Minnesota Ass'n of Nurse Anesthetists v. Unity
| Decision Date | 07 May 1998 |
| Docket Number | Civil No. 4-96-804 (ADM/JGL). |
| Citation | 5 F.Supp.2d 694 |
| Parties | MINNESOTA ASSOCIATION OF NURSE ANESTHETISTS, Gayle McKay, Ladonna Schweer, John Okonek, Bernadine Okonek, Annette Atchison, Fred Benjamin, Bart Barry, Faye Leatherman, Sue Milbach, Sandra Henschke, Judith A. Schmidt and Gary Hagen, Plaintiffs, v. UNITY HOSPITAL, Mercy Hospital, William MacNally, President and Chief Executive Officer of Unity and Mercy Hospitals, Allina Health System Corp., Mark Sperry, M.D., Gary Baggenstoss, M.D., John Murphy, in his capacity as Vice President of Unity and Mercy Medical Centers, James Cumming, M.D., John Rydberg, M.D., Midwest Anesthesia, P.A., Thelma M. Albay, M.D., Minda Castillejos, M.D., Teri Heil, M.D., Sang Hong, M.D., Ted Janossy, M.D., Raymond Kloepper II, M.D., John Magdsick, M.D., Thomas Maggs, M.D., Thomas Polta, M.D., John Roseberg, M.D., Jai Suh, M.D., Jeffrey Yue, M.D., Mark Eggen, M.D., Metropolitan Anesthesia Network, Allen Tank, Theodore Grindal, Esq., Craig Johnson, M.D. (both individually and in his capacity as President of the Minnesota Society of Anesthesiologists), St. Cloud Hospital, John Frobenius, Chief Executive Officer of St. Cloud Hospital, Linda Chmielewski, Vice President Hospital Operations of St. Cloud Hospital, Anesthesia Associates of St. Cloud Ltd., Gary A. Boeke, M.D., Philip F. Boyle, M.D., L. Michael Espeland, M.D., Alan D. Espelien, M.D., Paul J. Halverson, M.D., Lanse C. Lang, M.D., William H. Rice, M.D., Allan Reitz, M.D., and Annette E. Zwick, M.D., Defendants. |
| Court | U.S. District Court — District of Minnesota |
Herbert J. Stern, Stern & Greenberg, David S. Stone, Freedman & Stone, Roseland, NJ and William S. Rosen, Rosen & Rosen, St. Paul, MN, for Plaintiffs.
John D. French, Jay D. Christiansen, Richard A. Duncan, Elizabeth H. Schmiesing, Faegre & Benson, Minneapolis, MN, for "Allina" Defendants.
Thomas Fraser, Laurie J. Miller, Cynthia Jokela, Fredrickson & Byron, Minneapolis, MN, for "MAPA" Defendants.
Kevin J. Hughes, Paul R. Harris, Hughes, Mathews & Didier, St. Cloud, MN, for St. Cloud Hospital Defendants.
Joseph M. Musilek, Eric Tostrud, Lockridge Grindal Nauen & Holstein, Minneapolis, MN, for "AASC" Defendants.
The above-entitled matter came on for hearing before the undersigned United States District Judge on January 21, 1998, pursuant to Defendants' motion for summary judgment. This case alleges a conspiracy in which Defendants purportedly conspired to eliminate the use of certified registered nurse anesthetists in the provision of anesthesia services. Plaintiffs characterize the gravamen of their Complaint as follows: "To maintain their unusually high level of compensation, to facilitate their fraudulent billing and to increase their dominant position in the market, defendant anesthesiologists have conspired with defendant hospitals to terminate plaintiff CRNAs who they see as a threat both to their unusually high level of compensation and to the future of their profession." Pl.'s Mem. in Opp'n to S.J., at 1.
In their Complaint, Plaintiffs assert the following claims: violation of § 1 of the Sherman Act through unreasonable restraint on competition; violation of Minnesota's Antitrust Statute; violation of § 1 of the Sherman Act through illegal boycott; violation of § 2 of the Sherman Act through monopoly, attempted monopolization, and conspiracy to monopolize; violation of §§ 1, 2, 14, 15, and 26 of the Sherman and Clayton Acts through an illegal tying arrangement; violation of federal antitrust laws through the denial of essential facilities; violation of the Minnesota Deceptive Trade Practices Act; violation of the Minnesota Whistleblower Statute; and civil conspiracy.1
The Plaintiffs in this action include twelve certified registered nurse anesthetists ("CRNAs") and the Minnesota Association of Nurse Anesthetists ("MANA"). The Defendants include the Allina Health System, Mercy and Unity Hospitals and two of their administrators (the "Allina Defendants"); the anesthesiologists who work at Mercy and Unity Hospitals, their practice group, and its administrator (the "MAPA Defendants"); the St. Cloud Hospital and two of its administrators (the "St. Cloud Hospital Defendants"); the anesthesiologists who work at St. Cloud Hospital and their practice group (the "AASC Defendants").2 Defendants Unity and Mercy Hospitals, which are located in Fridley, Minnesota, and Coon Rapids, Minnesota, respectively, are jointly owned and administered by Allina Health System.
The landscape of the health care industry has undergone kaleidoscopic changes in the last decade. Today, models of health care built on cost containment and managed care predominate. This transformation has resulted in a number of conflicts which, like the present one, involve difficult human resource issues.
Anesthesiology is a medical specialty in which a qualified medical practitioner renders a patient insensitive to pain during invasive medical procedures. Both anesthesiologists ("MDAs") and CRNAs may administer anesthesia. Although CRNAs do not have the extensive medical education required for MDAs, CRNAs are clinically qualified to administer anesthesia under many circumstances. Stone Aff., Ex. 199, 201. Plaintiffs contend that the delivery of anesthesia services has historically been dominated by nurses rather than doctors. Stone Aff., Ex. 673. According to Plaintiffs, this balance began to shift to some extent when anesthesia delivery became more profitable. Despite this shift, sixty-five percent of the 26 million anesthetics in the United States are still administered by CRNAs. Stone Aff., Ex. 1.
A significant portion of the recipients of anesthesia services are Medicare patients. As a result, the method and criteria for Medicare reimbursement are critically important for both MDAs and CRNAs. Due to the increasing profitability of the profession, Plaintiffs contend that MDAs across the country began to systematically tender multiple, contemporaneous Medicare bills for services provided by CRNAs but ostensibly supervised by MDAs. In an effort to discourage MDAs from billing for anesthesia services in which they played a de minimus role, Congress passed the Tax Equity And Fiscal Responsibility Act of 1982 ("TEFRA"). Plaintiff's Ex. 673, 199, 201. The TEFRA regulations "recognize that an anesthesiologist may either: (1) `personally perform' the anesthesia service; (2) `medically direct' concurrent anesthesia procedures (that is, two, three or four concurrent procedures) involving qualified anesthesia personnel, usually certified registered anesthetists ("CRNA"); or (3) medically supervise anesthesia procedures (that is, more than four concurrent cases)." Stone Aff., Ex. 280. Under the TEFRA regulations, "medical direction" applies only to concurrent procedures, never to a single case. Id. In short, TEFRA required that MDAs maintain a minimal level of involvement, supervisory or otherwise, in order to obtain Medicare reimbursement.
After implementation of the TEFRA regulations, the Health Care Financing Administration ("HCFA") continued to negotiate the delicate balance between reimbursement for MDA and CRNA services. Stone Aff., Ex. 280. Prior to 1989, hospitals billed Medicare collectively for CRNA services and other necessities such as anesthetics, equipment, and operating room time. The Omnibus Budget Reconciliation Act of 1986, however, authorized HCFA to develop a CRNA fee schedule payment system to allow separate Medicare reimbursement for services rendered by CRNAs.3 Id. Consequently, in 1989, CRNAs could bill Medicare directly. CRNA services, however, are not billable when an MDA is billing for full-time service. The 1989 regulations provided: Stone Aff., Ex. 18. Plaintiffs contend that this and other changes to the reimbursement methodology fostered competition between MDAs and CRNAs.
Plaintiffs allege that Defendant MDAs disregarded the Medicare reimbursement requirements and used CRNAs, who were then employed by the hospitals, to actually provide the anesthesia services while the MDAs themselves spent little or no time in the operating room. Stone Aff., Exs. 534, 527, 578. Defendant MDAs allegedly continued to bill Medicare "as if they were personally present in the room and providing the services." Pl.'s Mem. in Opp'n to Df.'s Mot. for S.J., at 5. MDA billing practices allegedly became contentious after 1989, when CRNAs began to bill directly for the same services. Medicare and other insurers refused to pay both a CRNA bill and an MDA bill for the same procedure. Stone Aff., Ex. 242.
In 1991, Travelers Insurance Company performed an audit at Mercy Hospital, which revealed a problem with this "double-billing." Pursuant to its postpayment review of CRNA charges on Medicare claims, Travelers requested that Mercy repay $1476.91 for duplicative bills submitted by MDAs and CRNAs. Stone Aff., Ex. 18. The President of the American Society of Anesthesiology ("ASA") expressed alarm that "this intolerable situation has arisen because of claims being submitted by CRNAs for anesthesia services, which has led these carriers to issue new policies recognizing only the CRNA claim." Stone Aff., Ex. 456.
Theodore Grindal, an attorney for the state association of anesthesiologists, allegedly circulated a letter dated October 28, 1992, (the "Grindal letter") to all anesthesiologists in the state concerning Medicare reimbursement for MDAs and CRNAs. Plaintiffs contend the Grindal letter was a carefully constructed "blueprint" designed to eliminate...
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