Doctors suing Atrium Health will be allowed to leave system

In a lawsuit aimed at allowing a physician practice to break away from the region’s dominant health system, physicians at the Mecklenburg Medical Group (MMG) have accused Charlotte’s Atrium Health, accusing it of monopolistic practices that have been harmful to patients and go against its nonprofit mission. Atrium responded that the doctors suing the system will be allowed to leave. 

92 of the 104 physicians at Mecklenburg—the largest Atrium-owned physician practice which joined what was then Carolinas HealthCare in 1993—are named as plaintiffs in the suit. The doctors said getting out of Atrium’s employment would require them to agree to never “have arrangement with or the financial assistance of insurance companies or others” which would result in them providing “better quality care than Atrium,” essentially preventing them from practicing in the Charlotte region, even in ways which are distinct from the work they did for Atrium.

“Though purporting to be a non-profit institution, Atrium—with its bloated management bureaucracy—has repeatedly complained and contended that it 'loses' millions of dollars on the MMG physicians each year," the suit said, adding that Atrium “is acting as the exact opposite of the non-profit health care provider that it claims to be.”

These restrictive terms were part of new employment agreements presented to MMG physicians in 2017, the suit said, with Atrium allegedly threatening doctors that if they didn’t sign, they would be fired for cause. The physicians argued this is both a violation of the existing employment agreement and would damage the reputation of each doctor fired. The suit asks for the restrictions to be declared “invalid and unenforceable,” thus allowing the physician group to become an independent practice again.

The suit made further allegations about Atrium’s business practices, saying the system has cut staffing in ways that could harm patients, like reducing the number of registered nurses, moving triage nurses to a central location and establishing a call center in place of a dedicated employee in each practice for answering patient phone calls.

Its employment restrictions, the physicians argued, have been part of a broader pattern of Atrium unlawfully holding back competition in the region.

“Atrium has engaged in coercive, unfair, and unscrupulous commercial tactics, including imposition of the unreasonable conditions on practice independence…calculated to prevent Plaintiffs from operating independently in a manner that would lower the costs of medical care to members of the community and/or prevent shortages of physicians in the community, all in order to inflict economic harm on Plaintiffs and the public and in order to restrain trade solely to enrich Atrium’s coffers and to prevent price or other competition in the marketplace,” the suit said.

Atrium expressed surprise over the suit in a statement to the Charlotte Observer, claiming it had been speaking with the MMG doctors just a week earlier about how to address the non-compete clauses in their contracts. The system said it will continue to own MMG itself, with the physicians looking to break away adopting the name Mecklenburg Multi-Specialty Group. 

"We worked hard to find a solution that would be mutually agreeable to everyone — and most importantly would ensure that our patients continue to get the best care possible," Atrium said.

It’s not the first time Atrium has been accused of abusing its market power. In 2016, what was then Carolinas HealthCare System was sued by the Department of Justice and the North Carolina Attorney General’s office on antitrust grounds over steering restrictions in its contracts which insurers which would allow Carolinas to terminate agreements if the insurer encouraged patients to go to less expensive hospitals.

At the same time, Atrium has continued to grow. In February, it announced plans to merge with Macon, Georgia-based Navicent, though it recently called off its larger merger with University of North Carolina Health over governance issues.