- A federal lawsuit alleges North Carolina’s largest hospital chain illegally thwarted competition in the Charlotte area, limiting patient choice and driving up costs, The Charlotte Observer reported.
- According to the complaint, Carolinas Healthcare System used “unlawful contract restrictions” that barred Charlotte area insurers from suggesting that members use one of its competitors with lower prices.
- The contracts also encouraged insurers to promote use of CHS hospitals, and at least in one case stipulated an insurer in no way steer business away from CHS.
The U.S. Justice Department and NC Attorney General’s office filed the antitrust suit Thursday in the U.S. District Court for the Western District of North Carolina. It accuses CHS of employing the steering contracts with Blue Cross Blue Shield of North Carolina, Aetna Health of the Carolinas, Cigna Healthcare of North Carolina and United Healthcare of North Carolina, which together comprise 85% of the commercial market in the Charlotte area.
Known for having higher prices, CHS operates 10 hospitals in the region, including Carolinas Medical Center, and controls roughly half the market. It’s main competitors in the Charlotte area, Novant Health and CaroMont Health, both have significantly smaller market shares.
In a prepared statement, Renata Hesse, principal deputy assistant attorney general at DOJ, said, “This lawsuit will stop a dominant hospital from using its market power to undermine its smaller competitors’ efforts to attract patients by competing on the price and quality of their services.”
Lawyer Jim Cooney, who is representing CHS, told the Observer the health system’s contract provisions are not unique. “The system is being sued for something that takes place on a regular basis across the country,” he said.
CHS has vowed to fight the charges.