AmSurg sues bolting docs

Company claims Florida physician group left to create rival facility despite non-compete agreement

Email | Print By Walker Duncan

Many surgery center operators have found success partnering with physician groups in owning and managing facilities. The setup has proven to work well – at least until the physician group decides to bolt and set up its own competing center nearby.

Such appears to be the case in a dispute involving local surgery center outfit AmSurg.

A complaint filed at the end of March in Davidson County Chancery Court claims that a group of Florida docs, who partnered with AmSurg to roughly 10 years ago have, with the aid of some clever dealing, managed to leave and create a rival business.

In 1998, AmSurg paid a group of doctors, Endoscopy Center Naples, almost $4.5 million for a 60-percent interest in an ambulatory surgery center in Naples, Fla. As part of that deal, the company and shareholder doctors of ECN formed a Tennessee partnership with AmSurg (Ticker: AMSG) as general partner and ECN as the sole limited partner.

Included in that agreement was a non-compete clause preventing ECN and its shareholders from “developing, directly or indirectly owning, or otherwise having any financial interest in an entity that competes with [the partnership] within 25 miles of the center” until one year after ECN left the partnership or, for the docs, one year after they sold their stake in ECN.

According to the complaint, however, the docs sold out over the last couple of years through a somewhat convoluted series of transactions in an effort, AmSurg claims, to keep receiving profits from ECN while circumventing the non-compete and setting up their own competing facility.

In November of last year, Premier Endoscopy Center, organized by one of the former ECN doctors, was licensed as an ambulatory surgery center by the Florida Agency for Health Care Administration. AmSurg claims that at least some of the other doctors aided in the planning and development of the center. By January of this year, the ECN shareholders had stopped performing procedures at the ECN facility, having moved over to Premier.

AmSurg is asking for compensatory damages of an amount to be proven in court along with punitive damages. Representing the company in the matter are Bass Berry & Sims attorneys Michael Dagley and Russell Baldwin. Neither could be reached before publication.