7 Crystal Run Healthcare physician owners refuse to sign on Montefiore acquisition, say it makes them 'indentured servants': 5 things to know

Written by Laura Dyrda | December 26, 2017 | Print  |

Middletown, N.Y.-based Crystal Run Healthcare is expected to finalize a merger with Bronx, N.Y.-based Montefiore Medical Center, but seven physician owners have refused to accept the terms of the agreement and filed two lawsuits against the medical group, according to the Times Herald-Record.

Here are five things to know:

1. Crystal Run includes 133 physician partners, seven of which refused to sign the required documents for the group to merge with Montefiore Medical Center. The physician owners first learned of the merger in 2016, and the seven who haven't signed the deal say it isn't in their best interest.

2. According to a lawsuit filed Dec. 5, Lissette Giraud, MD, claims she voiced opposition to the deal and experienced retaliation as a result. She asked for additional information and documents on the proposed merger and was subsequently removed from the Crystal Run Ambulatory Surgery Center of Middletown (N.Y.) board of directors; Dr. Giraud also reported the group relieved her of management duties.

In a second lawsuit filed last week, six other physicians made similar claims against Crystal Run, arguing the merger would dissolve the organization's partnership. As a result, they are seeking:

● Funds remaining in their capital accounts
● 85 percent of residual collections for pending insurance payments
● Shares of Crystal Run's other assets

The physicians say they have not been given access to financial records associated with the partnership and were only able to estimate the amount in their accounts. The surgeons likened this deal to becoming "indentured servants" of Montefiore.

3. Plaintiffs in the second case report voicing objections over terms of the merger, which require them to refer patients to Montefiore facilities "even if they felt another provider could better serve a particular patient," according to the report. The physicians claim after voicing objections to the merger, Crystal Run began recommending their patients see other physicians, often less experienced junior physicians.

4. The second lawsuit states Crystal Run's CEO sent an email on Dec. 15 threatening non-signing partners could face a lawsuit and payment to those partners would be on a pro rata basis. He also told them if their refusal to sign led to the deal being dissolved, signing partners could lose "tens of millions" in transaction proceeds and working capital.

5. In the deal, Montefiore planned to purchase 33 percent interest In Crystal Run and place $30 million into a shared account with the organization to form the joint venture.

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