A Medical Device Daily

A group of 21 physicians has filed amendments to a suit against the Arnett Clinic (Lafayette, Indiana) – for which they previously worked and were shareholders – charging that the organization required them to sign employment contracts that gave Arnett “substantial [illegal] power” over them, amounting to a “shake-down.”

Those contracts, the original suit alleges, required forfeiture of the doctors’ clinic ownership interests once their employment with it ended and prohibited them from practicing medicine in Arnett’s “exclusive territory” for two years unless they promised to pay a kickback of two years’ salary.

Arnett Clinic in February filed a countersuit against the physicians, who are now members of Greater Lafayette Health Services (GLHS), charging anticompetitive acts. Specifically, it alleges that GLHS had promised to develop an ambulatory surgery center (ASC) in conjunction with Arnett, but that it reneged on this promise. And Arnett said that it was proceeding to develop an ASC on its own.

The physicians’ group recently added amendments alleging civil racketeering and federal healthcare fraud by Arnett.

The lawsuit says that Arnett Clinic considers its “exclusive territory” to be the eight-county region of Benton, Carroll, Clinton, Fountain, Montgomery, Tippecanoe, Warren and White counties, serving 300,000 patients and an area considered medically underserved by the Indiana State Department of Health.

“These allegations of civil racketeering are very serious and we respect the careful consideration [the judge] is giving our request to add these additional claims,” said Paul Black, an attorney with McMains Morse, representing the physician group.

The plaintiffs also have requested more time, needed as the result of alleged delaying tactics on the part of the defendants, and have filed a motion asking the court to order the defendants to produce requested documents

The court has set a May 17 hearing for another motion filed under seal by attorneys for the doctors relating to the status of confidential documents in the areas of cardiac treatment, radiation oncology and maternity.