Five urologists sued for leaving the Delta Medix medical group in Scranton allege the practice’s chief executive officer and several shareholders schemed to force them out so they could personally enrich themselves, according to a lawsuit filed in Lackawanna County Court.
Urologists Ira Kohn, James Stefanelli, Jerald Gilbert, J. Robert Ramey and Brian Kapp claim CEO Margo Opsasnick and eight physicians took the action so they could reap more profit from the proposed sale of all or part of the medical practice to any of three area hospital systems that expressed an interest.
The lawsuit, filed by Scranton attorney George Reihner, comes six weeks after Delta Medix filed a lawsuit against the urologists, alleging they violated a noncompete agreement when they resigned in September and joined Geisinger Clinic, a subsidiary of Geisinger Health System.
The suit, which also names Geisinger as a defendant, seeks an injunction barring the physicians from practicing within 40 miles of Scranton.
In a related matter, Geisinger Clinic recently filed a countersuit against Delta Medix, arguing legal deficiencies with the noncompete agreement make it unenforceable. In the alternative, it argues a judge should nix the agreement because it will negatively impact patient care.
Delta Medix is one of the larger private medical practices in the region. It also operates the Center for Comprehensive Cancer Care in Scranton.
The urologists’ suit seeks damages on several counts, including breach of fiduciary duty and unjust enrichment. It also alleges Delta Medix will soon become financially unstable and asks a judge to involuntarily dissolve the practice and appoint a receiver to distribute its assets.
Lisa Lori, of Philadelphia, who is the attorney for Delta Medix, said Opsasnick and other officials “categorically deny” all allegations in both lawsuits, which she contends were filed solely to deflect from the suit Delta Medix filed in August.
She took particular exception to the urologists’ claims that officials conspired to oust them.
“That is absolutely false and outrageous that they would make that allegation,” Lori said. “I think it shows their desperation.”
Lori also denied claims Delta Medix is financially unstable, noting the practice is continuing to grow. The medical group recently added internal medicine and family medicine physicians to the staff.
The bulk of the urologists’ lawsuit focuses on Opsasnick’s efforts in 2017 and 2018 to sell Delta Medix’s urology practice and/or the entire medical practice and its cancer center to three suitors: Geisinger Health System, Community Health System and Coordinated Health.
According to the suit, Opsasnick sought the sale, in part, because of a change in Medicare that significantly reduced payment for certain urology procedures if they are performed by a physician in private practice, which drastically impacted the practice’s profitability.
Kohn, Stefanelli, Gilbert, Ramey and Kapp initially opposed the sale, but later supported it after they learned the Medicare rate changes did not apply to physicians who are employed by a hospital system. That made joining a hospital system more attractive.
Negotiations with Geisinger and the other hospitals fell through, but were initiated again with Geisinger in February.
The suit says the urologists, who at the time were among 14 shareholders of Delta Medix, encouraged Opsasnick to continue negotiations with Geisinger. Unknown to them, she halted talks in March and began “secret” negotiations to sell the practice after forcing them out. That would benefit Opsasnick, who claims to have a financial stake in the cancer center, and the shareholders because now they would split the proceeds from any sale among nine people, instead of 14, the suit says.
“By squeezing plaintiffs out of Delta ... Opsasnick and the non-urology physicians stood to gain hundreds of thousands of dollars at plaintiff’s expense,” the suit says.
In addition to Opsasnick, the suit names eight physicians as defendants, who are also shareholders — Kristine Kelley, James Roche, Mark Frattali, Anthony Brutico, Keith Pritchyk, Terrence Lenahan, Daniel Brown and Donald Preate Jr.
The counter lawsuit Geisinger Clinic filed against Delta Medix asks a judge to rule the noncompete agreement the physicians signed in 2016 is unenforceable.
Dan Brier of Scranton, attorney for Geisinger, argues the agreement is legally deficient for several reasons, including that it does limit the time frame of the restrictions.
Brier also argues public policy dictates the agreement be voided because Scranton has a shortage of urologists. Forbidding the doctors from practicing in or near Scranton will negatively impact patient care.
Lori said that lawsuit also is meritless. She noted Delta Medix offered to allow Kohn, Stefanelli, Gilbert, Ramey and Kapp to continue practicing in Scranton if they pay the practice their share of its debt. They have refused that offer, however.
Even if they are barred from practicing locally, Delta Medix quickly retained three urologists to replace the departing physicians. It now has a staff of four urologists, which allows them to continue to provide quality care, she said.
David Jolley, spokesman for Geisinger Health System, said it stands behind its legal filings and looks forward to proving them in court.
Contact the writer: tbesecker@timesshamrock.com; 570-348-9137; @tmbeseckerTT on Twitter