The Source Blog

Steering methods, where health plans are able to incentivize patients to choose high-value, cost-effective care can be critical to the financial health of these plans.  New York–Presbyterian Hospital is facing mounting legal and regulatory challenges over allegations that it sought to limit competition and prevent insurers from steering patients to lower-cost options.  On July 25, 2025, the Cement and Concrete Workers DC Benefit Fund, a self-funded union health plan, filed suit against The New York and Presbyterian Hospital, claiming that New York Presbyterian (NYP) engaged in various anti-steering efforts in violation of federal antitrust law that prevented the union from encouraging members to access more affordable care, costing the fund millions in allegedly overpriced care.  On July 28, 2025, the New York Times reported on a Department of Justice investigation of potential anticompetitive behavior by NYP with a subpoena referencing “potential unlawful agreement between NYP Health Care System and health insurance companies relating to steering restrictions and contracting conduct”.  Claims that NYP engages in restrictive trade practices have been reported on since at least 2018, and the claims being made are similar to those made against Sutter Health in California and Atrium in North Carolina.

Claims in the Cement and Concrete Workers Case

NYP is a healthcare system across the greater New York City metropolitan with more than 6,500 affiliated physicians, 20,000 employees and operates 4,000+ beds in total. Forbes lists NYP as having $13.3 billion in total revenue.  According to the lawsuit filed by the Cement and Concrete Workers DC Benefit Fund, NYP’s market power results from “its large size, significant barriers to entry in the market, the comprehensive range of healthcare services it offers, … and insurers’ need to include access to NYP’s hospitals—as well as its other facilities and providers—in at least some of their provider networks in insurance plans that cover people who live and/or work in New York City.”  Although NYP operates as a non-profit, the suit claims that the “CEO of NYP paid himself $63.7 million over the last five years of reporting, for an average of nearly $13 million per year…. NYP’s COO was the third highest-paid hospital executive in New York, with compensation totaling $7.3 million. Dozens of other executives at this ‘non-profit’ are paid over $1 million in compensation every year.”

Through plan design, health plans, like the Cement and Concrete Workers DC Benefit Fund, may "steer" patients toward higher-value care by directing them to providers that deliver comparable or better quality at lower cost.  This steering can reduce unnecessary spending while maintaining or improving outcomes.   The use of steering can significantly reduce costs for health plans and employers.   The successful use of anti-steering methods by health systems prevents plans from encouraging members to seek more cost-effective care, and ultimately force these plans to pay more for healthcare than they otherwise would.  The suit claims “NYP forces anti-steering restraints on all or nearly all Network Vendors and health plans”.   The suit asks the court to determine that NYP’s actions in imposing anticompetitive contract terms on health plans to be a restraint of trade in violation of the Sherman Act.

DOJ Making Similar Investigation

The New York Times reporting that the antitrust division of the Department of Justice (DOJ) is investigating NYP stems from a memo that 32BJ, a labor union representing over 175,000 building service workers in the Northeastern United States, sent to the the Justice Department as part of an ongoing dispute between 32BJ and NY.  The 2024 memo alleged that the hospital had engaged in anti-competitive behavior and that 32BJ’s “analysis of claims data demonstrated that NYP was consistently more expensive,” and that attempts to steer members to other hospitals were blocked by NYP.  Attempts to create a network that excluded NYP also proved challenging when they couldn’t find an insurer with a system that didn’t include NYP’s hospitals. The DOJ has now issued a subpoena to 32BJ as the start of an investigation. An investigation by the DOJ does not necessarily mean that any actual wrongdoing has occurred, but it shows that the DOJ will look into NYP’s alleged anticompetitive contracting practices.

Similarities to Sutter and Atrium Cases

The relationship between healthcare systems, insurers, and employers to build provider networks has recently drawn attention from antitrust investigators in two other locations: California and North Carolina.

In California, the Sidibe v. Sutter Health case has dragged on for over a decade, but is finally drawing to a close.  The plaintiffs in the suit claimed that Sutter Health restricted competition in the healthcare market by using provisions in its contracts with health plans, including “all-or-nothing” and anti-steering terms, to create healthcare monopolies and charge above-market prices, which were passed on to consumers.  A settlement was announced in March 2025, and includes $228.5 million in compensation.  Sutter was also involved in a nearly identical case in 2014 when employers and labor unions accused the Northern California health system of abusing its market power charging inflated prices, in violation of California’s antitrust law.  A similar suit filed by the California Attorney General was consolidated with this case.  The parties settled on the eve of trial in October 2019, with the final approval of the settlement agreement occurring in 2021.

Similarly, in June of 2016, the DOJ and the North Carolina Attorney General filed suit against Atrium Health claiming that the provider used anticompetitive, illegal anti-steering clauses in its contracts with insurers, which prohibited commercial health insurers in the Charlotte area from offering patients financial benefits to use less-expensive healthcare services offered by CHS’s competitors.  Atrium reached a settlement with the DOJ in November 2018, prohibiting Atrium from using or enforcing anti-steering provisions in its contracts with insurers.

Moving Forward

The DOJ investigation of NYP and related lawsuits could signal an expanded federal focus on anticompetitive contracting between hospitals and insurers. Expanded enforcement could bring contract terms like steering restrictions under scrutiny at other major hospital systems across the country. If anticompetitive contracting practices are curtailed, insurers gain more leverage to negotiate lower rates and steer patients toward more cost-effective care and result in lower costs for employers and patients.  In short, the review of NYP's insurer contracts could encourage greater contractual transparency and competition in hospital networks nationwide, encourage other hospital systems to reassess their contracting strategies, and empower insurers and purchasers to drive down costs and expand provider options.

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