Becker's Spine Review

57 HEALTHCARE NEWS Judge tosses lawsuit alleging New York orthopedic surgeon set former office manager up for arrest By Alan Condon A civil lawsuit that alleged a NYU Langone orthopedic surgeon set his office manager up for a charge of grand larceny has been thrown out by a Manhattan judge, The Madison Leader Gazette reported Oct. 2. John Kennedy, MD, head of the New York City-based system's foot and ankle divi- sion of orthopedic surger y, was accused of threatening and harassing Susanne Shaf- meister, the surgeon's former office manag- er who he began dating more than 10 years before she became operations manager at his private practice, according to court documents. But attorneys for Dr. Kennedy filed a coun- tersuit that alleged Ms. Shafmeister made up her claims after she was confronted for allegedly embezzling more than $200,000 from his practice. In November 2019, Ms. Schafmeister was arrested on grand larceny charges for writ- ing a $12,000 bonus check to herself from Dr. Kennedy's private practice. In the law- suit, she said Dr. Kennedy told her to issue the check and then filed a complaint stat- ing she did not have permission to do so. Ms. Schafmeister denies those allegations as well as allegations that she embezzled more than $200,000 from the practice. In June, Ms. Schafmeister pleaded guilty to petit larceny and agreed to pay $2,000 res- titution to Dr. Kennedy. A judge in August dismissed her lawsuit against the surgeon, according to the report. n Physician noncompete disputes continue, but Biden administration wants them exiled By Alan Condon P hysician noncompete contracts are a common but sometimes con- tentious issue in the healthcare industry as they have the potential to disrupt the physician-patient relationship and remove physicians — who are already in short supply — from the workforce. President Joe Biden on July 9 signed an executive order encouraging the Federal Trade Commission to limit or ban noncompete agreements. For the healthcare industry, the move would likely facilitate physicians leaving hospital employment for ASC ownership in the same community, but could increase competition between ASCs to attract and retain talent as they wouldn't be able to enforce their own noncompete agreements. Here are four key noncompete disputes that made headlines in 2021: 1. Washington State vs. Bellingham Anesthesia Associates: The state of Washington filed an antitrust consent decree in August against Bellingham (Wa.) Anesthesia Associates, urging the group to end allegedly illegal noncom- pete contracts and pay $110,000 to the state. The state claims that the 50-phy- sician group used illegal noncompete clauses and exclusive contracts with local providers to take about 90 percent of the market share for physician-admin- istered anesthesia services in two Washington counties, allegedly in violation of the Washington Consumer Protection Act. If approved, the consent decree would require Bellingham Anesthesia Associates to stop illegally requiring phy- sicians to sign three-year noncompete contracts. The group would be able to keep exclusive contracts with hospitals that need anesthesiologists on constant standby, but it would be required to cancel contracts with providers that do not need emergency coverage, such as ASCs and medical clinics. 2. St. Louis Heart and Vascular vs. SSM Health (St. Louis): St. Louis Heart and Vascular is seeking $50 million in damages from SSM Health after it sued the St. Louis-based system to prevent it from entering into an exclusive con- tract with another cardiology provider. The lawsuit argues that the contract would limit St. Louis Heart and Vascular's ability "to compete for and treat adult cardiac patients" because it would no longer have privileges at SSM hospitals. SSM said the contract would improve care and business practices. 3. Gastroenterologists vs. TriHealth (Cincinnati): TriHealth sued to enforce a noncompete clause for 18 gastroenterologists aiming to leave the Cincinna- ti-based system in June. The noncompete clauses prevent the physicians from practicing in the area for one year after leaving TriHealth, unless 75 percent (18 physicians) of the department exits together, among other provisions. Seven- teen gastroenterologists told TriHealth of plans to exit contracts on June 28, and another gastroenterologist changed his retirement date from June 30 to June 28. TriHealth sued the physicians to enact the noncompete clause, and ar- gues that the 18th gastroenterologist's retirement date should not be included in the number of gastroenterologists required to avoid the clause. 4. Family practice physicians vs. CaroMont Health (Gastonia, N.C.): Seven physicians who sued CaroMont Health in 2019 over a noncompete clause in their employment contracts voluntarily dismissed their suit in May. The physicians left CaroMont's South Point Family Practice in 2019 to join Tryon Medical Partners, a physician practice launched in 2018 by nearly 100 physicians formerly employed by Charlotte, N.C.-based Atrium Health. Car- oMont requested the seven physicians pay $1.8 million to be released from their noncompetes. The physicians sued to avoid payment, arguing that their noncompetes only prevented them from joining a competing health system within 20 miles of CaroMont, and Tryon is not a hospital or health system. The two parties reached a settlement to resolve the dispute. n

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