On November 15, 2018, the Antitrust Division of the U.S. Department of Justice settled a two-and-a-half year long lawsuit against Atrium Health, a North Carolina hospital system formerly known as the Carolinas HealthCare System, enjoining Atrium’s anti-steering provisions against health plans. This article discusses the DOJ/Atrium settlement in light of the recent Ohio v. American Express Supreme Court decision, which concerned anti-steering provisions in the two-sided credit card network services market. We previously reported on the DOJ’s suit against Atrium here, and analyzed the implications of the SCOTUS Amex decision on health insurance here.
Continue Reading U.S. Department of Justice Settles Anti-Steering Suit Against Hospital System; First Such Settlement After Amex SCOTUS Decision

On June 9, 2016, the Antitrust Division of the United States Department of Justice (“DoJ”) filed a complaint against the Charlotte-Mecklenburg Hospital Authority, d/b/a Carolinas Health Care System (“CHS”) in the United States District Court for the Western District of North Carolina. (United States of America and State of North Carolina v. Charlotte Mecklenburg Hospital Authority). The complaint accuses CHS of using “contract restrictions that prohibit commercial health insurers in the Charlotte area from offering patients financial benefits to use less expensive healthcare services offered by CHS’s competitors.” (Complaint, Preamble) In effect, the complaint is attacking a type of widely used contracting provision in which acute care hospital systems seek to prohibit insurance company payors from using “steering” restrictions, which would otherwise be used to steer their insured patients to lower cost healthcare providers, including lower-cost hospitals, in exchange for lower premiums in so-called “narrow network” insurance plans. The complaint then alleges that CHS has an approximately 50% share of the market for acute inpatient hospital care in the Charlotte metropolitan area, allegedly conferring market power on CHS.
Continue Reading U.S. Department of Justice Sues North Carolina Hospital System for Insisting on Anti-Steering Provisions in Insurance Reimbursement Contracts

By Heather M. Cooper

I. Introduction

Thanks to a recent federal district court decision, physicians and medical staff have more reason to think twice about price and other arrangements adopted by the practice associations and clinics to which they belong. Last Spring, the United States District Court for the Eastern District of California held that a hospital and a physicians practice association, and a hospital and the physicians that provide services to it under contract, may be sufficiently distinct separate economic actors capable of conspiring with each other under Section 1 of the Sherman Act.[1] The court denied a motion to dismiss a complaint that alleged that a hospital and two independent physician practice associations conspired to restrain trade in violation of Section 1 of the Sherman Act by prohibiting neonatologists who did not agree to practice exclusively at the hospital or refer cases to doctors practicing exclusively neonatology at the hospital, from using the hospital’s neonatal intensive care unit (“NICU”).
 

Continue Reading Federal Courts and Enforcers Diagnose Physician Practice Associations with Risk of Conspiracy Liability: Degree of Integration is Crucial to Challenges to Medical Network Price Agreements