Dive Brief:
- OhioHealth has reached a proposed settlement with state and federal regulators over allegations that the Columbus, Ohio-based system strong-armed insurers into anticompetitive contracts.
- The deal announced Tuesday voids problematic OhioHealth contracts and prevents the system from seeking such terms in the future, according to the Department of Justice.
- OhioHealth, which has maintained its contracting practices are legal, did not have to admit wrongdoing as part of the settlement. The system also will not pay any penalties or fines.
Dive Insight:
The DOJ and Ohio’s attorney general sued OhioHealth in February, accusing the regional nonprofit of leveraging its market dominance to force insurers to include its providers in their networks — even if those providers were costlier than competitors. As a result, OhioHealth was able to get away with charging higher prices than other systems, especially in the Columbus metropolitan area, where the system controls a large swath of acute care services, the DOJ said.
The suit sought to block OhioHealth from enforcing those contract provisions and from retaliating against insurers that attempted to introduce more “budget-conscious” plans — terms that the system agreed to in Tuesday’s settlement. The deal also appoints a monitor to ensure OhioHealth’s compliance over the next five years.
“Providing affordable healthcare to Americans is uncontroversial and this Department of Justice will not tolerate corporate prioritization of revenue in contravention of our antitrust laws,” Stanley Woodward, the U.S. associate attorney general, said in a statement.
OhioHealth said it agreed to the settlement to avoid the costs of drawn-out litigation. No insurer has ever taken issue with the contract language in question, which dates back two decades and was designed to protect the system from “specific insurance company practices common at the time,” the system said in a press release.
But “since then, both the healthcare and insurance landscapes have changed,” OhioHealth acknowledged.
The settlement is proposed and still needs to be approved by Ohio’s southern district court.
OhioHealth operates 16 hospitals in the state in addition to outpatient facilities, physician groups and other clinics. Unlike some of its regional nonprofit peers, OhioHealth has recently posted relatively high operating margins, including a 10% margin in its 2025 fiscal year. That’s compared to an average nonprofit hospital margin of 1.1%, according to Fitch Ratings.
Under the Trump administration, federal regulators have revitalized interest in scrutinizing contracts between payers and providers that they believe stymie cost-effective healthcare plans. In March, the DOJ filed a suit against NewYork-Presbyterian over alleged anticompetitive restrictions in the New York City-based hospital system’s contracts with insurers.
That focus at the federal level was last seen in 2016, when the DOJ sued Carolinas HealthCare System, now Atrium Health, over the system’s contracting practices with insurers, according to law firm Morgan Lewis. Still, there have been high-profile instances of settlements over “all or nothing” contracts in the states, including one between Sutter Health and California regulators in 2019.
