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Hospital system, cardiology groups face conspiracy charges

The complaint in Minnesota alleges that the system and the physicians are planning to merge, while the health care groups say it's a misunderstanding.

By Mike Norbut — Posted Feb. 21, 2005

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The Minnesota attorney general has charged a hospital system with attempting to create an anticompetitive merger with two Twin Cities cardiology groups, but the health care groups say that their intentions have been misunderstood.

The complaint, filed by Attorney General Mike Hatch, accuses Minneapolis-based Allina Hospitals & Clinics -- and names St. Paul Heart Clinic and Metropolitan Cardiology Consultants as "co-conspirators" -- of "engaging in an ongoing conspiracy to monopolize the market for cardiology services," in violation of state antitrust laws.

"If [Allina] is able to obtain control over [St. Paul Heart Clinic and Metropolitan Cardiology Consultants], it will have the ability to control the direction of referrals made by its employed cardiologists for cardiology services and will have dramatically increased its bargaining power with third-party payers in negotiating contracts for the provision of cardiology services in the Twin Cities area," the complaint reads.

Allina and the physician groups, however, say they are not discussing a possible merger. They began merger talks last year but ended them when confronted with the state's antitrust concerns.

In a letter to referring physicians, St. Paul Heart Clinic asserted that merger talks never even went so far as to discuss economic interests, and no official offers had ever been made by Allina.

St. Paul doctors "have never received any offer of employment, salary or income guarantees from Allina," the letter states.

St. Paul Heart Clinic, with 26 cardiologists, and Metropolitan Cardiology Consultants, with 16 cardiologists, are two of the largest independent groups in the Twin Cities area. There are several other smaller cardiology practices throughout the region.

The health system, which already owns Minneapolis Cardiology Associates, a 42-physician group, currently is working closely with all affiliated cardiologists on quality issues, Allina spokeswoman Terri Dresen said.

"We think the attorney general is getting misinformation," Dresen said. "Only quality issues are being discussed. We're no longer talking about a merger."

The quality discussions include making cardiology care consistent across all of Allina's 11 hospitals and implementing standards across the system, Dresen said.

The consolidated, systemized model differs from the state's view of smaller, diversified groups competing, said Mark Evans, MD, a cardiologist and president of Metropolitan Cardiology Consultants.

"There is a philosophical debate in Minnesota as to the best way to provide care," Dr. Evans said.

The state, however, thinks that the story goes deeper than that. The lawsuit says the attorney general's office "received information" about Allina's internal announcement about plans to move forward with merger proceedings and threats of legal action that were made against some Allina cardiologists who were considering leaving to form a private practice.

Allina officials are preparing to make their arguments in court.

"We've made several attempts to communicate with the attorney general on this," Dresen said. "We're confident that the court will rule in our favor."

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