Justice says hospital misused market clout
In the first lawsuit brought by the U.S. Justice Department alleging anticompetitive unilateral conduct in 11 years, a hospital system in Wichita Falls, Texas, stands accused of using illegal monopolistic tactics by inhibiting insurers with which it has contracts from striking contracts with the system’s competitors. According to a proposed settlement of the allegations released by the Justice Department, the 297-bed United Regional Health Care System used its dominant market position to force insurers to agree to pay significantly higher rates to United Regional if the payers contracted with the system’s competitors. United Regional controls 90% of the general acute-care in the Wichita Falls market, 65% of the outpatient surgical services market, a Justice Department news release said. The proposed settlement, if approved, would for seven years prohibit United Regional from using agreements that inhibit insurers from contracting with the system’s competitors, including conditioning United Regional prices or discounts based on contracts with competitors. The proposed settlement stipulates that the hospital does not admit liability in settling the case. A written statement from the system says that United Regional disagrees with the government’s allegations, but that moving forward is in the best interests of its patients. The statement said the agreement would not affect the hospital’s negotiated discounts, which will continue to be honored.