Geisinger Health is asking a federal court to block AtlantiCare Health System, Inc. from severing its six-year association with the Pennsylvania-based health system.
Geisinger filed the federal lawsuit in U.S. District Court in Pennsylvania Thursday. The lawsuit seeks to block an AtlantiCare board of directors vote in September that ended their affiliation.
The lawsuit also names AtlantiCare, chairman Michael Charlton, and CEO Lori Herndon. Both Charlton and Herndon convinced board members to vote to end the relationship, the lawsuit alleges.
AtlantiCare is “hopeful that we can resolve this matter to the satisfaction of all involved in the best interests of our patients and their families, our staff and the broader communities we serve," said Jennifer Tornetta, director of Media Relations and Public Affairs.
“Although we deny the assertions in the Complaint, we continue to engage in discussions,” Tornetta said.
In its statement Saturday, Geisinger said, “The complaint filed in federal court on Thursday is related to discussions about the future status of the relationship between Geisinger and AtlantiCare. We continue to engage in discussions and are hopeful that we can resolve this matter to the satisfaction of all involved.”
Geisinger’s lawsuit alleges AtlantiCare is still legally bound to the 2014 agreement. That agreement allowed AtlantiCare to terminate within 10 years, but only if Geisinger became controlled by a for-profit organization, or affiliated with a religious organization. Neither has happened, the lawsuit states.
Geisinger operates 13 hospitals and two research centers, according to the complaint.
AtlantiCare includes one hospital with two campuses in Atlantic County and more than 100 other locations throughout five counties.
Geisinger claims the agreement helped AtlantiCare get back on better financial ground. As part of the deal, the New Jersey health care system had to rebrand itself as a subsidiary of Geisinger.
By 2014, prior to the merger, the hospital was rated A1/A+/A+ from Moody’s, S&P and Fitch’s, respectively, according to July 2014 minutes of the New Jersey Health Care Financing Authority.