Three Bend doctors argue in a federal antitrust lawsuit that a multibillion- dollar company has a monopoly hold over the local outpatient surgery market, a position they say stifles patient choice and drives up prices.

Their case, however, may have taken a hit this month when an out-of-court arbitration panel decided in favor of AmSurg, a company that took in more than $2 billion last year and owns and operates about 250 outpatient surgery centers nationwide. An attorney for AmSurg said the court case, which a judge put on hold pending the arbitration process, will now likely go the way of the panel’s decision.

“With respect to the pending lawsuit in federal court, AmSurg believes that the arbitration has resolved all of the outstanding issues,” Russell Baldwin, a Nashville, Tennessee, attorney representing AmSurg, wrote in an email to The Bulletin.

But Greg Lynch, the Bend attorney representing Bend neurosurgeons Kent Yundt and Anthony Hadden and their colleague Dr. Philip Wallace, said that’s “absolutely wrong.” He said the panel wasn’t evaluating the lawsuit’s antitrust claims.

AmSurg argues Yundt and Hadden violated their noncompete agreement with the Bend Surgery Center, LLC, which precludes them from opening their own surgery center, by taking steps to build a surgery center less than three months after signing the agreement. The doctors, both of Northwest Brain & Spine in Bend, argue in their lawsuit that AmSurg’s agreement is overly restrictive and unenforceable.

“AmSurg is engaged in anticompetitive and monopolistic practices that are harming or will harm Central Oregon residents by restricting a majority of the surgeons in Central Oregon, including plaintiffs, from being able to provide Central Oregon residents better access, choice and lower prices in obtaining surgery and related procedures,” the doctors argue in their original complaint, filed in August 2015.

AmSurg owns a stake in two outpatient surgery centers in Bend: the Bend Surgery Center and Doctors Park Surgery Center. An Oregon Health Authority document lists four licensed ambulatory — or outpatient — surgery centers in Bend as of April, although one of those listed is closed.

Yundt and Hadden sold AmSurg a portion of their ownership of the Bend Surgery Center when the company bought a stake in 2014. At that time, Yundt, Hadden and the facility’s other physician owners signed AmSurg’s noncompete agreement, which precludes them from opening their own outpatient surgery facilities within five years or two years after their membership ends, whichever is later.

A few months later, the doctors signed a lease on a property that would house both their offices and a new surgery center. Their intention, they argue in court documents, was to only perform procedures that are exempted from AmSurg’s noncompete agreement because they’re typically not performed at the Bend Surgery Center. Representatives with the Bend Surgery Center did not return a request seeking comment.

Wallace, who moved to Bend from Texas to join Yundt and Hadden’s practice in fall 2013, said despite not having signed the Bend Surgery Center, LLC’s agreement, Yundt and Hadden’s contract prevents him from opening a surgery center to perform interventional spine procedures and diagnostic and therapeutic injections.

“It’s a billion-dollar corporation that’s using predatory practices to take over small towns,” Wallace said. “It’s their business model.”

In its conclusion, the arbitration panel wrote that AmSurg’s noncompete agreement extends to any services, whether they’re performed in a surgical center or doctor’s office, for which facility fees are charged. Health care providers, especially hospitals, often charge facility fees for allowing patients to use their buildings and equipment. Neither party disputed that the doctors intended to charge facility fees in their surgery center, the panel wrote.

“This may somewhat limit (Yundt and Hadden’s) desire to maximize their own income, but it hardly can be said to remove them from the ranks of the medical profession or otherwise threaten the public good,” the panel wrote.

Arbitration proceedings are intended to be confidential, but a copy of the panel’s decision was provided to The Bulletin.

Baldwin, the attorney representing AmSurg, wrote in an email that the Bend Surgery Center had restrictive noncompete agreements in place before AmSurg purchased an ownership stake. Further, he said, it is inaccurate to assert AmSurg has a monopoly position in Central Oregon.

“In short, there is robust competition for ambulatory surgery services in Central Oregon,” he said.

— Reporter: 541-383-0304,

tbannow@bendbulletin.com