Dive Brief:
- Carolinas HealthCare System, the largest hospital system in North Carolina, has requested a federal court dismiss the recent DOJ lawsuit alleging it places “unlawful contract restrictions” on insurers.
- The June lawsuit argued Carolinas HealthCare's contracts prevent insurers from steering enrollees toward competing hospitals for reasons such as lower prices or better services, violating antitrust law.
- Carolinas HealthCare, meanwhile, has denied the DOJ's argument that it uses its market power to impose contractual terms on insurers, Modern Healthcare reported.
Dive Insight:
The outcome will be relevant across the industry given the types of agreements it is being targeted for employing are "similar to those in place between insurers and healthcare systems across the country,” as Carolinas HealthCare said in an earlier statement. It has since added that some of the contractual terms have been in place for a decade, Modern Healthcare noted.
However, the reasoning that a practice is consistent with "the way things have always been done" is not enough to protect it from new antitrust scrutiny, Robert Jaffe, Senior Litigation Counselor in Kutak Rock LLP’s Washington, D.C. office, previously told Healthcare Dive.
Jaffe added that to ensure payer-provider agreements are on the right side of the law, they should each leave the other party free to make decisions based on the patient’s needs, price, and quality, as opposed to contractual restrictions or market power.
The question is whether Carolinas did improperly wield its power as the dominant system in the Charlotte region with control of about half the market.