and at the ¶ 25.) Special Despite Master the objection, executed an asset agreement in June 2011 (the Purchase Agreement ). ¶ 22.) 3 first of these steps, Steward alleges, took place when Blue Cross filed an objection with the Special Master to Steward s proposal. ![]() In March 2011, the Special Master sued Blue Cross, alleging that Blue Cross had made inadequate payments to Landmark. 1 The Steward alleges that, long before its failed acquisition attempt, Blue Cross was in part responsible for the financial struggles at Landmark. Steward alleges that its proposal to acquire To Steward (Id.) Landmark triggered a series of anticompetitive steps by Blue Cross aimed at blocking Steward s entry into the Rhode Island market. at ¶ 26.) situation, extended Landmark a five million dollar line of credit. bolster Landmark s precarious financial (Id. (Id.) Steward s plan for Landmark involved investing approximately 35 million dollars in capital improvements and physician recruitment, and using Landmark as a base from which to offer limited network insurance plans, as it had done in Massachusetts. at ¶ In May 2011, Steward submitted a bid and the Special Master recommended that it be accepted. at ¶ 21.) In February 2011, the Special Master sought a potential buyer to acquire Landmark as a means of resolving Landmark s ongoing fiscal woes. at ¶¶ 5, 18.) against finances, the the backdrop of Providence the deterioration County Superior of Court appointed a special master to oversee Landmark s operations (the Special Master ). at ¶ 19.) This model has achieved a level of success in Massachusetts, where Steward is based. as ¶¶ compared 17-18.) 2 to more Steward expensive also teaching sells health insurance, and provides much of the care under those policies within its network of community hospitals. The Complaint The facts, as alleged in the Complaint, are as follows: Steward employs a business model focused on the acquisition and development of financially distressed community hospitals, which Steward believes are better suited to provide quality medical services efficiently, hospitals. For the reasons set forth, the Motion to Dismiss is DENIED. 16) filed by Blue Cross pursuant to Federal Rule of Civil Procedure 12(b)(6). Now pending is a Motion to Dismiss (ECF No. that it acted legally insurance and the purchase of In response, Blue Cross contends when it refused to accept the reimbursement rates at Landmark that Steward was offering, and otherwise operated within its rights in order to promote its business interests. (collectively, Steward ) allege that the Defendant, Blue Cross & Blue Shield of Rhode Island ( Blue Cross ), violated state and federal antitrust law, and tortuously interfered with contractual relations, by engaging in a series of anticompetitive steps designed to block Steward s acquisition of Landmark and its entry into the Rhode Island markets for the sale of commercial health commercial hospital services. the ill-fated acquisition form The Plaintiffs, Steward Health Care System, LLC, Blackstone Medical Center, Inc., and Blackstone Rehabilitation Hospital, Inc. The circumstances the surrounding basis of this lawsuit. its subsidiary, Approximately the a Rehabilitation year and a half Hospital of later, the proposed acquisition was deemed a failure and abandoned. ![]() ![]() In May 2011, Steward Health Care System, LLC submitted a proposal to acquire Landmark Rhode and Island. care Medical Center community ( Landmark ) hospital located is a 214-bed, in Woonsocket, Each year, it provides some 175,000 patients with a wide array of medical services ranging from ambulatory surgery and orthopedics to radiology and cancer treatment. ![]() ) ) BLUE CROSS & BLUE SHIELD OF ) RHODE ISLAND, ) ) Defendant. UNITED STATES DISTRICT COURT FOR THE DISTRICT OF RHODE ISLAND _ ) STEWARD HEALTH CARE SYSTEM, LLC, ) BLACKSTONE MEDICAL CENTER, INC., ) f/k/a STEWARD MEDICAL HOLDING ) SUBSIDIARY FOUR, INC., BLACKSTONE ) REHABILITATION HOSPITAL, INC., ) f/k/a STEWARD MEDICAL HOLDING ) SUBSIDIARY FOUR REHAB, INC., ) ) C.A.
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