Justice Department and North Carolina Sue Carolinas Healthcare System to Eliminate Unlawful Steering Restrictions
Anticompetitive Restrictions Bar Insurers from Steering Patients to Lower-Cost Competing Providers
The Department of Justice today filed a civil antitrust lawsuit against Carolinas HealthCare System (CHS), challenging CHS’s practice of imposing steering restrictions in its contracts with commercial health insurers in the Charlotte, North Carolina, area.
The Antitrust Division and the state of North Carolina filed the lawsuit in the U.S. District Court for the Western District of North Carolina. The complaint alleges that CHS, with its approximately 50 percent share in the sale of acute inpatient hospital services to health insurers in the Charlotte area, has used its market power to require steering restrictions in its contracts with every major insurer. These provisions have prevented insurers from, among other things, introducing health plans that encourage patients to use medical providers that offer lower priced, higher-quality services.
“Americans should be able to choose a healthcare provider that gives them and their families the most cost-effective and appropriate treatment,” said Principal Deputy Assistant Attorney General Renata B. Hesse, head of the Justice Department’s Antitrust Division. “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.”
“Today’s enforcement action seeks to ensure that consumers in the Charlotte area will benefit by identifying the more cost-efficient, quality providers when making the critically important decision of selecting a doctor or hospital,” said U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina. “In these times of escalating health care costs, vigilant antitrust enforcement in local healthcare markets such as the Charlotte area is essential to protecting the interests of consumers.”
CHS is the largest healthcare system in North Carolina and one of the largest not-for-profit healthcare systems in the United States. In 2014, CHS had net operating revenue of about $8.7 billion.