Atrium Health to settle federal antitrust suit over health care costs

Atrium Health agrees to settle lawsuit

CHARLOTTE, NC (Cassie Cope and Ames Alexander/Charlotte Observer) - North Carolina and federal authorities say they plan to settle their antitrust allegations against Atrium Health, reaching an agreement that they say will lower health care prices for patients.

The 2016 antitrust lawsuit filed against Atrium Health, formerly Carolinas HealthCare System, alleged that the multi-billion-dollar hospital chain illegally reduced competition in the Charlotte health care market.

In the proposed settlement of the suit, Atrium will be banned from entering into contracts with insurance companies that would limit transparency and curb the ability of insurers to offer lower cost benefit plans.

“With healthcare costs rising, vigilant antitrust enforcement is an essential tool for protecting consumers,” said Assistant U.S. Attorney General Makan Delrahim. “By eliminating restrictions that curb comparison shopping and interfere with competition among healthcare providers, today’s resolution of our antitrust action allows consumers in the Charlotte area to benefit from competition when making critically important healthcare choices.”

In a separate statement, N.C. Attorney General Josh Stein agreed: “We can’t allow Atrium to use its size and market dominance to the detriment of healthcare consumers ... Together, we have been able to achieve greater competition and price transparency for healthcare consumers in the Charlotte area.”

Atrium is North Carolina’s largest health care system and Charlotte’s largest employer. It operates 44 hospitals in three states. With more than $10 billion in net operating revenue last year, it is one of the nation’s largest nonprofit health care systems.

Atrium Health to settle federal antitrust suit over health care costs

In a statement issued Thursday, Atrium admitted no wrongdoing and said it did not violate the law. The system will pay no penalties or fines as part of the settlement, Atrium said.

“Atrium Health has always been a champion for patient choice, and believes its unparalleled quality, value and world-class services are the reason why more people continue to choose Atrium Health over any other healthcare provider in the region,” the system said in its news release. “Atrium Health’s focus remains on providing an individualized care experience for the thousands of patients who rely on its services for health, hope and healing each and every day.”

Atrium’s closest competitor is Novant Health, which owns five hospitals in the Charlotte area and has less than half of Atrium’s revenue, the lawsuit said at the time.

Atrium used its dominance to get its way with insurers, the lawsuit alleged.

In a 2012 investigation, The Charlotte Observer and The (Raleigh) News & Observer found that Atrium and other large nonprofit hospitals in North Carolina have pushed up health care costs, paid executives millions and left thousands with bills they struggle to pay.

The lawsuit alleged that Atrium used its market power to negotiate “unlawful contract restrictions,” which prevent consumers from taking advantage of lower prices at other hospitals, the Observer reported in 2016. The lawsuit also contended that Atrium encouraged insurers to steer patients its way and used its influence to prevent insurers from giving the same deal to competing hospitals.

Under the proposed settlement, Atrium will be banned from:

  • Restricting insurance companies from offering consumers financial incentives to use lower-cost, high-quality providers.
  • Preventing insurers from disclosing health care prices to consumers.
  • Requiring insurers to get Atrium’s approval before introducing lower-cost benefit plans.

The suit contended Atrium has “long had a reputation for being a high-priced healthcare provider.” In a 2013 presentation, an internal strategy group recognized that CHS “has enjoyed years of annual reimbursement rate increases that are premium to the market,” the lawsuit states.

In its Thursday statement, Atrium said it “welcomes competition based on value. Competition drives improvements in healthcare quality and services – ultimately benefiting every patient.”

The settlement will become final once it is approved by the courts.

“The resolution of this antitrust enforcement action gives Charlotte-area consumers what they did not have before: the ability to receive the appropriate, high-quality treatment they need, from a healthcare provider they choose, at a fair price,” said Andrew Murray, U.S. Attorney for the Western District of North Carolina. “Today’s enforcement action will restore competition in the Charlotte area, resulting in lower healthcare costs and increased healthcare access for consumers and their families.”