A Duluth, Minn., family practice physician is suing Aspirus St. Luke’s Hospital, also in Duluth, claiming the system’s enforcement of her noncompete blocks her from opening a private practice and harms community access to care, Duluth News Tribune reported Nov. 27.
What happened?
- Nyasha Spears, MD, planned to open a direct primary care clinic in Duluth that would charge patients a flat monthly membership fee. In a lawsuit filed Oct. 26 in Minnesota’s 6th District Court, she argues the clinic would not financially compete with Wausau, Wis.-based Aspirus Health because the system’s hospital is already operating over capacity, with primary care appointments booked weeks to months out and specialist referrals taking months.
- Dr. Spears said her proposed practice would focus on uninsured and underinsured patients. She would opt out of Medicare and would not bill Medicare, Medicaid or commercial insurers, relying solely on membership fees for routine primary care services. Dr. Spears contends that enforcing the noncompete violates the public interest by further limiting access to primary care in a region already facing shortages and long waits.
- She links the need for a direct, primary care option to worsening insurance instability locally, including expected Medicaid and ACA coverage losses in the region and Aspirus St. Luke terminating its Blue Cross Blue Shield of Minnesota contract, effective Dec. 31, which could push more patients out-of-network.
- Dr. Spears’ employment contract includes a noncompete clause barring her from practicing within 25 miles of any Aspirus medical office where she regularly worked in the prior year, for two years. Aspirus has threatened litigation if she opens a clinic within that radius.
- Separately, the Minnesota Attorney General has opened an antitrust investigation into Aspirus’ use of noncompete clauses in Duluth, issuing a subpoena after physicians alleged they were pressured to sign amended, annually renewed contracts that retained or renewed noncompete language despite Minnesota’s 2023 ban.
“Aspirus St. Luke’s respects Dr. Spears’ dedication to caring for underserved populations. We also recognize that there are differing opinions about noncompete agreements. However, these agreements remain lawful and enforceable under current Minnesota law,” Aspirus said in a statement shared with Becker’s. “Dr. Spears’ agreement includes a reasonable competition restriction applicable to the Aspirus Luke’s Service area, which is common. She is free to practice outside of that area. In regard to this lawsuit, we are confident in our approach and respectfully await the ruling of the District Court.”
