Atrium Health agrees to settle antitrust lawsuit over contract language

North Carolina-based Atrium Health reached a settlement with the Justice Department over what the DOJ called "anticompetitive steering restrictions" in its contracts. (Atrium Health)

North Carolina-based Atrium Health reached a settlement with the Justice Department over what the DOJ called "anticompetitive steering restrictions" in contracts between its providers in the Charlotte metropolitan area and commercial health insurers.

Formerly known as Carolinas HealthCare System, Atrium will resolve more than two years of civil antitrust litigation over contract provisions that blocked health insurers from promoting innovative healthcare benefit plans and cost-effective services to consumers if a court approves the deal. 

That deal includes an agreement barring Atrium from seeking contract terms or taking actions that would prohibit, prevent, or penalize steering by insurers in the future. It comes less than a month after Senate Judiciary Committee Chairman Chuck Grassley called for the Federal Trade Commission to examine "potentially anticompetitive contracting practices between insurers and hospital systems" including Atrium.

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“With healthcare costs rising, vigilant antitrust enforcement is an essential tool for protecting consumers,” Assistant Attorney General Makan Delrahim said in a statement. “By eliminating restrictions that curb comparison shopping and interfere with competition among healthcare providers, today’s resolution of our antitrust action allows consumers in the Charlotte area to benefit from the competition when making critically important healthcare choices.”

RELATED: Grassley calls for Federal Trade Commission to examine hospital, insurer contracting

In a statement, Atrium officials said the settlement involves no admission of wrongdoing on the part of Atrium Health and will not require the health system to pay any penalties or fines.

"The language in question is from contracts created as long ago as 2001 and was originally added to ensure Atrium Health was provided an equal opportunity to compete for patients," officials said in the statement. "As the healthcare landscape continues to rapidly evolve, Atrium Health’s contracting language has also evolved to reflect current healthcare practices."

The DOJ filed its civil antitrust lawsuit against Atrium in June 2016 alleging Atrium, the dominant hospital system in the Charlotte area, used its market power to restrict health insurers from encouraging consumers to choose healthcare providers that offer better overall value.

RELATED: Conflicts cause splits between hospitals and doctors in Maine, Minnesota

The health system has also been in the midst of expansion, planning to build new medical office space in a $250 million downtown space and a $116 million hospital building in Union County outside of Charlotte. In June, it announced it would increase its minimum wage from $11.50 per hour to $12.50 per hour for 7,500 staffers in the Charlotte area.

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