DOJ sues Carolinas HealthCare over antitrust concerns

Lawsuits stories

The U.S. Department of Justice has filed a civil antitrust lawsuit against the Carolinas HealthCare hospital system, claiming it manipulated market conditions in Charlotte, North Carolina in its favor.

Carolinas--the largest healthcare system in North Carolina and one of the largest not-for-profit healthcare systems in the country--required “steering clauses” in its contracts with insurers, according to a DOJ announcement about the lawsuit. This barred the carriers from encouraging patients to use lower-cost providers with potentially improved outcomes, the DOJ claimed.

“Americans should be able to choose a healthcare provider that gives them and their families the most cost-effective and appropriate treatment,” said Principal Deputy Assistant Attorney General Renata B. Hesse, head of the Justice Department’s Antitrust Division, in the statement. “This lawsuit will stop a dominant hospital from using its market power to undermine its smaller competitors’ efforts to attract patients by competing on the price and quality of their services.”

Carolinas has denied the charge, issuing a statement on Thursday saying it has “neither violated any law nor deviated from accepted healthcare industry practices for contracting and negotiation,” The Charlotte Observer reported.

Federal regulators have become more active in taking antitrust actions against hospital business activities in recent months, although most of its lawsuits have been against hospitals seeking merger partners. One of the biggest deals the feds have tried to stop is the merger between Advocate Health Care and NorthShore University HealthSystem in the Chicago area.

In addition to the legal action by the Justice Department, the chair of the Federal Trade Commission has also expressed concern about the mergers, claiming they could have a negative impact on both pricing and healthcare delivery.

There are already restrictions on physician-owned hospitals in place in order to discourage the steering of patients--and the hospital sector has been fairly zealous in making sure they remain in place.

Carolinas has denied the charge, issuing a statement on Thursday saying it has “neither violated any law nor deviated from accepted healthcare industry practices for contracting and negotiation,” The Charlotte Observer has reported.

- read the DOJ statement
- check out The Charlotte Observer article

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