Caroli­nas Health­Care blasts feds’ chal­lenge to con­tracts

Modern Healthcare - - REGIONAL NEWS - —Erica Te­ichert

Caroli­nas Health­Care Sys­tem is fight­ing back against a law­suit by the U.S. Jus­tice De­part­ment that al­leges the sys­tem im­posed an­ti­com­pet­i­tive con­tract re­quire­ments on in­sur­ers, say­ing a fed­eral ap­peals court has re­jected the gov­ern­ment’s ar­gu­ments.

Caroli­nas urged a North Carolina fed­eral judge to toss out the Jus­tice De­part­ment’s suit af­ter the 2nd U.S. Cir­cuit Court of Ap­peals re­jected the gov­ern­ment’s ar­gu­ments against sim­i­lar con­tract ar­range­ments in a case in­volv­ing Amer­i­can Ex­press.

Al­though the North Carolina judge is not bound to fol­low the 2nd Cir­cuit’s judg­ment, Caroli­nas main­tains the ap­pel­late rul­ing un­der­cuts the feds’ ar­gu­ments that it would harm com­pe­ti­tion.

The 10-hospi­tal sys­tem has steer­ing pro­vi­sions in con­tracts with Aetna Health of the Caroli­nas, Blue Cross and Blue Shield of North Carolina, Cigna Health­care of North Carolina and Unit­edHealth­care of North Carolina. Those in­sur­ers make up 85% of the com­mer­cial mar­ket in the Char­lotte area, the Jus­tice De­part­ment said. Un­der the con­tracts, Caroli­nas gave the in­sur­ers dis­counted rates for its fa­cil­i­ties and ser­vices. With­out the ar­range­ments, the health sys­tem claims the in­sur­ers would take ad­van­tage of its in­clu­sion in their net­works.

The Jus­tice De­part­ment hasn’t pre­vi­ously tar­geted steer­ing pro­vi­sions in hospi­tal con­tracts. In the past, the agency has at­tacked the is­sue by chal­leng­ing con­tracts with most-fa­vored-na­tion clauses.

Caroli­nas Med­i­cal Cen­ter in down­town Char­lotte, N.C.

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