Correction:
This story has been updated to reflect the fact that Health Assurance Transformation LLC, or HATCo, is backed by the venture capital firm General Catalyst.
The possibility that Summa Health’s sale to a firm backed by venture capital would harm doctors’ ability to have their student loans forgiven is the subject of a lawsuit filed last week by a doctor who said she was “compelled” to seek new employment to safeguard her eligibility for a federal loan forgiveness program that clears some student debts after a decade of payments.
In the suit filed Tuesday in Summit County Court of Common Pleas, Summa surgeon Kristina Gulotta said that the $485 million deal to sell Summa to Health Assurance Transformation LLC, or HATCo, a firm backed by the venture capital firm General Catalyst, and become a for-profit hospital “will have a profound and irreversible effect on Dr. Gulotta’s student loan repayment status.”
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She must seek new employment “that safeguards her current repayment benefits — a necessity directly caused by Summa’s decision to operate as a for-profit hospital system,” the suit said.
Gulotta asked in the suit that a noncompete clause in her contract that she said is keeping her from accepting another job be declared invalid and unenforceable. She also requested an injunction restricting the hospital system from “threatening or seeking enforcement of” the non-compete restriction.
The portions of Gulotta’s contract that relate to the student loan repayment are redacted in the suit, but the Public Service Loan Forgiveness Program lets borrowers who work for nonprofit agencies, such as Summa, have their Federal Direct Loans forgiven once they’ve made 120 qualifying monthly payments — likely the equivalent of a decade’s worth of loan repayment.
Anticipated for-profit status affects employees’ eligibility for federal loan forgiveness program
If Summa moves from a non-profit to a for-profit hospital, employees there would no longer be eligible for the federal loan forgiveness program.
A Summa spokesperson, Michael Bernstein, said in a statement the health system wouldn’t comment on the litigation. But he added that the loan forgiveness program “is not a Summa Health benefit” and is “a private matter between the federal government and individual participants.”
“We have made counselors available with expertise in assisting healthcare workers navigate personal and private student loans,” he wrote. “The services they provide are confidential, individual, voluntary and at no cost to employees.”
Gulotta, who specializes in breast surgery, started at Summa in 2020. She said in the lawsuit that she sought a new job in order to keep her loan-forgiveness benefits and found one at a hospital in Canton. That job would provide higher pay, more responsibilities and “most importantly” would preserve her current student loan repayment status, the suit said.
But the Summa contract Gulotta signed keeps her from practicing at any location within a 22-mile radius of her primary practice area for a year. The Canton hospital is 19.4 miles from Summa as the crow flies and a 22.1-mile drive, Gulotta said. She said she asked Summa not to enforce the non-compete restriction, but the hospital refused. She resigned, effective at the end of February 2025.
Neither Gulotta nor an attorney representing her responded to phone calls seeking comment about the suit or clarification about her plans upon resigning from Summa.
In filing the lawsuit, Gulotta said the restriction “is designed to discourage physicians like Dr. Gulotta from pursuing opportunities outside of Summa’s employment.”
The U.S. Federal Trade Commission announced a rule earlier this year banning noncompete clauses; a court has blocked the enforcement of that rule, and the FTC is appealing the decision.
An inability to take the Canton job in light of “Summa’s merger and the effect on Dr. Gulotta’s student loan repayment status will cause irreparable harm to Dr. Gulotta and her livelihood,” the lawsuit said.
“If the Non-Compete Restriction is enforced, Dr. Gulotta’s career would suffer significantly,” the suit said. “She will not have access to a hospital system at which she can treat patients. The advanced skills that Dr. Gulotta has developed to perform these procedures will erode if she does not perform them regularly. Dr. Gulotta’s career development almost certainly will be stunted.”