Saint Alphonsus Health System, Treasure Valley Hospital, Idaho Attorney General Lawrence Wasden and the Federal Trade Commission accused St. Luke’s Health System of breaking antitrust laws when it bought Nampa-based Saltzer Medical Group, Idaho’s biggest independent physician practice, in 2012. A federal judge in Boise ruled earlier this year that the acquisition gave St. Luke’s too much of the primary-care market in Nampa and would lead to higher prices. The health system is keeping Saltzer while it appeals.
St. Luke’s said after the trial that an insurance policy was covering most of its legal expenses. But in documents accompanying a recent $170 million bond deal for various St. Luke’s capital projects, St. Luke’s disclosed that its liability insurer has cut off payments.
A spokeswoman for St. Luke’s said the insurer said it does not have to pay costs because the court issued a final judgment that St. Luke’s illegally gained a profit. St. Luke’s disagrees. The insurer’s identity was not disclosed.
“Even if this were a ‘final’ judgment within the meaning of the insurance policy, the court did not make any such finding,” said Beth Toal, spokeswoman for St. Luke’s. “We have been working with the insurance company to resolve the issue.”
St. Luke’s told bond investors that the insurance denial is “without merit,” and that St. Luke’s “will vigorously pursue coverage.” The health system said it cannot “reasonably estimate the possible loss or range of losses, if any, arising from the litigation.”
The $8 million doesn’t include legal costs the plaintiffs in the case want St. Luke’s to pay. A couple of months after the trial, the plaintiffs demanded that St. Luke’s pay a combined $10 million. Saint Alphonsus tallied its costs at more than $8.1 million. St. Luke’s called the fees “shocking.”
St. Luke’s maintains that the multimillion-dollar Saltzer buyout is integral to its plan to curb medical-price inflation in Idaho over the long run.