How hospitals are fighting to keep their former doctors from seeing patients

How hospitals are fighting to keep their former doctors from seeing patients

David Lankford, an Indiana pediatrician who specializes in treating critically ill children, says he decided to leave his job at Lutheran Hospital in Fort Wayne after it laid off a group of pediatricians, causing the number of patients he was seeing to increase more than fourfold.

But when Lankford took a job last year at nearby Parkview Health, his new employer was threatened with a lawsuit by his former employer, who alleged he had violated a noncompete clause in his contract, according to court records. Now, he’s months into a legal battle over whether he can continue taking care of patients in Fort Wayne.

“There is a shortage of physicians who do the subspecialty work that I do in Fort Wayne,” said Lankford in a written response to questions. “I believe many critically ill children and their families would have to travel significant distances at significant hardship to get access to care.”

Lankford is among a handful of doctors who are fighting back in court against the increasing prevalence of noncompete agreements, which often prevent a doctor from seeing patients for one to two years within a geographic region if they are fired or quit their job. While employers say the agreements are necessary to protect the investment they make in recruiting, marketing and supporting their doctors, physicians argue the provisions can harm patients by restricting access to care and risk discouraging doctors from speaking out about unsafe or unethical conditions.

“We have seen these noncompetes increase exponentially over the last several years, and it really goes against the very ethos of medicine,” said Omar Atiq, president of the American College of Physicians. “It takes awhile for physicians to start really knowing their patient, not just the disease for which they come but the patient themselves, and to just sever that relationship is a big blow.”

Once viewed as a restriction reserved for high-level executives or workers with access to trade secrets, noncompete agreements have become pervasive across a range of industries, from health care to fast food chains, limiting the employment opportunities of more than 30 million workers, according to the Federal Trade Commission. President Joe Biden pledged in his State of the Union address in 2023 to ban noncompetes across the economy, and the FTC is on track to make a final decision about a proposed ban early this year, said a Biden administration official.

Among doctors, the agreements have become standard practice in many areas, with one survey by researchers at Ohio State University finding nearly half of primary care physicians in group practices and more than a third of physicians employed at hospitals or free-standing clinics were bound by a noncompete agreement. The prevalence of noncompete agreements has increased as more doctors are now employed by hospitals or large health systems, which have been steadily buying up group medical practices, said Atiq. For patients, the practice can result in an abrupt disruption of care with no explanation of where their doctor has gone or why, said Atiq. Doctors often have nonsolicitation clauses tied into the noncompete agreements, preventing them from letting patients know where they are relocating to.

The American Hospital Association, which represents the country’s for-profit hospitals, has opposed the proposed ban by the Biden administration. Chad Golder, general counsel for the AHA, said its members primarily use noncompete agreements for their doctors and senior executives, not lower-skilled workers who have less bargaining power when negotiating an employment agreement, and that the restrictions are needed, in part, to protect the financial investment hospitals make in recruiting, relocating, marketing and training their doctors.

“We think they are important for protecting investments that hospitals make to recruit doctors and senior executives,” said Golder. “Imagine you’re a rural hospital out in the country and you spend a lot of money to bring on a new physician, to get them integrated into the community, to train them, and they leave after a short period of time after you’ve made all this investment to get them out there.”

Golder said that deterring doctors from leaving their employer can also benefit patients by maintaining continuity of care across a single health system. When doctors change jobs it can require patients to have to transfer their medical records and in some instances have to coordinate care between doctors at multiple hospitals, he said.

But critics, including two of the largest physician groups — the American Medical Association and the American College of Physicians — say the agreements can contribute to physician shortages, sever doctor-patient relationships, and deter doctors from speaking out for fear of being fired and unable to work elsewhere in the community.

‘It’s really bleak here’

In Savannah, Georgia, HCA Healthcare-owned Memorial Health University Medical Center threatened one of its former OB-GYNs with a lawsuit last year when the doctor went to work at a nearby clinic focused on treating low-income women, according to a letter the physician shared with NBC News. Several months prior, the physician had their contract terminated without cause by Memorial, but the noncompete remained in place.

Under the doctor’s noncompete agreement, they were unable to work as an OB-GYN within a 25-mile radius of Memorial for one year following the end of their contract.

The doctor has since left their job at the clinic, where they were treating mostly uninsured women, and is planning a move out of the area. The doctor asked that their name not be published for fear it could harm their future job prospects.

Memorial said in a statement that noncompete agreements help protect the significant costs the hospital makes in recruiting a physician, paying for moving costs, and other expenses that come with setting up a physician’s practice, like hiring staff and leasing space. The hospital said its noncompete agreements don’t prevent physicians from setting up a private practice.

In Georgia, noncompete agreements have been contributing to a shortage of OB-GYNs across the state, where some women have to wait months to get routine care, said Kate Boyenga, executive director of the Georgia Obstetrics and Gynecology Society. She said her organization has begun looking into whether there is any state legislative action that could limit the scope of noncompete agreements for OB-GYNs to help address the shortages.

“When women don’t have access to that care, when it is exacerbated by having to travel far distances, having to take off work to go to prenatal appointments, having to secure child care and having to have adequate transportation, they’re not going to get the care as much as they should, and that’s what’s going to lead to complications,” said Boyenga.

Jessica Swanson is one of those patients who has struggled to get OB-GYN care in Savannah even though she has private insurance and has worked for more than a decade as a reproductive health educator and is a trained birth doula.

When Swanson was about four months pregnant with her second child in 2022, she began looking to switch to another OB-GYN in Savannah after seeing numerous “red flags” with her current doctor, she said. But after calling every OB-GYN practice in the area, she was either told they weren’t taking new patients or they didn’t return her calls.

When she began having complications later during her pregnancy, she had to show up at the emergency room, where the doctor on call performed a cesarean section.

“I should have had a choice in my provider. It was an incredibly frustrating experience,” said Swanson. “I just think about how much I brought into that situation — my level of education, my connections, my ability to navigate health care, really good insurance — and I still could not navigate myself to adequate health care.”

Even after giving birth, she still wasn’t able to find an OB-GYN to treat her when she developed mastitis, a painful inflammation of the breast tissue caused by breastfeeding, and instead had to go to an urgent care clinic.

“It was just a really bad experience overall, and I feel really let down by the larger medical community here,” Swanson said. “It’s really bleak here.”

Two cardiologists from another HCA-owned health system, Mission Health Community in North Carolina, said they were also threatened with legal action over a noncompete clause in their contract when they left to work for Pardee Hospital. The doctors, Marian Taylor and Lillia LaPlace, sued Mission to have the noncompete agreements thrown out. The case was dismissed in March, and Taylor and LaPlace are currently working for Pardee. A lawyer for Taylor and LaPlace declined to comment on the case, and the doctors didn’t respond to a request for comment. Mission Health also didn’t respond to a request for comment.

In Indiana, Lankford had signed a noncompete agreement when he started working at Lutheran Hospital in 2018 as a pediatric critical care intensivist. Under the agreement, he was prohibited from practicing any form of medicine within 30 miles of Lutheran for one year following his last day of employment there. When Lankford signed the noncompete agreement, he said he thought about the implications it could have, but didn’t think he had an option to negotiate over the provision.

“I had thought about it, but had experiences which led me to think that the hospitals which could employ me were not interested in negotiating noncompetes or employment contracts individually,” he said.

Lankford’s lawyers have argued that the agreement should be invalidated because Lutheran changed the terms of Lankford’s contract when in 2022 it fired a group of pediatricians at the hospital, leaving Lankford and his remaining colleague responsible for seeing all pediatric patients across the hospital, not just those in the intensive care unit where he was assigned. The move significantly increased his workload without additional compensation, according to court records.

“I felt that my former employer breached my contract. I believe I gave them many opportunities to fix the problem over a span of several months,” said Lankford. “In my opinion, they did nothing to fix the problem. I felt that if they weren’t going to honor my contract, I shouldn’t be bound by the noncompete in the contract that they refused to honor.”

Lutheran said in court filings that it did require Lankford to begin seeing general pediatric patients throughout the hospital, not just in the intensive care unit. But it denied that the change in Lankford’s job duties was a breach of contract and argued that his new duties were within the scope of his training and employment agreement. In a countersuit filed against Lankford and Parkview by Lutheran, the hospital alleges that it was Lankford who had breached his contract by leaving his position and violating the noncompete agreement. Lutheran says it offered Lankford the opportunity to buy out the noncompete provision for an undisclosed amount.

Lutheran alleges that as a result of Lankford’s actions, it has suffered a loss of business and goodwill in the community along with costs associated with recruiting Lankford and having to replace him. It is seeking compensatory and punitive damages along with attorney’s fees and other related costs.

A spokesperson for Lutheran declined to comment.

In August, Lankford won a preliminary injunction making the noncompete agreement unenforceable and allowing him to see patients at Parkview, at least temporarily. But the injunction is only preliminary and the legal battle could stretch on for months longer, even beyond when Lankford’s noncompete agreement expires, said Kathleen DeLaney, a lawyer for Lankford who has represented numerous doctors bound by noncompete agreements.

For Lankford, he says he felt he had no other option but to take his case to court after he was unable to keep working at his new employer.

“It was very hard to have to stop working, to have fits and starts with a new job, and to be distracted from my professional career by the legal dispute. But I know that it was the right thing to do for my patients, my community and my family,” said Lankford.

Battle over burn patients

In Ohio, Anjay Khandelwal, a surgeon, had to take his case all the way to the state’s Supreme Court before winning the right to treat pediatric burn patients at Akron Children’s Hospital after being sued by his former employer.

Khandelwal started working at MetroHealth in Cleveland in 2013 and signed a noncompete agreement restricting him from providing similar medical or professional services within a 35-mile radius for two years following his last day of work at MetroHealth, according to legal filings.

But in 2020, Khandelwal resigned from his job and accepted a position as the director of the burn center at Akron Children’s Hospital, the only other burn center in the noncompete radius. After learning about his new position, MetroHealth sued Khandelwal and Akron Children’s, arguing in court filings that it had invested significantly in hiring and recruiting Khandelwal and developing his connections and visibility in the region. It also argued Khandelwal had access to confidential trade secrets, like pricing data and strategic plans.

Khandelwal denied the allegation in court and argued that patients’ access to burn care in the region could be jeopardized if he wasn’t able to practice surgery for two years.

The court ruled partly in favor of Khandelwal, saying he could begin working as a burn surgeon at Akron Children’s, but wasn’t able to start working as the center’s director for a year after leaving MetroHealth. The ruling was upheld by the Ohio Supreme Court in 2022 and Khandelwal is now working as the director of the burn institute at Akron Children’s Hospital.

Khandelwal and Akron Children’s didn’t respond to requests for comment. MetroHealth declined to comment.

Despite some victories for physicians, it is still relatively rare for doctors to challenge their noncompete agreements in court because of the financial and reputational consequences, said Atiq. Instead, doctors often quietly move to a new city if they want to leave their job or are fired, uprooting their families and leaving their patients behind, but avoiding the risk of a lawsuit.

“Why would a person who is in their 30s with one or two small children, being the main breadwinner for the family, jeopardize that? What’s easier for that person is to just leave and go somewhere else,” said Atiq. “Inherently, it is wrong.”

This article was originally published on NBCNews.com