes as Sentara seeks approval for its $11 billion proposed merger with North Carolina-based Cone Health.

The merger must clear review by the Federal Trade Commission, which has criticized the anti-competitive nature of COPN laws for more than 30 years and five successive presidential administrations.

North Carolina Attorney General Josh Stein, a Democrat, is also seeking public comment about the proposed merger.

Ray Locker is enterprise and investigative editor of Checks and Balances Project, an investigative watchdog blog holding government officials, lobbyists, and corporate management accountable to the public. Funding for C&BP is provided by Renew American Prosperity and individual donors.