More states target hospitals with anticompetitive contracting policies
A growing number of states are trying to limit hospitals’ anticompetitive contracting policies through lawsuits or legislation, while federal antitrust agencies are revising their regulations.
One of the most recent examples is in Connecticut, St. Francis Hospital and Medical Center sue Hartford HealthCare allegedly drove up prices by bullying doctors into anti-competitive contract terms to protect their acute care monopoly.it’s up to date a series of lawsuits looks Curb a dominant health system market power.
St. Francis is seeking financial damages, a permanent injunction preventing Hartford’s alleged anti-competitive conduct, and a court order to divest Hartford’s physician licenses purchased since 2020.
“These actions do not involve competition to attract patients based on price and quality. Rather, they prevent such competition by controlling large numbers of physicians and effectively targeting patient referrals,” the complaint reads.
Hartford HealthCare denies the “baseless” allegations and will remain focused on “meeting the needs of patients and communities during this raging pandemic as we care for more hospitalized COVID-19 patients than ever before,” the statement said. The organization said in a statement.
As of 2018, Hartford’s flagship hospital had 15 percent more inpatient services than St. Francis, although it did not perform as well as St. Francis on quality metrics, according to a lawsuit filed this month in Connecticut federal court. St. Francis executives claim that the price difference is largely due to the terms of their contracts.
Hartford HealthCare allegedly penalizes physicians in its affiliated physician group if they do not refer patients to facilities within the system, interfering with the health plan’s tiered network that prioritizes high-quality, low-cost hospitals, and threatened to cut off independent physicians if they did not refer patients to them.
Hartford Hospital priced its inpatient services at 199 percent of the national average Medicare rate, according to 2018 RAND Corporation data. data, showing that Hartford Hospital has the highest prices in the county. In 2019, hospital admissions at Hartford, Connecticut hospitals were 24% higher than the national median data Program from the Healthcare Cost Institute. According to HCCI, the regional inpatient market is highly concentrated.
Sutter Health recently settle down A major lawsuit with similar anticompetitive contracting allegations, but few states have laws preventing these practices.
While there are at least 10 proposed bills and lawsuits aimed at limiting all-or-nothing, reverse-direction or exclusivity clauses in supplier contracts, fewer than a dozen states currently have laws in place, according to 2020 data data From UC Hastings and UC Berkeley.
Only three states completely prohibit non-compete clauses in physician contracts; a dozen states have some restrictions on non-compete clauses.
In one of several related lawsuits, in California, Sutter last year agreed to pay $575 million to compensate payers who allegedly had to pay high prices due to practices such as all-or-nothing contracts. Sutter is now barred from punishing insurers or self-financing employers for choosing to include some, but not all, facilities in their network.
Proposed federal legislation by Sens. Mike Braun (R-Indiana) and Tammy Baldwin (D-Wisconsin) aims to prevent health systems from forcing payers to contract with affiliated hospitals or physician groups. The Better Care Health Competition Act is currently in a Senate subcommittee.
The Federal Trade Commission and the Department of Justice also Reform Antitrust Regulations, which in part attempts to limit the market power of the health system through greater scrutiny of physician acquisitions.
Research shows that physician consolidation and the dominant health system’s exclusivity contract programs increase healthcare costs.Although the number of patients in hospitals decreased by 11% from 2002 to 2016, total payments to hospitals by commercial health plans increased by 167% in 2018 learn The USC-led academics published the findings in Health Affairs.
While hospitals claim they charge more because patients are sicker, policy experts point to the health system’s anticompetitive contractual terms.