50-physician anesthesia group must end allegedly illegal noncompete contracts, pay $110K: Washington AG

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The state of Washington filed an antitrust consent decree Aug. 25 against Bellingham (Wa.) Anesthesia Associates, urging the group to end allegedly illegal noncompete contracts and pay $110,000 to the state.

The consent decree claims that the 50-physician group used illegal noncompete clauses and exclusive contracts with local providers to take about 90 percent of the market share for physician-administered anesthesia services in Washington's Whatcom and Skagit counties, allegedly in violation of the Washington Consumer Protection Act.

Over the last two decades, Bellingham Anesthesia Associates used exclusive contracts with hospitals and clinics to become the "de facto anesthesia provider" in the two counties, according to an Aug. 26 news release.

The group also allegedly coerced its physicians — many of whom are shareholders — to sign noncompete clauses that prohibited them from practicing anesthesia in the area for three years. Physicians who did not own shares in the group had 18-month noncompetes.

The consent decree claims that Bellingham Anesthesia Associates' alleged monopoly limited the choices medical facilities and surgeons could make, as well as the options for patients. By controlling the local market, the group did not have to compete to provide improved services, offer more services or reduce its prices, according to state Attorney General Bob Ferguson.

The antitrust consent decree, if approved by the Whatcom County Superior Court, would require the group to stop illegally requiring physicians to sign three-year noncompete contracts.

The consent decree also would limit Bellingham Anesthesia Associates' employees' noncompete time to nine months and shareholders' noncompete time to one year. 

If a judge approves the agreement, the group would be able to keep exclusive contracts with hospitals that need anesthesiologists on constant standby, but it would be required to cancel contracts with ASCs, medical clinics and other providers that do not need emergency coverage.

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