Mental Health Provider NEWCO Oregon Inc. Pursues Antitrust Lawsuit Against Oregon Health Authority

Tort claim notice alleges OHA promoted anti-competitive collusion between Portland-area hospital monopolies

PORTLAND, Ore., Aug. 16, 2017 (GLOBE NEWSWIRE) -- A mental health provider seeking to build a psychiatric hospital in Wilsonville, Oregon has served the Oregon Health Authority with a tort claim notice, charging the agency with having engaged with or allowed existing companies “to exploit the market and thwart and/or delay entry by new competitors” in its review of an application submitted by NEWCO of Oregon to build the hospital. 

A PDF accompanying this announcement is available at

The letter also provides notice that NEWCO will file claims against the state for allegedly “creating unnecessary and/or artificial barriers to the entry and expansion of health care facilities, unnecessarily and artificially limiting the availability of in-patient psychiatric hospital facilities, promoting anti-competitive collusion between (Portland-area) hospital monopolies, facilitating anti-competitive agreements, limiting consumer choice” and other violations.

The Willamette Valley Behavioral Hospital in Wilsonville is a proposed psychiatric hospital that would treat both adults and adolescents. OHA recently denied the hospital’s certificate of need (CON) application, claiming the Portland area does not have a need for more inpatient mental health beds, despite the state’s dead-last ranking in readiness to treat mental health.

Even absent the alleged manipulation by the OHA of the process, “Certificate of Need” laws like Oregon’s have come under fire by the Federal Trade Commission and Department of Justice, which have both urged states to abandon the practice over similar antitrust concerns. As recently as April 2017, the agencies stated in a joint letter that “CON laws can restrict entry and expansion, limit consumer choice, and stifle innovation. Additionally, the CON process can be exploited by incumbent firms to thwart or delay entry by new competitors … harming free markets and consumers.”

Mental Health America recently placed Oregon last in providing mental health services for those who need them the most. Experts recommend that states provide at least 40 inpatient beds per 100,000 residents. Oregon has fewer than half that number.

“Oregon continues to rank last in the nation for its readiness to treat mental health,” said Jason Conger, an attorney at Lynch Conger McLane LLP, who represents the company. “For OHA to say there is ‘no need’ doesn’t even come close to passing the smell test.”

Oregon law requires injured parties to provide at least 180 days’ notice to state agencies before filing a lawsuit. NEWCO’s notice indicates that it has incurred “substantial damages,” which will be formally asserted and quantified at the time of filing. 


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