The U.S. Department of Justice, the North Carolina Office of the Attorney General and Atrium Health have come to an agreement in which the Charlotte, North Carolina-based health system won't use "anticompetitive steering restrictions in contracts" with payers and providers in the Charlotte area, the DOJ said.
The settlement resolves civil antitrust litigation involving Atrium's steering restrictions, which DOJ said prevented payers from "promoting innovative health benefit plans and more cost-effective healthcare services to consumers."
In response to the agreement, Atrium Health said the settlement doesn't include an admission of any wrongdoing on its part or proof that it violated the law. The health system was not penalized or fined.
The case deals with a relatively new target for the DOJ — steering restrictions.
Payers may create plans or narrow or tiered networks that drive members to high-quality providers or lower-cost doctors or facilities. The idea behind these practices is to increase care quality while pushing down spending.
DOJ alleged that Atrium used its market power as a dominant hospital system to stop payers from encouraging people to choose higher-quality providers.
The government filed the case in June 2016 when Atrium was called Carolinas HealthCare System. It claimed the health system was not allowing steering. Atrium is North Carolina's largest healthcare system and has nine general acute-care hospitals in the Carolinas and owns, manages or has affiliations with more than 40 hospitals in the two states. Its flagship facility, Carolinas Medical Center, is the largest hospital in the state.
Assistant Attorney General Makan Delrahim said in a statement that antitrust enforcement is key to protect consumers against rising healthcare costs. "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 competition when making critically important healthcare choices," Delrahim said.
U.S. Attorney for the Western District of North Carolina R. Andrew Murray said in a statement that the agreement will lead to people in the Charlotte area to get "appropriate, high-quality treatment" from providers "they choose at a fair price."
Atrium maintains that it did nothing wrong and noted the lack of penalty. The issue involved language in contracts created in 2001 that included the wording to provide "an equal opportunity to compete for patients," health system officials said.
We are pleased to announce that Atrium Health reached a settlement agreement with no admission of wrongdoing. We did not violate any law and will not pay any penalties or fines. https://t.co/N2QoougAr0— Atrium Health (@AtriumHealth) November 15, 2018
Payers are moving increasingly to tiered and narrow networks. They're also navigating members away from high-cost facilities, such as acute care hospitals, to lower-cost locations like freestanding emergency rooms and imaging centers, primary care physician offices, urgent care centers and retail clinics.
Moving more patients to those locations is seen as a critical piece of controlling healthcare costs, so DOJ is likely to continue to pursue anti-steering litigation in the coming years.