The suit was brought by Heartland Spine & Specialty Hospital in Overland Park, Kan., which sued HCA Midwest, Saint Luke's Health System and Carondelet Health System, accusing them of conspiring to shut Heartland out from managed-care contracts and drive it out of business. While Saint Luke's Northland Hospital-Barry Road and -Smithville campuses are not specifically named in the suit, both are part of the Saint Luke's Health Care System.

Other defendants in the original suit included North Kansas City Hospital and Shawnee Mission Medical Center. North Kansas City Hospital reached a confidential settlement with Heartland earlier. Blue Cross and Blue Shield of Kansas City, Cigna Health Care, Humana and United Healthcare also reached confidential settlements.

In a lengthy order, U.S. District Judge Monti Belot denied a request to dismiss the suit. Saint Luke's has asked Belot to reconsider his ruling.

Heartland alleged in the suit that the defendants agreed to exclude physician-owned specialty hospitals like Heartland, while ensuring their own hospitals would not be shut out.

As part of the alleged boycott, the hospitals charged in the lawsuit agreed to accept lower reimbursements rates from managed-care companies.

The federal government has raised some red flags about physician-owned specialty hospitals. Congress ordered a moratorium on certain Medicare payments to them, but the moratorium expired last year.

Heartland Hospital opened in September 2003, and is owned by a group of physicians, and focuses on spine and upper extremity treatment. It is licensed for 48 beds.

The case is expected to go to trial in Wichita, Kan., in April 2008.

Business Editor Gene Hanson can be reached at 389-6638 or at ghanson@npgco.com.