Federal lawsuit filed against members of Ballad Health and ETSU Physicians Group

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A federal lawsuit was filed against both the East Tennessee State University Physicians Practice Group and members of the Ballad Health Board of Directors on April 12th.

Ballad Health is the region’s largest healthcare system, governed by a board of a directors. The ETSU Physicians and University Physicians Practice Group is the medical company operated by East Tennessee State University, which is governed by a board of trustees.

The lawsuit claims a conflict of interest and possible anti-trust law violation because certain members of the Ballad Health Board of Directors also sit on the Board of Trustees for ETSU.

The lawsuit singles out Philanthropist Scott Niswonger and Eastman Executive David Golden, who serve on both boards. The lawsuit specifically questions ETSU President Brian Noland’s role as both Ballad Board Member and head of the university, which runs ETSU Physicians.

Lincoln Memorial University Law School Professor Stewart Harris explains that an anti-trust lawsuit in this case deals with the plaintiffs fearing a monopoly. He says the plaintiffs want to eliminate the overlap between the two boards to ensure there is actual competition.

“The contention is that these two organizations should be competitors,” he said. “That is East Tennessee Physicians should be competing with Ballad.” 

Harris says the ten residents who filed the lawsuit claim the conflict of interest will hurt them and the public by eliminating competition between Ballad and ETSU Physicians.

“The plaintiffs aren’t claiming a lot of specifics yet what they are saying is this is anti-competitive,” Harris said. “It’s likely to lead to higher prices and poor service and we’ll figure out exactly what our damages are during the course of litigation.”

The plaintiffs are not asking for money. Rather, they are asking the federal court to step in by separating and restructuring one or both boards of directors.

“They are asking the court to order that the two boards be restructured to eliminate these overlaps and these conflicts of interest,” Harris said.

On the final page of the lawsuit documents, the plaintiffs claim that the COPA, which governs the Ballad Health merger, is not effectively meeting the requirements of the state oversight that protect the merger from the Federal Trade Commission.

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