Litigation

United States and the State of North Carolina v. The Charlotte-Mecklenburg Hospital Authority, d/b/a Carolinas Healthcare System

Date Filed: June 9, 2016
Status: Decided
District Court: Western District of North Carolina Charlotte Division – Case No. 3:16-cv-00311-RJC-DCK
Nature of Suit: Antitrust
Defendant Type: Provider
Plaintiff Type: Federal, State
Case Info: https://www.justice.gov/atr/case/us-and-state-north-carolina-v-charlotte-mecklenburg-hosptial-authority-dba-carolinas, https://www.perkinscoie.com/en/news-insights/five-things-to-watch-for-in-doj-s-carolinas-healthcare-system.html, https://sourceonhealthcare.org/carolnas-healthcare-highlights-doj-second-circuit-loss-in-anti-steering-case, http://sourceonhealthcare.org/litigation-and-enforcement-highlights-december-2018/
Court Document: https://www.bloomberglaw.com/document/X1Q6NMDN6PO2?fmt=pdf, http://src.bna.com/DgA

On June 9, 2016, DOJ and North Carolina AG filed a civil suit in federal court in North Carolina against Carolinas Healthcare System (later became Atrium Health). The complaint alleges that the provider uses anticompetitive, illegal anti-steering clauses in its contracts with insurers, which prohibit commercial health insurers in the Charlotte area from offering patients financial benefits to use less-expensive healthcare services offered by CHS’s competitors.

Defendants filed a motion for judgment on the pleadings, and supplemental briefing about a subsequently decided DOJ case challenging similar anti-steering provisions in American Express’ contract. Defendants argued that the Second Circuit decision to uphold similar contract provisions in the Amex case undermined the government’s claims (see Source blog post). The court denied the motion on March 30, 2017, finding that the DOJ plausibly alleged that the steering restrictions limited consumer choices and drove up insurance prices, and that the Amex case “involved a different product and a different market.”

Despite Supreme Court’s decision to uphold the Amex decision, Defendants reached a settlement with the DOJ in November 2018, prohibiting Atrium from using or enforcing these anti-steering provisions in its contracts with insurers.

See more coverage on DOJ case page and Five Things to Watch For in the case.

 


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