Deborah Heart & Lung Ctr. v. Virtua Health Inc.
| Decision Date | 24 March 2015 |
| Docket Number | Civil No. 11-1290 (RMB/KMW) |
| Parties | DEBORAH HEART AND LUNG CENTER, Plaintiff, v. VIRTUA HEALTH INC., et al., Defendants. |
| Court | U.S. District Court — District of New Jersey |
NOT FOR PUBLICATION
Appearances:
Anthony Argiropoulos
Scott B. Murray
Thomas Kane
Sills Cummis & Gross, P.C.
650 College Road East
Princeton, New Jersey 08540
Attorneys for Plaintiff Deborah Heart and Lung Center
James J. Ferrelli
Philip H. Lebowitz
John E. Sindoni
Duane Morris LLP
1940 Route 70 East, Suite 200
Cherry Hill, New Jersey 08003
Attorneys for DefendantVirtua Health, Inc. and Virtua
Memorial Hospital Burlington County
Robert V. Dell'Osa
Cozen O'Connor P.C.
457 Haddonfield Road, Suite 300
Cherry Hill, New Jersey 08002
Attorneys for The Cardiology Group, P.A.
This matter comes before the Court upon a two motions for summary judgment filed by the Defendants in this matter, Virtua Health, Inc. and Virtua Memorial Hospital Burlington County("Virtua") and The Cardiology Group, P.A.("CGPA"), (collectively referred to as the "Defendants").Plaintiff Deborah Heart and Lung Center ("Plaintiff" or "Deborah") has opposed both motions.This Court heard oral argument on September 22, 2014, and ordered the parties to submit supplemental briefing on the issue of anticompetitive effects.After reviewing the parties' submissions, this Court will grant the Defendants' respective motions for summary judgment for the reasons set forth below.
The record in this matter is voluminous and complex, and the facts, both undisputed and disputed, are well known to the parties.Therefore, this Court will set forth only those facts necessary for resolution of the instant motions.As is required on a motion for summary judgment, this Court will draw all inferences in favor of Plaintiff as the non-moving party.Kopec v. Tate, 361 F.3d 772, 775(3d Cir.2004)( that wherethere are significant factual disputes between the parties, the facts should be construed in favor of the non-moving party).
For the reasons set forth below, resolution of the instant motions turns entirely on whether Plaintiff has presented sufficient evidence of anticompetitive effects.See discussioninfra at 25-44.Therefore, the facts recited herein will focus on this issue, and the Court will provide a brief overview of other facts as they relate to the alleged conspiracy underlying this case.1
Plaintiff Deborah is a specialty hospital located in Browns Mills, New Jersey.[Virtua's Statement of Facts ("VSOF") and Plaintiff's Response ("PR")at ¶ 1].2Deborah is one of only three hospitals in the United States that is exempt from having to collect co-pays, deductibles, or any other out-of-pocket expenses from patients because the federal government recognizesits special status as a charity hospital.[PSOF at ¶ 2].CGPA was a cardiology practice that practiced in Burlington County at the time relevant to this law suit.[Plaintiff's Statement of Fact ("PSOF") and Virtua's Response ("VR")at ¶ 17].In July 2012, Virtua purchased all of CGPA's assets but none of its liabilities.[Id.].Virtua is a multi-hospital health system in southern New Jersey, which includes Virtua Memorial Hospital Burlington County.[VSOF & PRat ¶ 3].At the relevant time period, under applicable regulations, Virtua was not authorized to provide cardiac surgery.[PSOF & VRat ¶ 27].Penn Presbyterian Medical Center ("PPMC") is a hospital in West Philadelphia and is part of the University of Pennsylvania Health System.[PSOF & VRat ¶ 22].PPMC is authorized to perform cardiac surgery.
The term "ACI procedures," which are performed in hospitals, refers to advanced cardiac interventional procedures comprised of three types of services - angioplasties, electrophysiology, and cardiac surgery.[VSOF & PRat ¶ 6].ACI procedures form two relevant product markets: emergency angioplasty and non-emergency ACI procedures.[VSOF and PRat ¶ 6].A "PCI" refers to a "Percutaneous Coronary Intervention"and is a type of angioplasty.3SeeExpert Report of Evan Hoffman Schouten, Pl.'s Ex. 140at 3.In Pennsylvania and New Jersey, hospitals may only provide facilities for procedures under a license from the state's Department of Health.[VSOF & PRat ¶ 8].It is undisputed that during the relevant time period Deborah and PPMC were licensed to provide cardiac surgery services whereas Virtua was not.[PSOF & VRat ¶ 27].
When a patient requires an ACI procedure and the physician lacks the expertise to provide the ACI procedure or where the hospital where the patient is seen is not licensed to provide the service, a physician must refer the patient to a more specialized interventional cardiologist or to a hospital where the interventional cardiologist can perform the service.[VSOR & PRat ¶¶ 7-10].Prior to the transfer, patients must consent and the requirements of the New Jersey Patient's Bill of Rights must be fulfilled.[VSOF & PRat ¶¶ 7-10].4
ii.Deborah & CGPA
Because none of the CGPA cardiologists performed diagnostic invasive or interventional procedures before July 2006, patientsin need of those procedures were referred to non-CGPA cardiologists who performed those types of specialty procedures, typically either to a Deborah-employed physician, or to physicians at Cooper University Hospital.[VSOF & PRat ¶ 15].
In 1992, Deborah approached CGPA about sending more CGPA patients to Deborah, which led to a growing referral relationship between Deborah and CGPA.[Id.at ¶ 16].At this time, where a referral to a Deborah-employed physician was necessary for invasive diagnostic catheterization or ACI services and the CGPA patient was an inpatient or emergency patient at Virtua, the referral required the CGPA patient to be transferred from Virtua to Deborah for treatment by the Deborah-employed physician.[Id.at ¶ 17].
By 1999, the referral relationship between CGPA and Deborah-employed physicians had grown, and CGPA entered into five identical individual contracts (the "Deborah Physician Leases") with certain interventional cardiologists employed by Deborah, including Charles A. Dennis, M.D.[Id.at ¶ 18].At the time CGPA entered into the Deborah Physician Leases, CGPA physicians primarily treated their patients at CGPA's own offices and at Virtua.[Id.at ¶ 22].Although treated by Deborah-employed physicians, those patients remained patients ofCGPA, and CGPA billed insurers and the patient for the services provided by the Deborah-employed physicians.[Id.at ¶ 21].
At the time of the 2002 Deborah Physician Leases between CGPA and Dr. Dennis, Dr. Dennis was the Chair of Deborah's Department of Cardiovascular Diseases, and had been employed at Deborah as an interventional cardiologist since 1991.[Id.at ¶ 25].While still a Deborah employee in 2003, Dr. Dennis applied for and was granted medical staff privileges to perform low-risk catheterizations at Virtua, and Dr. Dennis became Virtua's first Cardiac Catheterization Laboratory Director, with Deborah's knowledge and consent.[Id.at ¶ 28].
On January 1, 2005, while the 2002 Deborah Physician Leases were in effect, CGPA entered into a Cardiology Services Agreement with Virtua (the "CSA") under which CGPA agreed to "provide all cardiac services to all patients in the Cardiovascular Department of the Hospital[Virtua]" on an exclusive basis . . . ."[Id.at ¶ 31].The purpose of the CSA was "to promote control, cost, quality and efficiency of service in the performance of cardiac services" at Virtua, and its terms addressed CGPA's administrative and coverage obligations as the exclusive provider for cardiology services at Virtua.[Id.at ¶ 32].In each year that the CSA was in effect, patients were transferred from Virtua to Deborah for procedures to beperformed at Deborah, as follows: 2005, 627 patients; 2006, 652 patients; 2007, 392 patients; 2008, 157 patients; 2009, 169 patients; and between January 1, 2010 and July 15, 2010, 60 patients.[Id.at ¶ 37].In 2006, Virtua became licensed by the New Jersey Department of Health and Senior Services to operate as a full-service adult diagnostic cardiac catheterization facility; the facility became operational in 2007.[Id.at ¶ 38].
iv.Dr. Dennis and His Suspension
Dr. Dennis was employed by Deborah from 1991 to 2006; he announced his resignation on February 21, 2006, providing notice of his intention to resign from Deborah effective June 30, 2006, in order to join CGPA and become a CGPA employee.[Id.at ¶ 41].With Dr. Dennis employed by CGPA, it became unnecessary for CGPA to continue to lease Deborah-employed physicians to treat their patients in need of interventional services, so the Deborah Physician Leases were terminated in July 2006.[Id.at ¶ 46].From July 2006 through February 2007, Dr. Dennis continued to perform angioplasties at Deborah.[Id.at ¶ 47].
Deborah alleges that as early as February 2006, Virtua executives were in contact with Dr. Dennis in an attempt to recruit him to help build Virtua's Cardiac Institute so that Virtua could obtain a cardiac surgery license.Deborah furthercontends that Virtua was part of a conspiracy with CGPA to force Deborah into either a merger or complete shutdown.[PSOF at ¶¶ 78-82].5
While the reasons precipitating his suspension are hotly disputed by the parties, it is undisputed that on February 20, 2007, Deborah suspended Dr. Dennis' privileges to perform interventional procedures at Deborah.[PSOF at ¶ 62].This suspension caused an immediate rift between Deborah and CGPA.On the very same day as the suspension, Diane Hinkel, CGPA's administrator, wrote to Deborah and explained that CGPA would not sign the terms of a new Deborah-CGPA arrangement (called the "Deborah-EP Physician Lease") due to Deborah's suspension of Dr. Dennis's privileges.[VSOF & PRat ¶ 53].Deborah...
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