An Overland Park physician-owned hospital has accused all the area's leading health insurers and most big hospitals of conspiring to drive it out of business.

Heartland Surgical Specialty Hospital LLC's lawsuit in U.S. District Court in Kansas City, Kan., offers the latest local evidence of one of health care's most divisive national issues.

The suit, filed April 26, claims that HCA Midwest Division has organized other area hospitals to pressure insurers to not extend managed-care contracts to Heartland, an orthopedic hospital that opened in 2003.

Because insurers will not cover procedures performed there, Heartland said that it has suffered severe financial damage and that prospective patients have been denied access. Heartland claims to offer better patient satisfaction, lower costs, lower mortality rates, shorter stays and lower infection rates than community hospitals.

"At the end of the day, this case is about access for folks to a better facility that we believe has better care," said Heartland attorney Norman Siegel of Stueve Siegel Hanson Woody LLP. "What is restricting that access is what we believe to be the anti-competitive conduct of the defendants."

The suit alleges conspiracy in restraint of trade and tortious interference with prospective business relationships. Heartland seeks to enjoin the defendants from continuing to pressure managed-care insurers to refuse to offer contracts. It also seeks unspecified damages.

Rob Dyer, vice president of marketing for HCA Midwest Division, said he could not respond to specific allegations in the suit. HCA executives are leading a public relations campaign to get Congress to change federal law to prohibit physicians from referring patients to hospitals they own.

"You will probably see more frivolous lawsuits filed by these self-referring specialty hospitals in the future," he said. "We at HCA believe that specialty hospitals, which use physician self-referral as the business model for their financial success, are endangering the future of quality health care across the country."

Besides HCA Midwest, owner of 12 area hospitals, defendants include Saint Luke's Health System, Carondelet Health System, Shawnee Mission Medical Center, North Kansas City Hospital, Blue Cross and Blue Shield of Kansas City, Coventry Health Care of Kansas Inc., United Healthcare Inc., Humana Health Plan Inc., Aetna Inc. and Cigna Healthcare of Ohio Inc.

The suit alleges that a Blue Cross representative told Heartland that HCA and hospitals in its network "had instructed Blue Cross not to offer Heartland a contract."

Blue Cross spokeswoman Sue Johnson said the insurer could not comment because it had not seen the complaint.

The suit comes as federal and state governments grapple with the controversy surrounding specialty hospitals, in which physicians -- most frequently orthopedists and cardiac surgeons -- build facilities dedicated to their special expertise and patients.

About 100 such hospitals sprung up nationwide, including 11 in Kansas, before Congress in 2003 declared a moratorium on new construction so the federal government could study the trend.

Community hospitals lobby vehemently against specialty hospitals, saying they "cherry pick" the easiest and best-paying cases, leaving community hospitals to provide money-losing emergency rooms, indigent care and other unattractive societal needs.

Entrepreneurial physicians counter that their goal is to offer more convenient, more efficient and better care. Heartland, for example, was built by orthopedic surgeon Dr. William Reed and about two dozen other local physicians frustrated by their relationships with community hospitals.

Jeff Ellis, a health care lawyer at Lathrop & Gage LP, said the tension most likely will be resolved by legislation, not litigation.

"Public policy is going to have to deal with this," he said.

©2005 The Business Journal of Kansas City