Saint Peter's Sues Competitor Over Diverted OB-GYN Practice
The lawsuit highlights how healthcare operators must manage practice transitions and protect sensitive revenue data.
Updated on Oct. 15, 2026 in Healthcare
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Saint Peter's Healthcare System has filed a lawsuit against RWJBarnabas Health and Dr. Maureen Cernadas, alleging a conspiracy to divert a key OB-GYN practice. The legal action follows the departure of nine physicians from the Brunswick Hills group, which previously contributed $28 million in annual revenue.
Why it matters
The lawsuit centers on claims that confidential operational and strategic data were misused to transition patients to a competitor. For healthcare operators, the case highlights the high stakes of managing physician practice transitions and protecting revenue streams after failed merger attempts.
The Brunswick Hills OB/GYN practice generated $28 million in net patient revenue for Saint Peter's in 2025 before nine doctors departed to form Mid-Jersey OBGYN. The system now seeks damages for the loss of this practice and the alleged unauthorized use of proprietary strategic plans.
The players
Saint Peter's Healthcare System
An independent regional healthcare organization based in New Brunswick that operates a university hospital.
RWJBarnabas Health
A large multi-hospital health system and major provider of medical services in New Jersey.
Dr. Maureen Cernadas
A former member of the Saint Peter's board of governors who served on the hospital staff for 30 years.
The details
Saint Peter's alleges that Dr. Maureen Cernadas, a former board member, utilized internal information to facilitate the transition of the Brunswick Hills group to RWJBarnabas Health. The complaint claims the defendants coordinated the move to divert patients while Cernadas still served on the board. This litigation follows the 2022 termination of a proposed merger between the two systems, which was abandoned after facing opposition from the Federal Trade Commission.
Timeline
2022: Saint Peter's and RWJBarnabas terminated merger plans.
2025: Brunswick Hills generated $28 million in net patient revenue.
April 2026: Dr. Cernadas resigned from the Saint Peter's board.
May 2026: Nine doctors left the Brunswick Hills group to form Mid-Jersey OBGYN.
October 14, 2026: Saint Peter's filed the lawsuit in New Brunswick.
Market Landscape
This litigation follows the 2022 FTC-prompted termination of a merger between Saint Peter's and RWJBarnabas Health. The current dispute signals an intensified period of market competition in New Brunswick following the collapse of that consolidation effort.
Operators managing physician groups should review their employment and confidentiality agreements to ensure adequate protection of proprietary practice data. It is prudent to consult with legal counsel to evaluate transition protocols for providers moving between competing health systems.
The takeaway
This case underscores the vulnerability of revenue streams when key physician groups undergo leadership transitions. Organizations should track the status of the upcoming March 2027 trial as a signal for future legal precedents regarding practice departures.
What happens next
A separate legal case involving Brunswick Hills physicians and RWJBarnabas Health is scheduled to proceed to trial in March 2027.
Further reading
For additional context on local industry developments, see Healthcare.
Source note: This article includes information reported by NJBIZ.
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