A federal judge has ruled that an antitrust lawsuit against Carolinas HealthCare can move forward, a significant setback for the health system.
The Department of Justice and North Carolina Attorney General’s office filed the suit in June alleging that Carolinas manipulated market conditions in Charlotte to its benefit. The system, North Carolina’s largest and one of the largest nonprofit systems in the U.S., required “steering clauses” in contracts with payers, according to the lawsuit, which prevented insurers from encouraging patients to seek care at lower-cost facilities.
On March 30, Judge Robert Conrad rejected Carolinas request that the case be dismissed. In its filing, the health system said that the DOJ had failed to show in its complaint that those contract provisions actually lessened regional competition, according to The National Law Review. However, Conrad ruled that it is possible that Carolinas did violate antitrust law, as the suit is “full of reasons to believe” that the system’s actions could have hindered competition.
However, the ruling also noted there were not enough facts to render a final decision on the case.
In a statement to the Charlotte Observer following the ruling, Carolinas indicated it intends to the see the case through. The ruling may not have dismissed the DOJ’s claims, but it did note that Carolinas presented a strong case against the allegations, it said in the statement.
“Carolinas HealthCare System has not violated the antitrust laws and we look forward to further supporting our position in court,” the system said.
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Federal agencies have been increasingly willing to wade into healthcare issues on antitrust grounds, particularly with ongoing healthcare merger-mania. For instance, the Federal Trade Commission sued to block a merger between two large Chicago-area systems, Advocate HealthCare and NorthShore University Health System, in 2015, and a judge’s ruling in March was the final nail in the coffin for that deal.
Then-FTC Chair Edith Ramirez said in May 2016 that she was “very concerned about the rapid rate of consolidation among healthcare providers.”
Increased consolidation could hinder competition, she said.