Location 24 LLC v. Doctors Same Day Surgery Center & HCA HoldingsDate Filed: January 19, 2022
District Court: Middle District of Florida Tampa Division – Case No. 8:22-cv-00150
Nature of Suit: Antitrust - Anticompetitive Conduct
Defendant Type: Provider
Plaintiff Type: Private
Case Info: https://sourceonhealthcare.org/private-enforcement-cases-highlight-consolidation-and-anticompetitive-practices-in-healthcare-industry/
Court Document: https://www.bloomberglaw.com/product/blaw/document/X6S2IH1T05L9HP9HMMLPTLCTLGN, https://www.bloomberglaw.com/product/blaw/document/X679VRIR4248LOOPA4BSR4KNRA4
The lawsuit claims that HCA engaged in a pattern of conduct that formed partnerships with large surgical practices in the Sarasota area, only such “partnerships” were fraudulent and formed for the purpose of improving HCA’s market power in the orthopedic surgery market.
Plaintiff Location 24 LLC is comprised of a group of doctors at the Kennedy White Orthopedic Center, the largest orthopedic surgical practice in Sarasota, Florida. HCA Holdings, the parent company of HCA Healthcare, is a for-profit corporation that operates locally managed healthcare facilities in 21 U.S. states and the UK, including four hospitals and four ambulatory surgical centers in the Sarasota area. According to the complaint, in forming the partnerships, HCA would take majority control of the partnership at 51% ownership. After assuming control over all decisions of the surgery center, HCA would “deliberately diminish[ ] the quality, reputation, and capabilities of the surgical practice,” while diverting patients to HCA’s wholly-owned hospitals, such as co-defendant in this case, Doctors Same Day Surgery Center. In addition, HCA prevents these surgical centers from terminating the partnerships through financial threats and restrictive covenants and imposes a two-year noncompete clause on physicians to prevent establishment of new surgery centers.
On November 3, 2022, both parties participated in a mediation conference that resulted in an impasse. Subsequently, the court granted HCA’s motion to dismiss and the case was closed on January 31, 2023.