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Tennessee physicians win $58 million judgment against Wellmont Health


A physician independent practice association in Tennessee has won a $58 million class-action judgment against Wellmont Health System based on allegations that the system tried to undermine the IPA and signed payer contracts outside the physician network.

Highlands Physicians, a 1,500-physician group based in Kingsport, Tenn., won the verdict Tuesday following a 13-day jury trial in Sullivan County Law Court in Bristol, Tenn. The jury did not award any punitive damages, which the plaintiff had requested.

Highlands declined to comment. Wellmont, which merged with another system earlier this year to form 21-hospital Ballad Health, said it plans to appeal the ruling based on what it said are a number of errors and other issues that occurred during the trial. Ballad serves northeast Tennessee and southwest Virgina.

“Wellmont is disappointed by the decision because Wellmont believes that it acted appropriately regarding the operations of Highlands Wellmont Health Network in serving patients and employers in our communities,” the system said in a written statement.

The suit, filed in 2016, alleged that Wellmont breached the physician hospital organization contract signed in 1993 by Highlands and Bristol Hospital, Wellmont’s predecessor in the relationshiop. The PHO is half owned by each entity.

The suit also claimed Wellmont lied and defamed Highlands, engaged in tortious interference with business contracts, and engaged in intentional misrepresentation and fraudulent concealment that caused Highlands to suffer damages.

It said the relationship between Highlands and Wellmont started to deteriorate around 2011, with Wellmont leaders taking an adversarial position toward Highlands physicians who were not employed by Wellmont.

According to the suit, Wellmont began to deliberately undermine Highlands, dismantle the network, and reduce resources for maintaining clinical integration. Highlands claimed Wellmont diverted major contracts with Humana’s Medicare Advantage plan in 2012 and with Cigna in 2014 from the PHO network to Wellmont, telling Cigna that Highlands network was not sufficiently clinically integrated.

Sullivan County Chancery Court Judge E.G. Moody granted class-action status in the case last year. Wellmont unsuccessfully appealed that decision to the Tennessee Supreme Court.