Group seeks court order to stop Atrium from using new anesthesiologists July 1

Atrium Health CEO talks about dispute with anesthesiologists

Gene Woods, Atrium Health CEO,tells his side of the ongoing dispute.
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Gene Woods, Atrium Health CEO,tells his side of the ongoing dispute.

Atrium Health has been planning July 1 as the start date for a new provider of anesthesiologists at many of its Charlotte-area hospitals, after replacing a long-time supplier whose contract Atrium did not renew.

Now the former provider is trying to stop that from happening.

A filing made late Friday in North Carolina Business Court seeks a temporary restraining order and injunction to prevent the new vendor from working for Atrium. The filing was made by the former supplier, Charlotte-based Southeast Anesthesiology Consultants, and associated companies that are also impacted by Atrium's move to the new vendor.

An announcement this year by Atrium not to renew a contract with Southeast has sparked what's become an increasingly nasty public battle between the two Charlotte-based companies. Atrium's decision ends a nearly 40-year relationship with Southeast, which supplies about 90 anesthesiologists to the hospital system.

Atrium has accused the Florida-based company that acquired Southeast in 2010 of rejecting suggested steps that would lower anesthesiology costs while maintaining the same level of patient care. Atrium has cited that as among the reasons for its switch to Scope Anesthesia of North Carolina — founded this year by a consultant Atrium brought on in 2017 to analyze its anesthesiology services.

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Florida's Mednax and Southeast, which both sued Atrium in March over the lost contract, have accused Scope founder Dr. Thomas Wherry of stealing Southeast's trade secrets in order to launch his competing firm and win the contract.

In their filing Friday, Mednax and Southeast now accuse Atrium and Wherry of trying to recruit Southeast's anesthesiologists.

Such discussions violate agreements between Southeast and Atrium that bar the soliciting or hiring of Southeast physicians, according to the filing, which asks the court to make Atrium and Wherry stop. The filing also asks the court to ban Wherry's firm from providing anesthesiology services for Atrium while the litigation works through court.

In a statement, Atrium accused Mednax of filing "yet another meritless legal attack" and reiterated previous comments that Mednax is trying to bully it into entering a new contract.

"Regardless of these last-ditch attempts by Mednax asking the court to intervene, Mednax will not be providing any anesthesia services in Atrium Health facilities past June 30, and nothing about this court filing changes that," Atrium said.

Both sides have engaged in a weeks-long media campaign, with advertisements that have become increasingly pointed — a rare development in an industry where vendor changes don't explode into public spats.

Full-page newspaper ads by Southeast have accused Atrium of making radical changes to anesthesia care that could seriously jeopardize patient safety. One ad notes that Atrium's switch means starting July 1 a new group of anesthesiologists will come into operating rooms having never worked together. "What could possibly go wrong?" the ads ask.

Wherry, in a statement, called Friday's night court filing "nothing short of bizarre."

"Scope has no plans to hire any of the Mednax doctors at this juncture," said Wherry, who completed his anesthesiology residency at Johns Hopkins Hospital. "Come July 1, our team of experienced and highly qualified doctors will be staffing the operating rooms based on the needs of the surgery teams and our patients."

Atrium, which has countersued Mednax and Southeast for defamation, calls the advertisements part of a smear campaign bent on spreading falsehoods.

This weekend, Atrium began running in the Observer an open letter to the community in which board Chairman Ed Brown lauded the experience of the anesthesiologists seeking to work for Wherry. Brown said Atrium will never compromise quality and safety, and he criticized Mednax for running an "unethical fear-based" campaign, which he also called desperate.

"Our Atrium Health board members are now being contacted with veiled threats in an attempt to force us to agree to things that are not in the best interest of Atrium Health, since Mednax is facing a substantial loss of business," the letter says. "The board stands united in condemning Mednax's conduct and will continue to support Atrium Health to defend against Mednax's malicious and baseless attacks."

It's not the only high-profile fight Atrium has been involved in with doctors this year.

In April, about 90 physicians in Atrium's Mecklenburg Medical Group practice sued the system to free themselves of non-compete agreements so they could break away and open an independent practice. The physicians accused Atrium of monopolistic and anti-competitive behavior, including ordering doctors to refer patients to Atrium facilities.

Atrium has said it will grant the doctors' request by ending employment agreements with them on Sept. 1.

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