Judge green­lights feds’ steer­ing con­tract suit against Caroli­nas

Modern Healthcare - - LATE NEWS - —Maria Castel­lucci

A North Carolina fed­eral judge up­held a law­suit brought by the U.S. Jus­tice Depart­ment against Caroli­nas Health­Care Sys­tem al­leg­ing the sys­tem’s steer­ing pro­vi­sions in in­surer con­tracts are an­ti­com­pet­i­tive.

U.S. Dis­trict Judge Robert Con­rad ruled March 30 that the Jus­tice Depart­ment has suf­fi­cient ev­i­dence to prove the sys­tem takes ad­van­tage of its mar- ket power in Char­lotte, N.C., by forc­ing four ma­jor in­sur­ers into steer­ing con­tracts that raise prices for pa­tients.

Caroli­nas con­trols 50% of the Char­lotte health­care mar­ket. The Jus­tice Depart­ment claims in­sur­ers agree to con­tracts with Caroli­nas that pre­vent them from steer­ing pa­tients to less costly providers be­cause of this mar­ket power.

The health sys­tem al­leges it needs steer­ing pro­vi­sions in or­der to pre­vent in­sur­ers from us­ing its in­clu­sion in their plans as a mar­ket­ing ploy. Caroli­nas’ at­tor­neys also claim that their ar­range­ments with the in­sur­ers pro­mote com­pe­ti­tion be­cause the health sys­tem is pro­vid­ing dis­counted ser­vices in ex­change for “cus­tomer loy­alty.”

The in­sur­ers—Aetna Health of the Caroli­nas, Blue Cross and Blue Shield of North Carolina, Cigna Health­care of North Carolina and United-Health­care of North Carolina—hold 85% of the com­mer­cial in­sur­ance mar­ket in the Char­lotte area, ac­cord­ing to the feds.

In re­sponse to the judge’s rul­ing, Caroli­nas said in a state­ment that it “has not vi­o­lated the an­titrust laws and we look for­ward to fur­ther sup­port­ing our po­si­tion in court.”

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