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NEWCO Oregon alleges Oregon Health Authority collusion with existing businesses

NEWCO Oregon, the group looking to build a psychiatric hospital in Wilsonville, served Oregon Health Authority with a tort claim notice Wednesday, Aug. 16, claiming the agency engaged with existing companies to delay or deny entry to new competitors. The claim comes after OHA denied NEWCO Oregon's request for a certificate of need July 6.

The letter also states that NEWCO Oregon will file claims against the State of Oregon for allegedly "creating unnecessary and/or artificial barriers to the entry and expansion of health care facilities, unnecessarily and artificially limiting the availability of inpatient psychiatric hospital facilities, promoting anti-competitive collusion between (Portland-area) hospital monopolies, facilitating anti-competitive agreements, (and) limiting consumer choice" among other alleged violations.

NEWCO Oregon — which is a part of Universal Health Services — was hoping to build a 62,000-square-foot psychiatric hospital with 100 beds on 8.72 acres at the intersection of Boones Ferry and Day roads. The proposed facility, which would be called Willamette Valley Behavioral Health, was unanimously approved by Wilsonville City Council in March of 2016.

A certificate of need is required by Oregon Health Services for any new hospital in Oregon, with OHA acting as the decision-making authority. OHA's rejection of the certificate of need came two weeks after NEWCO filed a lawsuit June 23 to expedite the decision-making process.

NEWCO's request for a certificate of need was originally denied Feb. 24, when OHA stated that NEWCO had failed to meet its burden of proof to justify the need for the facility, prompting NEWCO to file for an informal hearing to reconsider. That hearing took place March 17, but OHA delayed its decision multiple times, leading to the June 23 lawsuit and subsequent denial July 6.

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

The claim comes just a week after OHA Director Lynne Saxton resigned at the request of Gov. Kat Brown Aug. 8. That resignation stemmed in part from a failed communication plan that was meant to influence lawmakers to plant negative articles about FamilyCare, a nonprofit tasked with delivering health care to members of the Oregon Health Plan, according to reports from Pamplin Media Group.

Oregon law requires parties to provide at least 180 days' notice to state agencies before filing a lawsuit. NEWCO's letter indicates that it has incurred "substantial damages," which will be formally asserted and quantified when the official claim is filed.

Officials from OHA said they could not comment at this time as it is pending litigation.

Contact Wilsonville Spokesman reporter Andrew Kilstrom at 503-636-1281 ext. 112 or This email address is being protected from spambots. You need JavaScript enabled to view it..

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