Rocky Mountain Medical Center has filed a lawsuit against St. Mark's Hospital claiming the hospital tried to shut them down by orchestrating a group boycott.
The lawsuit said St. Mark's, 1200 E. 3900 South, pressured managed healthcare companies such as United Healthcare of Utah, Altius Health Plans and CIGNA Healthcare of Utah to agree not to contract with Rocky Mountain, 2500 S. State, or face heavy penalties — rate increases of up to 20 percent.
"When we went to negotiate with those companies," said Eve Hutcherson, public relations director for IASIS Healthcare, Rocky Mountain's parent company, "they said they would be unable to negotiate because of what St. Mark's had done."
IASIS said St. Mark's is violating Utah's anti-trust statutes. The lawsuit charged St. Mark's with per se illegal group boycott, unreasonable restraint of trade, attempted monopolization and international interference with prospective economic relations. IASIS is seeking an immediate injunction against the hospital.
When Rocky Mountain opened its doors in April, the closest competitor was St. Mark's, just 10 minutes away.
"When they realized Rocky Mountain would open, they renegotiated contracts with managed care companies and inserted penalties that made is impossible for those companies to do business (with Rocky Mountain,)" Hutcherson said.
The lawsuit claims St. Mark's threatened penalties would have cost the managed care companies millions of extra dollars each year.
According to the suit filed in 3rd District Court, Rocky Mountain alleges St. Mark's CEO John Hanshaw said, "St. Mark's is doing everything it can to prevent Rocky Mountain from obtaining managed care contracts in order to assure Rocky Mountain does not survive."
The lawsuit also claimed Allison Robbins, the officer in charge of managed care contracting for St. Mark's, said her "sole reason for living" was to shut Rocky Mountain down in 18 months.
A spokeswoman for St. Mark's said she cannot comment on specific points on the lawsuit, but the hospital believes it makes several false statements.
"We're very confident that our business practices and our managed care contracts are legal and ethical," said Deborah Reiner, director of marketing and public relations for St. Mark's. "We intend to fight the allegations."
Reiner said at no time did St. Mark's approach an insurance provider and tell them not to do business with an IASIS facility.
Matt Gregory, vice president of sales for United, had no comment on the lawsuit but said, "We pick and choose what best fits our group."
Altius spokesman Dee Brewer said its current contract with St. Mark's was established in 1998. He said the contract includes provisions which make it more affordable for patients to go to St. Mark's.
"Our decision is made on the best value for customers," said Brewer. He said it's important for both St. Mark's and IASIS to thrive. CIGNA declined comment.
But Hutcherson said something has been keeping people away. "We have not experienced the growth in the numbers of patients we were expecting," she said.
From April 10 to July 30, the suit claimed Rocky Mountain never had more than 15patients at a time. The medical center said it is losing $1 million of business each month. Rocky Mountain officials said closing is a real threat.
About 80percent of Utahns belong to a managed care program. That gives patients the option of choosing St. Mark's or any of the four IASIS hospitals in the valley.
Contributing: Jennifer Dobner