A federal judge has denied HCA Healthcare’s motion to dismiss antitrust litigation brought by North Carolina cities and counties related to the for-profit’s 2019 acquisition of Mission Health.
The ruling, signed Wednesday, relates to consolidated class-action complaints filed in 2022 by the city of Brevard, Buncombe County, the city of Asheville and Madison County. HCA and Mission Health, both listed as defendants, filed motions to dismiss the complaint later that year.
The local governments alleged that HCA had purchased Mission Health in order to obtain and “exploit” the monopoly power it had in the general acute care and outpatient markets of North Carolina’s Asheville region and the surrounding counties. Mission Health had been able to secure its market strength under Certificate of Public Advantage (COPA) regulations that were repealed on Jan. 1, 2018.
That monopoly power has allowed HCA to use “anti-competitive provisions” when contracting with insurance plans, the plaintiffs alleged, including “all-or-nothing provisions,” “anti-steering” and “anti-tiering” provisions and “gag clauses.” The company has also raised prices faster than others across the state, discontinued certain services and reduced staffing, according to the complaints.
The plaintiffs’ consolidated complaints alleged unreasonable restraint of trade and unlawful monopolization, both violations of the Sherman Antitrust Act.
HCA and Mission's motions to dismiss the consolidated class action argued that the allegations fell outside of a four-year statute of limitations, that the allegations did not plausibly assert anticompetitive conduct and that the alleged monopoly power was lawfully acquired under the now-expired COPA. U.S. District Judge Martin Reidinger set aside each of the arguments in his ruling.
In a statement to the Citizen Times, Asheville Mayor Esther Manheimer said that the city and other plaintiffs “remain resolute in our intention to put an end to HCA’s monopoly over our local healthcare system.”
Mission Health, in statements to reporters, reiterated its intention to “vigorously” defend itself against the allegations.
HCA has been in the hot seat for its handling of Mission Health facilities since the acquisition by way of watchdog reports, litigation and regulator warnings.
Late last year, North Carolina Attorney General Josh Stein sued the 186-hospital system for allegedly reneging on commitments it made when acquiring Mission to preserve certain services for at least a decade. More recently, the system’s Memorial Mission Hospital in Asheville was hit with an “immediate jeopardy” warning notice from the Centers for Medicare & Medicaid Services over incidents inspectors noted where patients were at risk of serious harm while in the hospital’s care.
Nashville, Tennessee-based HCA celebrated strong fourth-quarter earnings last month and a $5.2 billion net income for 2023.