Pediatric specialty clinic to close following settlement

A settlement in a federal trade secrets case will force a Madison health care center that treats children with complex medical conditions to close by the end of the year and prohibit its founding doctor and CEO from practicing medicine in Mississippi ever again. 

The Oct. 18 agreement concludes a seven-year legal battle between the University of Mississippi Medical Center and the Mississippi Center for Advanced Medicine that began after pediatric hematologist Dr. Spencer Sullivan, the former director of UMMC’s Children’s Hemophilia Treatment Center, struck out to form the private, for-profit medical organization in 2016. 

Three doctors who practiced at the Mississippi Center for Advanced Medicine will form a new private practice in Flowood next year, according to business filings and the clinic’s website. 

The center served over 9,500 patients from every Mississippi county in 2022 and employed over 100 staff members during the 2023 fiscal year, according to a recent court filing. The clinic provides subspecialty medical care, including hematology, pediatric cardiology and pediatric rheumatology, and operates a clinical pharmacy and pediatric urgent care.

Mississippi has just under 18 specialty pediatricians per 100,000 children, the lowest rate in the Southeast and the third lowest in the country, according to data from The American Board of Pediatrics. 

The center served as a safety net for pediatric subspecialty care in 2022 when UMMC went out of network with Blue Cross Blue Shield, the state’s largest provider of private health insurance. 

The legal conflict between the Mississippi Center for Advanced Medicine and UMMC began in state court, but after new evidence was uncovered in 2018, UMMC filed a lawsuit in federal court alleging that Sullivan and the Center for Advanced Medicine violated federal trade secrets law by utilizing confidential patient and hospital financial information to open the new health center. 

Judge Carlton Reeves ruled in favor of UMMC in October 2021 in federal court, writing that evidence in the case “reveals a clear, persistent pattern of perjury, evidence destruction, and concealment.” A trial on damages was delayed several times before the parties reached a settlement agreement in October. 

Sullivan will be forced to relinquish his Mississippi medical license for life and close all clinic locations in Mississippi by Dec. 31. The Mississippi Center for Advanced Medicine must “indicate that UMMC is the institution in Mississippi that can best meet the patients’ medical care and pharmacy needs” in a letter notifying patients it is closing, according to the agreement. 

Sullivan and the Mississippi Center for Advanced Medicine will be liable for $28.3 million if any terms of the contract are breached. 

The center filed for bankruptcy in April 2023, and submitted a plan of liquidation in accordance with the terms of the settlement agreement on Oct. 31. Since opening, the center has either lost money or yielded a modest profit and faced various financial struggles, including loss of physicians to private practice and legal fees, according to the plan of liquidation. 

Sullivan declined to comment for this article, and UMMC did not respond to questions from Mississippi Today. 

Pediatric hematologist and oncologist Dr. Sharon Pennington, the Chief Medical Information Officer for the Mississippi Center for Advanced Medicine, is listed as the registered agent of a new private practice in Flowood, shows a business filing publicly available on the Secretary of State’s website. 

The clinic will open in January 2025. Dr. Whitney Herring and Dr. Michael Mattingly, medical directors for pediatric metabolic medicine and pediatric and fetal cardiology at the Mississippi Center for Advanced Medicine, respectively, will also join the clinic, according to its website. 

Pennington and Mattingly declined to comment for this story. Herring did not respond to Mississippi Today by press time. 

A legal saga

One year after Sullivan left his post at UMMC to form the Mississippi Center for Advanced Medicine, UMMC filed a lawsuit in state court alleging that he had violated the terms of his contract, including a non-compete clause, causing damages to the hospital. UMMC alleged that Sullivan was motivated to leave after he learned of the Hemophilia Treatment Center’s high revenue. 

In Sullivan’s employment contract with UMMC, he agreed not to engage in a clinical practice within a 25 mile radius from UMMC, hire recent UMMC employees or use any patient information or lists to encourage them to leave UMMC after departing the hospital.

UMMC alleged that Sullivan took 80% of the patients he treated while practicing at UMMC to his new clinic which he staffed with UMMC employees, including pediatric rheumatologist Dr. Nina Washington, his codefendant in the case. 

Children’s of Mississippi at UMMC is the state’s only dedicated children’s hospital and offers a wide range of pediatric subspecialty care. Each year, the hospital treats about 150,000 children, the majority of whom are enrolled in Medicaid.  

Sullivan and Washington argued in a counterclaim that the Hemophilia Treatment Center facilities and staffing were “woefully inadequate,” and that mold and cockroaches were “pervasive.” They contended that because of the poor conditions of their employment, UMMC, too, had breached the terms of its contracts.

An amended complaint filed by UMMC in November of 2017 broadened the hospital’s allegations against Sullivan, alleging that Sullivan had obtained a confidential patient list and financial information which he used to solicit patients and establish the Mississippi Center for Advanced Medicine. 

After an article about the lawsuit appeared in the Clarion-Ledger in 2018 that referenced the confidential patient list, the ex-husband of Linnea McMillan, a nurse who left UMMC to join Sullivan’s practice, turned a printed patient list he found in McMillan’s car in 2016 over to UMMC. 

The discovery prompted UMMC to file a federal trade secrets lawsuit in June 2019, naming Sullivan, the Mississippi Center for Advanced Medicine, McMillan and former UMMC staff members Kathryn Sue Stevens and Rachel Henderson as defendants. 

Sullivan directed McMillan and Stevens to compile the patient list in the spring of 2016 while working at UMMC as he prepared to open his new practice, alleged UMMC in the lawsuit. 

Defendants denied taking or using the list until March 2020, when Henderson admitted that she lied in her deposition, and along with Sullivan, Stevens and McMillan, possessed and used the list at the Mississippi Center for Advanced Medicine. 

She also produced nearly 1,500 pages of previously unproduced text messages, which revealed that Harris, Stevens and McMillan shredded the patient list to conceal evidence in the case. 

Henderson was dismissed from the case after coming forward with new information.

Sullivan committed perjury by falsely claiming he did not possess an external hard drive with files from UMMC, determined the federal judge. Sullivan produced the drive only after a magistrate judge forced him to choose between producing the hard drives or his computer. 

“A review of the voluminous record in the case reveals a clear persistent pattern of perjury, evidence destruction, and concealment,” wrote Reeves in his default judgment in favor of UMMC.