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second, because Sutter Health's management believed, on the basis
of their projections of the financial performance of the UHMG
physicians' group after acquisition, that any additional payment
for intangibles would have rendered the deal financially
nonviable for Sutter Health. Sutter Health's management
anticipated that petitioners and the other UHMG physicians could
be persuaded to affiliate with Sutter Health through additional
incentives, such as being given a management role, through
participation in various management committees of SMF and Sutter
Health.
Many of petitioners were greatly concerned that they not be
required to sign any noncompete agreement in connection with
their affiliation with a larger health care organization. It was
vitally important to them to be able to terminate their
affiliation in the event they judged it unsatisfactory and resume
the practice of medicine in the Davis, California, area without
having to relocate. Many were familiar with the tribulations of
physicians in the area who had affiliated with the Woodland
Clinic, which required affiliating physicians to sign noncompete
agreements. Petitioners were aware that when certain Woodland
Clinic physicians sought to terminate their relationships with
the clinic, they became embroiled in protracted litigation over
12(...continued)
referrals in violation of the antikickback statute. Violations
of the statute could result in criminal penalties and/or
exclusion from participation in Medicare and Medicaid programs.
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Last modified: March 27, 2008