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Conflict of interest: Ballad Health facing anti-trust lawsuit

Matthew Lane • Apr 12, 2019 at 5:15 PM

GREENEVILLE — A federal anti-trust lawsuit has been filed against Ballad Health, ETSU Physicians, and all 11 members of Ballad’s board of directors.

In short, the lawsuit seeks to have Ballad’s board of directors reconstituted with new members who do not have a conflict of interest, while declaring the Ballad Certificate of Public Advantage (COPA) as inadequate when it comes to state supervision.

The lawsuit was filed in U.S. District Court in Greeneville on April 12. Named as the plaintiffs are 10 Sullivan and Washington County residents: Christine and David Bearden, Teri Cook, Carolyn Gibbons, Elmer and Ladonna Greer, Mark Hutchins, Kevin Mitchell, Jamie Pierson and Crystal Regan.

The Greeneville law firm of Santore and Santore is representing the plaintiffs.

Defendants named in the lawsuit include ETSU Physicians, Ballad Health and its board of directors: Barbara Allen, Julie Bennett, David Golden, David Lester, Alan Levine, David May, Scott Niswonger, Brian Noland, Gary Peacock, Doug Springer and Keith Wilson.

In January 2018, the Tennessee Department of Health approved a COPA which allowed for the merger of Mountain States Health Alliance and Wellmont Health Systems into Ballad Health.

The plaintiffs argue that the COPA does not provide for active state supervision of the composition of Ballad’s board of directors, noting that three members of the board are essentially “serving two masters.”

The plaintiffs claim that Noland, Niswonger and Golden have conflicts of interest that prohibit them from serving on Ballad’s board of directors. Noland is the president of ETSU, while Niswonger and Golden both serve on the board of trustees of ETSU.

“In the extreme ... Niswonger and Golden have the authority, in conjunction with their fellow trustees, to dissolve ... ETSU Physicians, and thus completely stifle its status as a market competitor with Ballad,” the lawsuit states.

The plaintiffs are seeking an injunction preventing Noland, Niswonger and Golden from serving on two competing boards and an order compelling the reconstituting of the Ballad board of directors.

Meaghan Smith, a spokesperson for Ballad, said the company will respond to the lawsuit when it has been served and has had a chance to review it.

“The members of the Ballad Health board of directors were carefully selected in accordance with the law and with the consent of the regulatory agencies in Tennessee and Virginia,” Smith said. “All have acted with complete integrity and in the best interest of the communities we serve.”

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