Asante files suit over imaging center contract

In response to a clash over a joint venture by Medford hospitals to provide medical imaging, Asante Health Systems, the parent company of Rogue Valley Medical Center, countersued its partners in Oregon Advanced Imaging LLC.

Last week Providence Medford Medical Center sued Rogue Valley Medical Center for breach of contract, claiming RVMC abruptly terminated its participation in Oregon Advanced Imaging after initially agreeing to extend the effort five years. Providence sought an injunction so Jackson County Circuit Court would take control of the dissolution of the imaging operation while fair value can be set for its assets and appropriate provisions can be made to preserve services for patients.

On Thursday, Asante countered that Providence and Medford Radiological Group, another partner in the venture, violated the spirit of contract with their plans to have MRI equipment at a new medical office Providence is building in Central Point.

The project would compete directly with Oregon Advanced Imaging and harm it, said Scott Kelly, an Asante vice president in charge of business development and strategic planning.

It also shows that combined efforts are no longer required to bring top medical imaging technology to the Rogue Valley and the joint project, originally set to end this month, should dissolve as scheduled, he said.

The two hospitals teamed up in 1987 to provide high-tech medical imaging service such as MRIs and CT scans. They formed Oregon Advanced Imaging in 2002 along with the radiologists of Medford Radiological Group.

The original five-year agreement is set to end July 28. Asante informed its partners on July 3 that it didn't want to continue participation, company officials said Friday after Kelly said that claim wasn't true in a Mail Tribune story earlier this week.

Providence and the radiology group previously said the announcement surprised them, as all the partners agreed to buy a new $2.5 million MRI scanner in January and the machine was installed June 25.

"There is no valid reason for OAI to close at the end of the month," Providence CEO Tom Hanenburg said. "All three partners voted in January to get the new MRI and thought the intent was to continue the partnership."

Hanenburg said plans for Providence's expanded clinic in Central Point had been previously announced and didn't violate the OAI operating agreement, which only prevented other partnerships in Medford. He compared the Central Point plans to RVMC's partnership with a group of radiologists to operate an imaging center in Ashland.

Dr. Michael Troychak, president of Medford Radiological Group and OAI, said that while imaging services have proliferated in the Rogue Valley, OAI has the most technologically advanced equipment and all three partners had agreed it was necessary.

He noted that as physicians, not businessmen, the radiologists want to focus on providing care and will strive to continue working with both hospitals.

Both hospitals also touted their commitment to continuing patient access to imaging services.

"Our goal is to provide uninterrupted services to patients while we go through an orderly dissolution," Asante's Kelly said.

He estimated that negotiations over equipment and property could be resolved with a 90-day extension, and a five-year continuation is unnecessary.

Hanenburg said that Providence wants to make sure the imaging partnership isn't closed until partners make a plan for its future.

"The emphasis is on not interrupting service for patients," he said.

The case will have a hearing Monday in Jackson County Circuit Court.

Reach reporter Anita Burke at 776-4485 or at

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