Zia Sues Lovelace Over Radiology Dispute

Zia Diagnostic Imaging filed a lawsuit in Bernalillo County district court in October against Lovelace Health System. The complaint alleges that the hospital chain breached a five-year contract by recruiting Zia’s radiologists and failing to manage a cyberattack that disrupted imaging services.

The legal dispute centers on a 2020 agreement that made Zia the exclusive provider of radiology services at five Lovelace hospitals in Albuquerque. According to the filing, Lovelace extended job offers to three of Zia’s interventional radiologists in 2022. These specialists perform minimally invasive surgeries using imaging technology. The doctors left Zia in October 2023 to join Lovelace’s staff.

Zia argues that the move violated the contract’s exclusivity clause. The departing physicians began performing diagnostic radiology work as Lovelace employees. Jeffrey Hebert, Zia’s managing partner, stated that several other Zia radiologists resigned in hopes of securing positions at Lovelace. Hebert noted that four additional radiologists who left the firm did not join Lovelace but instead moved out of state. He attributed their departures to the contentious environment created by the threat of the initial group leaving.

The relationship between the two entities ended in the spring of 2024 when Zia terminated the agreement. Six radiologists remained at Zia until that point. All six eventually took jobs outside New Mexico. Zia no longer provides radiology services. The firm originally registered with the New Mexico Secretary of State in 2007 and entered its first exclusive agreement with Lovelace in 2008.

The lawsuit also addresses a cyberattack on Ardent Health, Lovelace’s parent company, in November 2023. The complaint states that Lovelace failed to mitigate the effects of the attack, which caused computer system outages lasting for months. Zia claims these outages violated contract clauses requiring Lovelace to provide adequate equipment and services. During the outage, Zia radiologists had to hand-write reports and transmit them via fax, phone, or in person.

The filing describes specific operational failures during the disruption. Patients were sent to scanners without identification bracelets or room numbers, leading to mislabeled images. The lawsuit states that hundreds or perhaps thousands of imaging studies were not provided to Zia providers for days, weeks, and months. By May 2024, Zia radiologists were still dictating reports for patients whose scans had been taken months earlier.

Bryan Davis, the attorney representing Zia, said the group sought to settle the dispute with Lovelace. Zia requested several million dollars in damages and proposed mediation. Lovelace declined to take the case to mediation. Davis said Zia plans to seek between $5 million and $7 million in damages if it wins the lawsuit. A spokesperson for Lovelace declined to comment, citing a policy against discussing pending legal matters.