St. Francis sues OrthoIndy over new surgery center

Back to TopCommentsE-mailPrintBookmark and Share

St. Francis Hospital and Health Centers has sued three physicians affiliated with OrthoIndy over the group's new $20 million Indiana Orthopaedic Hospital, scheduled to open in Greenwood next year. The complaint alleges the new facility breaches a partnership deal struck in 2001.

According to St. Francis’ civil complaint, filed Dec. 18 in Hamilton County Superior Court, St. Francis and Ol South LLC, an OrthoIndy affiliate, in 2001 agreed to become equal partners in another facility — the Indiana Orthopaedic Surgery Center at 5255 E. Stop 11 Road on the St. Francis campus.

“We’re surprised and disappointed St. Francis has sued three of our doctors," said OrthoIndy’s attorney, David Herzog, a partner with Indianapolis-based Baker & Daniels LLP. "We believe the suit has no merit, and we intend to defend it vigorously.”

Owned by physicians practicing in pain management, orthopedic surgery, neurosurgery and anesthesia, the Indiana Orthopaedic Surgery Center opened in spring 2005. According to St. Francis’ complaint, its profit exceeded $8 million in 2007 and 2008. Its managers included OrthoIndy physicians Dr. Scott Gudeman, Dr. Robert Falender and Dr. H. Jeffery Whitaker.

OI South merged into OrthoIndy’s Indiana Orthopaedic Hospital in July 2007. St. Francis alleges that in December 2008 it learned, via a press release, that Indiana Orthopaedic Hospital had purchased property four miles from the Indiana Orthopaedic Surgery Center and planned to construct a competing 75,000-square-foot surgery center and clinic. St. Francis claims it was never advised about Indiana Orthopaedic Hospital’s plans, which it argues violate their earlier deal.

On Dec. 23, St. Francis CEO Robert Brody sent an internal e-mail to all St. Francis physicians explaining the situation. In it, Brody said the lawsuit alleges a breach of fiduciary duty and constructive fraud on the part of OrthoIndy. It seeks both compensatory and punitive damages resulting from a criminal conspiracy and breach of contract.

“We have made numerous attempts to discuss, and resolve, the situation with OrthoIndy leadership,” Brody wrote. “To date, they have failed to engage in constructive dialogue regarding their plans to construct the competing facility. In fact, they continue to forge ahead in the process, despite the ramifications to patients and their partnership with St. Francis. OrthoIndy broke ground on their planned facility three months ago and it is expected to be completed in spring 2010.”

“We have reluctantly, but justifiably, chosen the only option available to us at this juncture.”

According to an OrthoIndy press release, the new Indiana Orthopaedic Hospital will be located at 1260 Innovation Parkway in Greenwood. It will feature 42 exam rooms, four operating rooms, physical therapy and MRI services as well as 21 OrthoIndy physicians. It was designed by Indianapolis-based BSA LifeStructures. Fishers-based Meyer Najem is the project’s construction manager. Indianapolis-based Hokanson Cos. Inc. and McCormack Development are also affiliated with the project.


  • Software
    buy Lytec it will increase your efficiency by utilizing medical management software services such as: electronic insurance filing, electronic patient statements, real time electronic insurance verification, electronic prescriptions, patient web portal and electronic EOB posting.
  • cherry pickers
    OrthoIndy cherry picks the high-profit cases and sends the low margin cases on to their "partners" like St. Vs and St. Francis. They basically turn away government plan members. I think this is what St. Francis is more worried about n terms of what this will mean for them with this new build.
    It's high time someone exposed OrthoIndy and their practices!
  • and your point is....
    With regard to Dr. Gudeman is involved...
    What point are you attempting to make?
  • An expert in one area..
    ...just because someone excels at their medical practice does not necessarily mean they conduct their business practices are at the same level.
  • Dr. Gudeman
    Dr. Gudeman is the best!
  • interesting
    Scott Gudeman is involved

    Post a comment to this story

    We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
    You are legally responsible for what you post and your anonymity is not guaranteed.
    Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
    No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
    We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

    Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

    Sponsored by

    facebook - twitter on Facebook & Twitter

    Follow on TwitterFollow IBJ on Facebook:
    Follow on TwitterFollow IBJ's Tweets on these topics:
    Subscribe to IBJ
    1. So much for Eric Holder's conversation about race. If white people have got something to say, they get sued over it. Bottom line: white people have un-freer speech than others as a consequence of the misnamed "Civil rights laws."

    2. I agree, having seen three shows, that I was less than wowed. Disappointing!!

    3. Start drilling, start fracking, and start using our own energy. Other states have enriched their citizens and nearly elminated unemployment by using these resources that are on private land. If you are against the 'low prices' of discount stores, the best way to allow shoppers more choice is to empower them with better earnings. NOT through manipulated gov mandated min wage hikes, but better jobs and higher competitive pay. This would be direct result of using our own energy resources, yet Obama knows that Americans who arent dependent of gov welfare are much less likely to vote Dem, so he looks for ways to ensure America's decline and keep its citizens dependent of gov.

    4. Say It Loud, I'm Black and Ashamed: It's too bad that with certain "black" entertainment events, it seems violence and thuggery follows and the collateral damage that it leaves behinds continues to be a strain on the city in terms of people getting hurt, killed or becoming victims of crimes and/or stretching city resources. I remember shopping in the Meadows area years ago until violence and crime ended make most of the business pack you and leave as did with Lafayette Square and Washington Square. Over the past 10 to 12 years, I remember going to the Indiana Black Expo Soul Picnic in Washington Park. Violence, gang fights and homicides ended that. My great grandmother still bears the scares on her leg from when she was trampled by a group of thugs running from gun fire from a rival gang. With hundreds of police offices downtown still multiple shootings, people getting shot downtown during Black Expo. A number of people getting shots or murdered at black clubs around the city like Club Six on the west side, The Industry downtown, Jamal Tinsley's shot out in front of the Conrad, multiple fights and shootings at the skating rinks, shootings at Circle Center Mall and shooting and robberies and car jackings at Lafayette Mall. Shootings and gang violence and the State Fair. I can go on and on and on. Now Broad Ripple. (Shaking head side to side) Say It Loud, I'm Black and I'm Ashamed.

    5. Ballard Administration. Too funny. This is the least fiscally responsive administration I have ever seen. One thing this article failed to mention, is that the Hoosier State line delivers rail cars to the Amtrak Beech Grove maintenance facility for refurbishment. That's an economic development issue. And the jobs there are high-paying. That alone is worth the City's investment.