North Carolina files antitrust case against Carolinas Healthcare for allegedly stifling competition
The health system, however, said the issue is tied to language in its contract and not any real anti-competitive measures.
The Carolinas Healthcare system on Thursday was slapped with an antitrust suit by the state of North Carolina alleging that the system's Charlotte-Mecklenburg Hospital Authority used its large size to exert market power in dealing with commercial health insurers and to negotiate higher reimbursement rates for treating insured patients.
The complaint alleges that the health system acted unlawfully to preserve its dominance by imposing steering restrictions to prevent insurers from offering consumers a lower-cost provider.
Carolinas Health System, however, denied any wrongdoing and said the civil action regards a dispute over certain language in contracts between the hospital authority and insurance companies.
"Carolinas HealthCare System is committed to fair competition and looks forward to presenting our position in court," the health system said in a statement. "Our arrangements with insurers are similar to those in place between insurers and healthcare systems across the country. We have neither violated any law nor deviated from accepted healthcare industry practices for contracting and negotiation. In fact, we have been applauded by the United States government for the quality care and cost reduction programs we've implemented, programs it hopes to model in other parts of the country."
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Financial assistance to patients in need, medical education and research in the communities they serve and other mission-based services totaled over $1.65 billion, or 19 percent of total operating expenses, in 2015, the health system said.
The lawsuit claims Carolinas has long known that it has the reputation of being a high-priced healthcare provider. To protect its revenues, Carolinas aggressively uses its market power to keep consumers from taking advantage of better prices at other hospitals and from getting access to less expensive insurance policies, it said.
The lawsuit also alleges that Carolinas blocks consumers from receiving information about the cost and quality of its services.
Attorney General Roy Cooper filed the civil lawsuit filed Thursday in United States District Court in Charlotte.
Carolinas Healthcare System operates Carolinas Medical Center and nine other hospitals in the area. It has a 50 percent share of the market in Charlotte and approximately $8.7 billion in annual revenues, according to the North Carolina Department of Justice.
The Charlotte region is home to 2.6 million consumers.
North Carolina and the federal government are asking the court to bar the alleged illegal anticompetitive conduct by the health system.
Twitter: @SusanJMorse
