Lawsuit Pits Independent Cardiologist Against a Large San Angelo Hospital

 

SAN ANGELO, TX — A lawsuit filed in Tom Green County begs the questions, can a doctor sustain an independent practice in San Angelo and is there really competition in health care here?

Two very large hospitals control much of the region’s health care services because they filter many of their new clients through their respective emergency room operations. This is especially true for cardiac patients.

San Angelo’s last standing, truly independent cardiologist wants to remain that way, and is spending his own money to defend against what he says are anti-competitive trade practices by one of the large medical centers in San Angelo.

Dr. Miltiadis “Milton” Leon, M.D., founder, head doctor, and owner-operator of Cardiology Associates of West Texas alleges that San Angelo Community Medical Center (SACMC) and its subsidiary Community Medical Associates (CMA) are engaged in anti-competitive trade practices designed to put him out of business, or to force him to join a physicians’ group in defeat.

Dr. Leon is Greek-born and completed his medical degree in Greece, Magna Cum Laude. In the U.S., he completed a cardiovascular disease fellowship at the University of Texas Medical School in Houston. Then he certified his skills as an interventional cardiologist at Massachusetts General Hospital, which is affiliated with Harvard Medical School. He holds a Ph. D. in physiology. From 2008 until 2012, Dr. Leon served as SACMC’s Chief of Medicine and was formerly a cardiologist with West Texas Medical Associates.

Dr. Leon explained that operating as an independent cardiologist offers him more flexibility to serve his patients better and for less cost to them. On a tour of his office on Executive Dr., Dr. Leon pointed to equipment, like a sonogram for performing echocardiograms (called an “echo”), brand new. “I can offer an echocardiogram test for $204 to self-pay patients. If you get one at Community, it will cost you much more, because it is connected to a hospital. This is the same machine and it provides the same outcome,” Dr. Leon explained.

We called and checked prices. SACMC’s retail price for an echo is $2,859. If the patient pays up-front, SACMC offers a 40 percent discount, for a total cost of $1,715.40. That doesn’t include the cost to have a professional read the test, which can cost around $350 more. The billing clerk at SACMC suggested using a service called MDSave.com, where by using a credit card, a patient can purchase an echo, all-inclusive with the read, for a flat rate of $591. MDSave.com pre-negotiates cash prices with health care providers in Texas, Florida, Tennessee, and Oklahoma for their customers.

Even still, Dr. Leon’s quoted price is about one-third CMA’s heavily discounted price available using MDSave.com.

Earning reimbursements from health insurance companies is more difficult today because of the Affordable Care Act, or Obamacare, and the general mess health care finance has become. To cope, large corporations owning hospitals, like SACMC, are vertically integrating hospital services like emergency room care with doctors’ groups. Dr. James D. Reschovsky, Ph. D. and Dr. Eugene Rich, M.D. explained how hospitals are acquiring physician groups so they can control the availability of care in a 2015 article in the American Medical Association’s JAMA Internal Medicine Journal (“Hospital Acquisition of Physician Groups: On the Road to Value-Based or Higher-Priced Care”, Dec. 2015).

This control allows the hospitals to negotiate better reimbursement rates from insurance companies, the article states. In San Angelo, Shannon Medical Center controls the doctors at Shannon Clinic while SACMC is affiliated with CMA and controls the physicians there.

Some insurance plans force you to choose Shannon or Community, and not use both. For example, SACMC accepts the Blue Cross/Blue Shield of Texas HMO plans, while Shannon requires the BCBS PPO plan and does not accept the HMO. Both plans are almost identical in cost to the consumer. What insurance is accepted depends, in part, on how well the hospital group is positioned to negotiate reimbursement rates with health insurance companies.

How these hospitals are aligning with physician groups matters to consumers because ultimately, it boils down to out-of-pocket expenses paid by the consumer. Most insurance plans have a two-step coverage formula. A patient spends enough to meet his or her deductible first, then the patient will be charged a co-pay, which is a percentage, until the second step, the maximum out-of-pocket expenses are met. Less expensive treatment can generally save even the insured patient money. Competition in health care is one way to induce lower costs.

Yet Obamacare, Reschovsky et. al. argued, is forcing the vertical integration of physician groups into close affiliation with major medical centers. While Medicare is experimenting with alternative payment models based upon outcomes, a hospital’s control of physicians and medical specialists allows that hospital to “hedge” their revenue streams and maintain profitability.

In other words, vertical integration of hospitals with almost all available physicians is creating large monopolies that control access to health care, and ultimately, its price, absent government price controls.

Dr. Leon’s independent practice is closely aligned with SACMC. He has privileges at the hospital, operates in the hospital’s cardiology lab, and is an on-call interventional cardiologist for the SACMC emergency room. Yet, whatever treatment he can provide his patient in his office means SACMC isn’t getting its cut.

This is not true of cardiologists assigned to CMA, the physicians’ group aligned with SACMC. And, since CMA is certified by SACMC, it charges higher rates than Dr. Leon does, as noted in the example of the cost of an echo test mentioned above.

With a shortage of cardiologists in San Angelo, the arrangement Dr. Leon had with SACMC was working for both parties up and until, Dr. Leon alleges, CMA invested in creating its own cardiology practice, hiring Dr. Michael S. Blanc, M.D., as its medical director for cardiology and, Leon said, part owner of SACMC.

That made Dr. Leon a competitor of CMA and the hospital, and Leon alleges Dr. Blanc used his position at SACMC to make it impossible for him to operate his practice.

The allegations surround the ER and how the “on call” cardiologists are scheduled. The ER is there to save lives, but in the medical profession, the ER is also a vast resource of new heart patients to be assigned to the cardiologist on call if the patient is new or doesn’t have one already assigned.

In his lawsuit, Dr. Leon alleges SACMC, CMA and Dr. Blanc’s cardiologists ended up later seeing Dr. Leon’s patients if one of them previously appeared in the emergency room when Leon was not on call. “The patient was wondering if I had abandoned or ‘fired’ them because they’d leave the ER with a referral to CMA instead of to my office,” Leon said.

Because of this, Dr. Leon was forced to be on-call 24 hours a day, seven days a week to provide services to his own patients. Soon, Dr. Blanc refused to cover for Dr. Leon at all, forcing Dr. Leon to hire a cardiologist to assist him. That would allow Dr. Leon time to run his business, attend professional or educational meetings, and take care of his personal life.

Because Dr. Blanc was head of cardiology, he had significant influence on certifying new cardiologists to have privileges at SACMC. Leon alleges that at least two cardiologists Leon hired to work with him were harassed and forced to endure peer review when there were no significant issues or reasons to do so. And, Leon notes, CMA physicians were not subjected to the same level of scrutiny.

Dr. Blanc, however, disagreed. In a letter to Dr. Leon in 2011, Blanc told Leon he and his associate cardiologists at CMA had “significant and growing concerns regarding [Leon’s associate cardiologist, Dr. J.Y’s] practice patterns and professional integrity.” Therefore, Blanc wrote, CMA cardiologists would no longer cover for Dr. Leon’s patients at SACMC.

Soon thereafter, Dr. J.Y. and Dr. Leon split, and Leon was on his own. At that time, Blanc and CMA agreed to cover Leon’s patients again.

A few months after Dr. Leon lost his associate, in September 2012, Dr. Blanc heard Dr. Leon was interviewing another cardiologist to help cover his patients. According to a letter from Blanc, he said he was “disappointed” that Leon had not presented his concerns to CMA first, and again refused to cover Leon’s patients thereafter.

Leon claims that the SACMC offered to have CMA cardiologists cover Leon’s patients for $1,000 per day. Dr. Leon was not offered a reciprocal arrangement if he covered CMA patients, the lawsuit alleges. Doctors providing coverage for the patients of other doctors is generally considered a professional courtesy and no money is exchanged.

The coverage issues continued, to the point, Dr. Leon alleges, Dr. Blanc would not accommodate a schedule change to allow Dr. Leon to attend a meeting in San Antonio that was required of Leon for his approval to become a U.S. citizen. In court documents, an email exchange shows that Dr. Leon had to hire his immigration attorney to beg SACMC for time off the on-call schedule for Leon to attend the required naturalization interview with U.S. immigration officials. Dr. Blanc seemingly reluctantly agreed after an intervention from SACMC’s chief of staff, but added that no other changes for the rest of the year would be allowed.

Through the years, four doctors who Dr. Leon employed or attempted to employ, the lawsuit alleges, were met with actions by Dr. Blanc that either ran them off or made it difficult for them to practice medicine at SACMC. The lawsuit alleges Blanc used his position as the head of cardiology to place Leon’s non-CMA cardiologists into an arduous peer review process.

The last cardiologist hired by Dr. Leon in 2013 was Dr. Gregson Oghafua. He left San Angelo disappointed after his proctorship to practice as an interventional cardiologist was terminated by SACMC despite showing good progress, Dr. Leon said. “There were no complications,” Leon claimed. Dr. Oghafua returned in 2017 as only a general invasive cardiologist, not an interventional cardiologist he desires to be, because the process for the second proctorship offered by SACMC was too arduous, Leon said.

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Above: Dr. Milton Leon and his associate Dr. Gregson Oghafua. (cardiowesttexas.com)

Leon’s lawsuit alleges restraint of trade; anti-competitive conduct; tortious interference with existing contracts with his non-CMA cardiologists; tortious interference with prospective relations such as patients; fraud; promissory estoppel; and unjust enrichment with anti-competitive conduct.

Chris Payne, an Austin-based attorney who wrote the original lawsuit in 2016, said the trial would boil down to an antitrust argument against Community Health Systems (CHS), SACMC, CMA, and Dr. Blanc. “If you look at the numbers, the economic impact to Dr. Leon’s business jumps off the page,” he said.

In a pre-trial Friday, the attorney for SACMC stated in court his side will need to hire an economist to defend the case. At the end of the pre-trial, both sides were released to begin the discovery phase. Dr. Leon’s lead attorney, Paul Craig Laird II of Irving, promised multiple depositions, much of it on video.

A jury trial is scheduled for September 2019.

The trial promises to shine a spotlight on whether independent doctors can operate in a post-Obamacare financial environment, and all of it will take place at the Tom Green County Courthouse.

The trial pits two powerhouse legal teams against one another. For the plaintiff, Dr. Leon, Paul Craig Laird II is a highly experienced antitrust lawyer based in Irving. For the SACMC’s defense, Bill Katz of Thompson and Knight in Dallas, was named the antitrust lawyer of the year in “The Best Lawyers in America” by Woodward/White Inc. in 2015.

Dr. Leon is asking for over $2 million in damages and attorneys’ fees.

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Dr. Leon is a wonderful physician and man and has been my cardiologist for 4 years. I think it is abominable what the big medical facilities are doing to physicians, but more importantly what they are doing to patients! Good luck, Dr. Leon.

I have been a patient of Dr Milton Leon's for over 9 years. He has been very instrumental in treating my cardiovascular disease and keeps it well managed. He was also my mother's cardiologist. I would hate to see "the good ol' boy system" force a man of his character, skills and compassion out of San Angelo. Living in Big Lake requires that we seek specialist care from San Angelo or elsewhere. Because of Dr. Leon, I have chosen to have my medical providers in San Angelo. I would say that if Dr. Leon leaves San Angelo, I will be looking in the Midland/Odessa area for another cardiologist. SACMC needs to support providers who are ethical and moral and treat their patients as something other than just a nameless face. Stay strong Dr. Leon, your patients support you and appreciate the cost saving and professional treatment that your practice offers.

It’s all about the bottom line. But the hoods at SACMC and CMA are the most aggressive here in town. Their attempt to run this doc into the ground or run him off so far has been unsuccessful. Sounds like the mob, join us or else. Lots of local money tied up with these CMA doctors and we know how that work around here. Good luck Leon, you picked a hell of fight.

Given the star power of the lawyers involved, I look forward to the trial. Maybe we all will learn something. I only wish Shannon could be sucked into the melee. I'd dearly love to see that cabal get a strong dose of sunlight.

Can't wait to see that headline! Way to go. Take then down a notch and wish you could take SMC down too. The rates they charge quadruple to get the contracted rate they need or want. My cardiologist retire from Shannon Clinic but said he'd miss his patients. He got tired of the insurance companies telling him what he could and could not do. He only wanted to treat the whole patient not just what they allowed. When he retired I was going to figure out what cardiologist I wanted to see at Shannon Clinic and was told I needed to get a PCP or a Internist and that I did not need a cardiologist. Now how does a receptionist know that. I respect the receptionist as they catch a lot of crap from patients but I had been seeing the cardiologist for about 18 years so I'd think I still need one. As it turns out I have a internist. I have not had a echocardiogram, cardiac stress test, or chest xray since the day my cardiologist retired. I know I need them but cannot afford Shannons' self pay rates and then I would have to tell the Internist I wanted then done and why. People may think I am making this up but I'm not. The internist even tried to change my BP medicine and I agreed at first. Then after taking it a few days I remembered why I was taking what I had been on for years. So I called and told them I would not take the new RX and got the old one back. Some doctors just don't listen. It's about time someone in private practice did something to stand up for themselves. I hope more doctors in private practice will do the same.

Just gives me uncontrollable diarrhea........ $2,859 for a hospital echo-cardiogram and with the same exact machine in his office $204..... I don't know why the Attorney Generals office can't figure out a way to make theft charges prosecutable in these sorts of things...........

Its is a shame what the Healthcare Industry is doing to Americans. They should be prosecuted for what they do to people who are in need .
Good Luck DR LEON

The above argument is all about getting the larger piece of the money pie. Not taking care of oneself will result in sickness. Now one pays the price. One can either do "preventive care" or "treatment care". Many diseases can be prevented such as Heart Disease, Diabetes, etc....and yes, Obesity too. The dilemma is when does the individual want to pay and to whom? Like taking a car to the mechanic for annual services in order to keep it running. Why do people not take care of their bodies. Putting junk food and not being mobile.

Genetics and Family Tree provide good information as well as other diagnostic test and advance blood work similar to what the Cleveland Clinic in Ohio is doing. It is tailored to the individual and not that treatment where "one fits all". This kind of care is being provided but that is not what is wanted here as it takes business away by keeping individuals healthy. Is treatment better when one is losing limbs or having a stroke, losing eye sight or a kidney. Now competition is good as Dr. Leon proves that his echocardiogram test for $204 is way cheaper than his competitors. Remember that not everyone will seek treatment or accept prevention thus there are more patients than one can handle. There is more than one side here and the Citizens of San Angelo lose as they are not given the options to select care. Sickness cost Money

Either John Smith has zero cost 100% for everything medical insurance, or he is profiteering as a member/collaborator in the Medical Industrial Complex that has booted the military complex for the position of biggest boondoggle of all times.
Fraud is rampant in all aspects of the medical profession, I've witnessed it. Ask for an itemized bill for any hospital stay, or get railroaded into helicopter medical transport and you'll be amazed.

Not a Medical Doctor. But what happen to taking responsibility for one's health. The Government is not going to take care of one nor is the Hospital or Insurance going to going to provide "Free" service. I agree one needs to get an itemized bill Better yet, ask for a discount or find out what the cost is before going to the hospital and you decide whether you want care. If Dr. Leon proved the echo for a cheaper price, one should get it do there. Cost of Health Care is outrageous. I can not afford it so I take care of myself.

Can you prevent that semi trailer from crossing the center stripe and turning you into a paraplegic? Can you prevent the genetic premature onset of Alzheimers? My point being, many medical conditions are not foreseeable or preventable. Once again, greed and the power that mega money wields, makes the rules. The solution? I wish I knew.

John (not a doctor) Smith must be Pollyanna using an assumed name. Many people enter the hospital via a $3500 ambulance ride after an auto accident, burst appendix, heart attack, bee attack or a hundred other life threatening emergencies. Am I to understand that you suggest getting an estimate before you agree to be admitted? Do you really think you can control every variation of these events by healthy living? Your suggestion to see Leon for the cheaper echo doesn't make sense. The whole point of the lawsuit being discussed is to try to keep a monopoly from fixing the price at 10X as much.

What is this town know for--"a retirement town". What do you see all over town being built;;"clinics and ER stand alone clinic" (and restaurants). Bigger hospital. This law suit discussed is "trying to keep a monopoly from happening". Overall picture of San Angelo, only 2 hospitals in town with connections to every clinics (monopoly). Independent practice are not welcome as in cases their prices are cheaper in order to compete. Cost of health care is out-of-control. While their is no solution in sight, why not take care of oneself. Watch what one eats and do exercise. Go see a doctor for risk factors in order not to have disease. Do not go by ambulance or to the ER unless necessary. 80% of the population is either overweight or obese. Obesity is a risk factor for other diseases to include diabetes to fractures.

Do go to the ER and use an ambulance if it is truly an emergency. But now insurances are not paying if it was not truly an emergency. Sure they have to see one, but now the patient will pay 100%. And now the monopoly is to have patients pay more in care. The monopoly not only effects doctors but patients as well as the monopoly controls prices. For elective surgeries, one can compare prices. Many people go to bigger towns where it is cheaper. One can not control certain things but many are controllable like what one eats but even that may not be a choice.

Stay healthy as it is cheaper than getting sick. My two cents. My opinion.

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