- Advocate Aurora Health is facing allegations of unlawfully using its market power in Wisconsin to raise healthcare prices, according to a federal lawsuit filed Tuesday.
- Uriel Pharmacy Health, a Wisconsin business with a self-funded health plan, filed suit Tuesday in the Eastern District of Wisconsin, alleging the Midwest system overcharged for services and forced employers into "all-or-nothing" contracting, requiring all of Advocate Aurora's facilities to be included in-network.
- Advocate Aurora said in a statement it is "mounting what will be a vigorous defense as all of our decisions are guided by a relentless pursuit to provide the highest quality, affordable care for our patients."
The lawsuit alleges Advocate Aurora Health has used a number of anticompetitive practices to inflate healthcare prices at a cost to Wisconsin businesses.
Restrictive contracting terms have prevented employers from curbing costs, the lawsuit, which is seeking class action status, claims.
Advocate Aurora has allegedly gone to "extraordinary lengths" to limit insurance products that seek to exclude certain Advocate Aurora Health facilities that could save employers money. Instead, Advocate Aurora requires all-or-nothing contracting, meaning if one facility is in-network, all Advocate Aurora facilities must be included in an employer's insurance network.
As a result, these anticompetitive contracts allow Advocate Aurora to charge higher prices than competitors, according to the lawsuit.
The price for a hip or knee replacement at an Advocate Aurora facility in Milwaukee is $62,538, more than $21,000 above a competitor's price five minutes away, the lawsuit alleges.
Advocate Aurora's outsized presence in local markets in turn leads to a "systemwide power that gives it market power over its entire service area," according to the lawsuit. Advocate Aurora operates hospitals across Illinois and Wisconsin.
“Our complaint alleges that Advocate Aurora’s anticompetitive conduct has unlawfully taken huge sums of money from the pockets of Wisconsin employers to fund the hospital system’s never-ending expansion across the country,” said Jamie Crooks, managing partner of Fairmark Partners, LLP, which represents the plaintiffs.
The lawsuit comes on the heels of Advocate Aurora's announcement that it is merging with Atrium Health to create one of the nation's largest health systems with $27 billion in revenue.
The deal would create a 67-hospital system that spans six states across parts of the Midwest and the South.
All-or-nothing contracting caught the attention of the former California attorney general after Sutter Health faced a similar suit brought by a grocer's union in 2014.
HHS Secretary Xavier Becerra, then California AG, reached a $575 million antitrust settlement in 2019 with Sutter that barred the system from engaging in the all-or-nothing contracting among other conditions.