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Rep. Mark Wright, R-Covington.

Ochsner Health System lost the first round of a legislative battle with Our Lady of the Lake Regional Medical Center, physicians groups and other hospitals over the use of non-compete provisions in doctors’ contracts Monday, with a Louisiana House panel advancing two proposals aimed at restricting the practice.

The House Commerce Committee advanced House Bill 483, by Covington Republican Rep. Mark Wright, to restrict the use of non-compete agreements for physicians. The bill is backed by the Louisiana State Medical Society and the Franciscan Missionaries of Our Lady, which oversees Our Lady of the Lake, among others.

Ochsner Health System is a staunch believer in non-compete agreements, deploying them regularly with physicians they employ. Ochsner and other defenders of the practice say it lets hospitals like Ochsner limit risk, ensuring they aren’t investing big money into training and supporting doctors only to see them leave and take their patients to another nearby clinic.

Backers of Wright’s bill counter that non-compete agreements force doctors out of the state, especially as Ochsner has grown its footprint to include a wide swath of Louisiana. Many of the provisions say that once an Ochsner doctor leaves, they can’t work for two years in any parish where Ochsner has a presence. Wright called the situation “untenable” for doctors and said his bill represents a compromise.

“A doctor who was employed for 10 or even 20 years who resigns or was terminated must leave their home for a period of two years in order to continue the practice of medicine,” said Dr. Katherine Williams, head of the Louisiana State Medical Society.

Dr. Robert Hart, chief medical officer at Ochsner, said his company makes big investments in its doctors, and noted that doctors usually have their lawyers review the provisions before signing.

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"The physicians do have attorneys when they come in. They’re educated people ... everyone that recruits against us uses that as a tool to dissuade people from joining us. We’re willing to make that sacrifice. We lose some people because of our non-compete.”

Wright’s bill would put several limits on non-compete agreements, including a time limit and a buyout provision for certain doctors. It would also exempt rural hospitals that use non-competes from the limits; rural hospital operators wanted to keep the ability to use the provisions.

Legislative leaders, including Senate President Page Cortez, had tried to get Ochsner and Our Lady of the Lake, as well as other opponents of non-competes, to come to the table ahead of the session to work out a deal. But the two sides never reached an agreement.

The panel also advanced House Bill 561, by Rep. Larry Bagley, R-Stonewall, that would ban the use of non-compete agreements for public institutions. That was in response to the use of non-competes by LSU Health Sciences Center Shreveport, which has partnered with Ochsner.

LSU even sued an OB-GYN doctor this year after she left the public teaching hospital to work at Willis-Knighton. A judge ruled against LSU in the case.

Gov. John Bel Edwards, a Democrat, hasn't taken a position on the bill. Spokesperson Christina Stephens said the bill will likely change before arriving at his desk. 

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