LOS ANGELES (CN) - A Marina Del Ray medical provider claims that the largest concierge medicine provider in the United States illegally squeezes out competitors by tying physicians to exclusive agreements.
Signature MD sued MDVIP of Boca Raton, Fla. in a federal complaint of violations of the Sherman Antitrust Act, and violation of California's antitrust and unfair competition statutes in the Cartwright Act.
According to the July 14 lawsuit, MDVIP membership program boasts 700 physicians and 200,000 members in 43 states, making it the largest concierge medicine program in the nation.
A patient enrolled in an MDVIP concierge program enjoys significant benefits for an annual fee of $1,500 to $1,800, including same-day or next-day care, SignatureMD says. Longer doctor visits are understood to be part of the program.
Signature claims that MDVIP enjoys a 70 percent share of the concierge medicine membership program market and a 65 percent to 100 percent share in major cities and local markets across the country.
Physicians who sign up with MDVIP are required to limit their practices to 600 patients and must exclusively deal with MDVIP members, the lawsuit states.
MDVIP has a virtual monopoly in the market for concierge medicine, and the "turn-key" concierge medical programs SignatureMD also specializes in, according to the complaint.
"These turn-key programs are often referred to in the industry as 'franchises' because they involve an established network of concierge physicians who have signed a contract that licenses the use of a common trade name and because the physicians who join the program receive ongoing support and assistance in exchange for a fee," Signature says.
Unlike MDVIP, SignatureMD claims, it does not ask physicians to sever ties with patients who are not part of the program.
Physicians enrolled in an MDVIP concierge program have to pay MDVIP $1 million to leave for another program, according to the complaint.
"Defendant MDVIP has systematically tied up markets for concierge medicine membership programs by entering into lengthy and unduly restrictive exclusive dealing agreements with physicians that prohibit them from speaking with or contracting with SignatureMD or any other company offering concierge medicine membership programs during the term of their agreement with MDVIP and for a period of two years after their agreement with MDVIP expires," the lawsuit states.
SignatureMD claims MDVIP ties physicians to "evergreen" contracts that "lock physicians into renewing their arrangement with MDVIP throughout the remainder of their professional careers, rather than switching to a competing program."
The agreements act as a barrier to competitors in local markets across the country, SignatureMD claims.
"SignatureMD has been foreclosed from competing with MDVIP and severely injured by defendant MDVIP's illegal anti-competitive conduct," the 31-page complaint states.
The plaintiff seeks an injunction, damages and costs.
It is represented by Cyndie Chang with Duane Morris.
MDVIP did not immediately respond to a request for comment.