A physicians group has sued Montefiore St. Luke’s Cornwall for $21 million for allegedly breaking a deal to use its doctors at the Newburgh hospital.
Mid-Hudson Anesthesiologists P.C., of Newburgh, accused Montefiore of breaches of contract and misappropriation of trade secrets, in a complaint filed on June 21 in U.S. District Court, White Plains.
“Rather than employ ‘best efforts’ to maintain their relationship with MHA [Mid-Hudson],” the complaint states, “defendants employed rapacious efforts to destroy MHA relying upon misappropriated financial data obtained under false pretenses.”
In response to a request for Montefiore’s side of the story, spokesperson Kate Dabroski said the hospital “does not provide information on litigation.”
MHA’s complaint is heavily redacted, obscuring many of the details. But the gist of the case is that the anesthesiologists had an exclusive deal to staff the hospital and could not provide their services to other hospitals.
In 2020, about a year before the deal was to expire, MHA provided sensitive financial information that St. Luke’s requested, according to the complaint. Meanwhile, St. Luke’s was secretly negotiating with MHA competitor, Envision Healthcare.
On June 14, 2021, St. Luke’s chief medical officer, Gina Del Savio, allegedly told MHA leaders Dr. Kal Shukla and Dr. Russell Marwin that they must join the Envision group as individual employees.
MHA is not just a mere collection of doctors, the complaint states. It also enables partners to build equity.
But MHA’s exclusive arrangement with St. Luke’s barred it from shopping its services to five hospitals within 20 miles of St. Luke’s. In two months, according to the complaint, two-thirds of its members left.
“Defendants knew that they were functionally destroying MHA, rendering it noncompetitive for any alternative contracts and depleting it of virtually all of its equity by draining its human capital.”
In June 2021, St. Luke’s cancelled negotiations with Envision, the complaint states, and contracted with Montefiore’s Faculty Practice Group to provide anesthesia services.
St. Luke’s officials then allegedly “used their extreme leverage against MHA to attempt to bully is physicians into becoming direct employees” of St. Luke’s.
Only one MHA physician agreed to switch to St. Luke’s, according to the complaint, and the rest have scattered throughout the Hudson Valley.
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