AVH, doctors face antitrust lawsuit
Aspen Valley Hospital, two area medical firms and eight physicians conspired to monopolize the local market for orthopaedic services and exclude outsiders who might want to do business here, according to allegations laid out in a suit filed last month in federal district court.
In what appears to be the first ever such suit against the hospital, Aspen Orthopaedics and Sports Medicine – a two-doctor firm opened in 1996 by Dr. Gary Brazina and Dr. Steven Nadler – charged the hospital with violations of the federal antitrust law known as the Sherman Act. It also charges the hospital and its alleged co-conspirators with violations of Colorado’s antitrust and common law statutes.
“Aspen-area orthopaedic patients,” the complaint alleges, “have been denied the benefits of free and open competition with respect to the provision of [orthopaedic] services. Prices are maintained at artificial and non-competitive levels, over and above what they would otherwise be,” according to the suit, filed in Denver on Sept. 9.
Orthopaedic Associates of Aspen and Glenwood and its owners – Dr. John Freeman, Dr. Robert Hunter, Dr. Tomas Pevny and Dr. Mark Purnell – are also named as defendants in the suit, as are Aspen Emergency Medicine and its owners, Dr. John Glissman, Dr. J. Stevens Ayers, Dr. Marion Berg and Dr. Christopher Martinez.
The complaint outlines 20 separate claims against one combination or another of defendants, with charges including conspiracy to monopolize, breach of contract, denial of due process, interference with business relations, slander and libel.
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“What’s really the issue here is the freezing out of the market of Dr. Nadler and Dr. Brazina,” said Sander Karp, one of three attorneys for the plaintiffs.
After three years of trying unsuccessfully to establish a medical practice in Aspen, Nadler and Brazina felt they had enough evidence to show the hospital, clinics and doctors intentionally undermined their business.
“There isn’t a document that ties the defendants together in conspiracy,” Karp admitted. “But our complaint lays out a series of actions and conduct that show pretty well that Aspen Emergency Medicine, Orthopaedic Associates and the hospital shut out our clients.”
The hospital lies at the center of the case, because the emergency room is often the first stop for people with joint and bone injuries who require orthopaedic services. It is there that visitors and locals alike are referred to specialists who can tend to their recovery.
“The practice of orthopaedic medicine in the Aspen area is unique in that it is predominantly seasonal in nature and dependent on referrals from emergency department physicians,” the complaint reads.
Brazina and Nadler allege that physicians working for Aspen Emergency Medicine, which provides professional staffing in the emergency room, violated hospital policy by sending most patients to Orthopaedic Associates’ doctors, even when Brazina or Nadler were on the on-call orthopaedic surgeon.
According to the complaint, between Christmas 1998 and New Year’s 1999, the plaintiffs received no referrals. And, over the course of more than two years, they received “very few orthopaedic referrals from the emergency room at Aspen Valley Hospital, with most of the referrals that did occur consisting of patients who were foreign nationals or uninsured.”
Until earlier this year, hospital policy called for the on-call doctor to be given referrals from the emergency room. The policy was changed in February, according to Aspen Valley Hospital attorney Paul Taddune, to give emergency room physicians more discretion on referrals.
Commenting on the case, Taddune said, “We don’t believe there is any liability on the part of the hospital. We’ll be filing a response soon that will make our position public.”
But the complaint, which is 54 pages long, is very specific about the ties between Orthopaedic Associates and the hospital. The medical firm owns the Snowmass Urgent Care Clinic, which the hospital leases as a triage facility, and the hospital owns Midvalley Medical Center in Basalt, part of which is leased to the firm.
The suit cites Orthopaedic Associates’ John Freeman’s directive to emergency room staff (who work for a different company) that no patients from Snowmass be referred to either of the plaintiffs.
It also alleges that both Orthopaedic Associates and the hospital conspired to keep Brazina and Nadler from using the facilities at the Midvalley Medical Center.
When Brazina and Nadler asked the hospital for privileges at Midvalley, they were allegedly told that Orthopaedic Associates had exclusive access, which was granted by the building’s developer. When they asked the builder about it, they were told that the hospital held the master lease and could make the call. Ultimately, control was not placed in hospital hands, but Orthopaedic Associates still managed to control 25 percent of the space at the clinic.
Brazina and Nadler also allege that doctors from both companies committed slander and libel by questioning their competence in public.
Orthopaedic Associates also had little to say about the case, except for a prepared statement from its administrator. “We will defend ourselves against these allegations and believe the court will find the claims of the plaintiffs to be without merit,” the statement said.
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