Washington Attorney General Bob Ferguson today filed a federal lawsuit against Tacoma-based CHI Franciscan Health and two physician practices in Kitsap County, claiming they have deliberately decreased competition and raised prices.
In July 2016, CHI Franciscan acquired the assets of WestSound Orthopaedics, a practice of seven orthopedic physicians based in Silverdale. Two months later, it announced an affiliation with The Doctors Clinic, a multi-specialty practice with more than 50 physicians, which has seven locations throughout Kitsap County.
The WestSound acquisition, along with the affiliation with TDC, combined the three largest providers of orthopedic physician services in the Kitsap region, greatly reducing choices for local consumers seeking such services close to home.
In the lawsuit, filed in U.S. District Court for the Western District of Washington, the state alleges that both transactions violate state and federal antitrust laws.
In announcing the transactions last year, CHI Franciscan and TDC touted them as “an exciting direction for Kitsap County residents and families,” claiming they would “enhance patient access and efficiency.”
Today’s AG news release announcing the lawsuit said CHI Franciscan has netted well over $1 million in ill-gotten gains so far because of these Kitsap transactions.
“These transactions were intentionally made to decrease competition, increase prices, and pad CHI Franciscan’s bottom line at the expense of its patients,” Ferguson said.
The state asks the court to unwind the deals and prevent their recurrence. The complaint also asks the court to order the defendants to pay back the ill-gotten gains of the price-fixing agreement between CHI Franciscan and TDC, as well as pay civil penalties and the state's costs and fees.