health services

Steward sues Blue Cross over failed Landmark bid

STEWARD HEALTH CARE filed a suit in Superior Court this week against Blue Cross & Blue Shield of Rhode Island over the for-profit hospital network's bid on Landmark Medical Center.
Posted 5/2/13

PROVIDENCE – Steward Health Care, the for-profit hospital network based in Boston, filed suit in Superior Court on May 1 against Blue Cross & Blue Shield of Rhode Island, alleging that the health insurer engaged in “unlawful attempted and actual monopolization of the market” caused the failure of Steward’s bid to purchase Landmark Medical Center.

The suit asks for “treble damages” for the alleged antitrust violations and compensatory damages for alleged “tortious” interference with Steward’s contractual and prospective contractual relations.

Steward has asked for a jury trial.

The 37-page complaint revisits the contentious four months before Steward withdrew from its purchase of Landmark on Sept. 27, 2012.

During that time, negotiations between Blue Cross and Steward hosted by R.I. Attorney General Peter F. Kilmartin broke down in an exchange of acrimonious letters that were later leaked to the news media.

In addition, Steward launched, in conjunction with Landmark, an aggressive media campaign targeting Blue Cross in Rhode Island media markets.

Among the alleged claims against Blue Cross, Steward’s brief said that as a direct result Blue Cross’s “violation of Section 6-36-5 of the Rhode Island Antitrust Act, Steward has suffered injury to its business and property and damages in an amount to be proven at trial.”

“We are pursuing legal action because Blue Cross’s actions were harmful to us.” Christopher Murphy, spokesman for Steward, told Providence Business News. “We are not interested in growth opportunities in Rhode Island unless Blue Cross’s changes their monopolistic behavior.”

Blue Cross said that it would vigorously defend the suit. “At a time when Rhode Island is focused on assuring access to quality health care for all residents, lowering costs and increasing collaboration in the provider community, Blue Cross is disappointed with Steward’s decision to file a lawsuit,” said Michele Lederberg, Blue Cross’s chief administrative officer and general counsel, in a statement issued on May 2. “We will vigorously defend this suit and we are confident it will be resolved in our favor,” she said.

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