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Cooper Clinic sues Mercy Fort Smith, Mercy doctors

story by Michael Tilley
mtilley@thecitywire.com

A lawsuit filed Aug. 2 by Fort Smith-based Cooper Clinic against Mercy Fort Smith and St. Louis-based Sisters of Mercy Health System not only more fully reveals a contentious relationship between former medical sector partners, it may signal an end to the hospital-clinic relationships that have been part of area medicine for almost a century.

In the 17-page complaint filed in Sebastian County Circuit Court, Cooper Clinic officials allege that Mercy and its parent company used their economic power to recruit 15 physicians away from Cooper and to the Mercy Clinic between Oct. 31, 2010 and Aug. 1, 2013.

The physicians who left Cooper Clinic are (in order of departure): Ivelesse Dupree; Merle McClain; Tony Flippin; Douglas Buckley; John Smith; Garreth Carrick; Lane Wilson; David Hunton; Kurt Mehl; Donald Shows; Chris Coleman; Greg Pineau; Robert Nowlin; Jennifer Burks; and John Werner.

Cooper’s complaint also includes Drs. Burks, Nowlin, Shows and Werner as defendants.

“Some or all of the above physicians were contacted prior to the expiration of their contracts with Cooper and actively recruited to come to work for Mercy Entities, notwithstanding the existing contractual obligations between Cooper and said physicians which were known to the Mercy Entities,” notes the Cooper complaint.

The complaint alleges that the loss of physicians “created problems in serving patients” in primary care and several specialties, which “caused harm to Cooper’s financial condition.” By recruiting Cooper physicians, Cooper Clinic officials also allege that Mercy and its parent company “were attempting to economically harm Cooper and punish it for not selling its business to Mercy Entities.”

MERCY RESPONSE
In a response to questions from The City Wire, Mercy on Tuesday provided this statement: “Mercy has been served with a summons and a complaint filed against it by Cooper Clinic. Those documents have been referred to our counsel for an evaluation and a response. It is our belief that Mercy has done nothing wrong or illegal and will defend itself vigorously against the allegations made by Cooper Clinic in the complaint.”

In a Dec. 8, 2010 letter, Doug Babb, CEO of Cooper Clinic, asked Jeff Johnston, then the CEO of what is now Mercy Fort Smith, to “refrain from further negotiations with Cooper Clinic physicians under executory employment agreements.” The letter also said Cooper preferred to work with Mercy but would not shy away from legal action if necessary.

Babb sent a letter to Johnston on Jan. 21, 2011, to again ask Mercy to stop recruiting its physicians.

“While I appreciated your kind words and warm Christmas wishes in your December 21, 2010 letter, you and your staff nevertheless are continuing to attempt to get at least six more Cooper Clinic physicians to break their employment contracts notwithstanding my request that you stop this anticompetitive practice,” Babb wrote.

POSSIBLE MERGER WITH MERCY, SPARKS
The complaint also reveals that Cooper negotiated with Mercy and with Sparks Health System – and its parent company, Naples, Fla.-based Health Management Associates –   about a possible merger, acquisition or “integration” with Cooper physicians.

In a July 25 letter from Mercy (Kim Day, president of Mercy Central Communities; Ryan Gehrig, president of Mercy Hospital Fort Smith; and Dr. Cole Goodman, president of Mercy Clinic Fort Smith) to Babb and Dr. Michael Callaway, chairman of the Cooper Clinic Board of Directors, Mercy offered to “stand still” on negotiations with Cooper Clinic physicians if Cooper would not continue “further discussions with Sparks, HMA, equity investors” or any other group that would create a “Competing Transaction” to Mercy.

Babb responded July 30 with a letter noting that Cooper officials interpreted the Mercy letter as “both a threat and ultimatum” that if Cooper did not accept the terms then more physicians would be lost to Mercy.

“Please be informed that the Clinic has retained counsel to seek redress from this continued pattern of intentionally and tortiously interfering with our physician employment agreements and engaging in anticompetitive and predatory business practices,” Babb concluded in his July 30 response letter.

Cooper’s lawsuit seeks compensatory and punitive damages under six counts: Breach of Contract; Tortious Interference; Violation of Arkansas Deceptive Trade Practices Act; Unjust Enrichment; Civil Conspiracy; and Breach of Contract-Compensation Reimbursement.

COOPER CLINIC STATEMENT
In a response to questions from The City Wire, officials at Cooper Clinic provided this statement:
“While it would be inappropriate to comment outside of court regarding the specifics of this lawsuit, we can provide a brief summary of the actions that led us to seek legal recourse. Locally owned by our doctors since 1920, Cooper Clinic is important to the health of our patients as well as the strength of our community; however, our Clinic is being threatened by Mercy’s continued recruiting of our physicians. Repeatedly, Mercy has negotiated with physicians who are under contract with Cooper Clinic, leading doctors to terminate their employment agreements and join Mercy to accept financial incentives. Despite our requests that these actions cease, Mercy’s actions have continued. This has negatively impacted Cooper Clinic and been disruptive to patient care. Cooper Clinic has been a vital part of our local medical community for more than 90 years. It is crucial that we protect our organization against these practices to secure our independence and our future.”

FIRST HINTS OF TROUBLE
Although well known for several years in regional medical circles, the schism between Cooper Clinic and Mercy bubbled up to the public in early 2012.

Prior to 2012, physicians with Fort Smith-based Cooper Clinic have for decades had privileges only at St. Edward Mercy Medical Center (now Mercy) – part of a two-hospital town dynamic that often saw clinics affiliated entirely with St. Edward or Sparks Health System.

However, a Jan. 31, 2012 letter from Cooper Clinic Drs. Dale Asbury and Jeffrey Medlock informed patients that physicians with Eastside Family Practice are now making rounds at Sparks.

“Whenever possible, we would prefer that our patients who must be hospitalized choose Sparks Regional Medical Center so we can oversee your hospital care,” the two physicians noted in the letter.

Babb said at the time that the letter from Drs. Asbury and Medlock is “information for a specific group of patients and does not reflect a Clinic-wide shift from service at one hospital to the other.” However, Babb noted then in a letter to The City Wire that “this is a shift in the way our doctors have practiced traditionally.”

In a Sept. 7, 2012 address during a Fort Smith Regional Chamber of Commerce event, Babb said the historically pleasant relationship between Cooper and Mercy had become “tense.”

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“Cooper Clinic and Mercy, in the 1990s, were very much quasi-partners, and very much working closely with each other, but that’s evolved over time,” Babb said at the chamber event. “The main reason is that HMA and Mercy have different system strategies. HMA wants to work with independent physicians, while Mercy has chosen, and this is not to be critical, to have integrated physicians. In other words, they want physicians to be employees, and that creates tension. ... We have been forced to work with Sparks and be as independent as we can, and not to rely just on Mercy. So that relationship has evolved from a partnership to actual competition.”

MERCY EXPANSION
Mercy officials have not been shy about their plans to expand facilities, services and add physicians in the Fort Smith market.

Officials with the St. Louis-based Sisters of Mercy announced in August 2011 a plan to invest about $192 million in Mercy facilities in the Fort Smith region as part of a 10-year plan to invest $4.8 billion in its operations in Arkansas, Kansas, Missouri and Oklahoma.

“Assuming Mercy’s growth in spending and wages increases at a modest 2% annually over the next 10 years, Mercy will generate almost $3.5 billion in total economic benefits for the city during this time period,” noted the executive summary of a Mercy impact report released in October 2012.

Part of that impact includes the hospital’s continued recruitment of new doctors. Goodman, the Mercy Clinic CEO, said in October 2010 that the clinic plans to add 80 new physicians in the next three to five years, with at least 50 of those being specialists. Those doctors will require a support staff of about 280, which will result in added annual payroll of about $19.7 million.

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Comments

I am glad that Cooper clinic

I am glad that Cooper clinic finally stood up to Mercy Corporation that has an agenda of destroying a local business like Cooper that has been here for almost a century. If Mercy really is interested in improving access like they ask, they should not take physicians and their practices and patients away from Cooper and others. Mercy is all about buying and controlling physicians for the benefit of their board and shareholders. There is a growing number of physicians who were bought by hospitals across the nation that are unhappy and wanting to go back to be independent. Care is also significantly more expensive at the hospital and Medicare now is cracking on that as hospitals are benefiting and overcharging patients and insurance companies and Medicare with their facility fees.

Concerned Patient

Personally I am very relieved and proud of the steps Cooper Clinic is taking to declare their independence and seeking justice. The ongoing coercion has negativly impacted EVERYONE associated with their healthcare facility. I can't begin to tell you how the constant transfer of physcians have effected my entire family. For many, including myself, it is already unsettling enough to see a healthcare provider. When my primary care physican or specialist locations and staff become unfamilar to me I feel insecure more so. I can only imagine the impact it has left on Cooper Clinics employees. God willing the matter will be resolved soon.

I agree with you completely.

I agree with you completely. This has been my experience as well.

Cooper Nonsense

The last time I checked we, as human beings, have a free right to work any place that we choose. If Mercy wants to pay those doctors more them so be it. Maybe Cooper Clinic needs to wake up realize why most of their great doctors left to begin with. This is a lawsuit that will hopefully get tossed out of court. What a joke!

A comment full of mistakes.

A comment full of mistakes. Most of Cooper physicians are still with Cooper, fifteen left from almost one hundred. Go check your reference. People are free but if they breach their signed contracts, they are expected to face consequences; this is the law if you care to pay attention. Mercy threatening and intimidating others is not a joke, Sir.

The REAL Cooper Clinic

Incorrect facts, sir, again. Everyone needs to stick to facts. In 2006, Cooper Clinic had 131 doctors. In that year, they broke good faith operating agreements in making massive changes to physician compensation agreements which resulted in near lawsuits at that point. The organization nearly folded under. They are down to 77 doctors if you'll check. Mercy's hired what 15 according to article?? What happened to the others that left?. Almost cut in half. When they changed the physician compensation, according to my primary doctor, it made operating as a non-procedural physician almost impossible within the Clinic (except for doctors that order MRIs for a stubbed big toe, which the make wild profits on). They're down to 77 doctors and sinking fast not because of Mercy, or Sparks, or HMA, or the bogeyman, but because it's an expensive and inefficient place to practice for the docs. And to expect my doctor to leave Fort Smith as opposed to staying in Fort Smith and work as an independent or as an employed doctor violates the Cooper contract, then maybe there's a problem with the execution of the contract on the part of the Cooper management. For crying out loud, my doc's partner was mowing the lawn outside their clinic because they want to save on overhead. While laudable, it's a laughable example of the Cooper management...that they expect the primary docs to mow the grass and don't break their precious contract as opposed to suing Cooper themselves for breach. Mow away, doc...mow away...

You're an idiot to believe

You're an idiot to believe half of what you wrote. Cooper Docs are not mowing grass to "save money". That's just ridiculous.

Truth

Actually, he's not an idiot for believing that some doctors are mowing the grass to save on overhead. You’re right – it sounds ridiculous, but it’s true. As a matter of fact, some of the doctors who are/have left Cooper had to file bankruptcy, pick up 2 and 3 additional jobs, etc. Would you like to work for free? Mercy is not recruiting these physicians. These physicians are begging for help from Mercy and Mercy is helping them. Don’t believe me? Let the numbers speak for themselves – 131 doctors, and now down to 77? There must be some reason they are leaving.

Cry cry cry

I don't have much sympathy. When you pull their bankruptcy filings and have people making 6 figures plus even with the student loan excuse their income isn't the problem. So mowing the lawn and declaring bankruptcy are symptoms of their own spending problems of their own making. Remember as well that paying them more doesn't make them better, we spend a greater amount of our GDP on health and have abysmal infant mortality and subpar rates in all other health metrics. I am not going to cry a river because some 1% er has to mow his yard to make his helicopter payment.

I respectfully disagree. You

I respectfully disagree. You can work wherever you want if you do not break the contracts you signed. What is the point of having contracts then?! It is even worse when doctors who are entrusted with human lives break contracts and their words and commitments for money.

“Some or all of the above

“Some or all of the above physicians were contacted prior to the expiration of their contracts with Cooper and actively recruited to come to work for Mercy Entities, notwithstanding the EXISTING CONTRACTUAL OBLIGATIONS between Cooper and said physicians which were known to the Mercy Entities

Cooper Lawsuit

Anyone who has paid attention to the medical industry in the Fort Smith Region has noticed the failings of Mercy in the last decade. Cooper Clinic and the two HMA properties have been more progressive and have an upward trajectory when referring to patient care, value, and employee satisfaction. I think that Mercy started trending down when they moved a lot of decision making to St Louis rather than keeping it in Fort Smith. The Mercy staff kept telling me that its not the same as it used to be. Just because you build a fancy building doesn't mean that you give great care and treat your staff with respect. Two philosophies that, I believe, Mercy could learn from Cooper.

Go Cooper

Mercy is enticing the Cooper physicians and offering them a 5 year guaranteed compensation package. And, if those physicians leave Cooper for Mercy... then it's all about the money. Not the care of their patients. It is very difficult for patient's when their physicians hop from location to location, because they think the grass is greener. If Mercy keeps throwing money away at doctors that just want a paycheck and don't care about their patients... who's going to be in trouble then? Cooper is going to be OK, there are new physicians that will be starting there soon. I think patient's will see there way back to Cooper!

Who knew?

Who would have believed that Sparks would start looking better as Cooper looks worse?

Worse?

I am sure you misspoke when you described Cooper as looking worse. I don't believe this lawsuit makes Cooper Clinic look worse in any way, shape, or form. They still have 70+ fabulous, caring physicians, who haven't flown the coop for love of money. They also have a CEO who cares about this entire community and its future (check his busy schedule as he and his wife volunteer and serve this city). Cooper Clinic also has dedicated employees, who are proud to be a part of this clinic. This is a "regional" clinic, serving Arkansas and Oklahoma well and I believe will continue to do so for another 90 years.

All sides to the story

While there are many sides to the story by which to be confused, it is the patient who is at risk the most amidst the uncertainties. The patients are not privy to what goes on behind closed doors and under the table. It is simply making people nervous as quality gives way to financial pressures. No doubt there are dedicated physicians at Cooper. Cooper has been my choice for years. But things change and not always for the better.