HCA Healthcare to face antitrust lawsuit over its 'all or nothing' contracts with health plans

A federal judge in North Carolina has denied HCA Healthcare’s attempt to dismiss a proposed class action lawsuit accusing it of scheming to restrict competition and artificially drive up costs for health plans. The plaintiffs “plausibly assert that defendants’ conduct has harmed competition,” Chief U.S. District Judge Martin Reidinger ruled.

The lawsuit alleges that HCA engaged in an “anticompetitive scheme involving the illegal maintenance and enhancement of monopoly power” in the acute care hospital and outpatient care markets in seven counties in North Carolina. The allegations focus on HCA’s 2019 acquisition of Mission Health, based in Ashville, N.C.

The consolidated case includes lawsuits from cities and counties across western North Carolina, including Asheville. The plaintiffs first sued in 2022, alleging that HCA and its Mission Health system held an unlawful monopoly over general acute care, which includes diagnostic and treatment services at hospitals, and outpatient services. The plaintiffs also alleged that HCA forces health plans to accept “all or nothing” contracts that restrict their ability to steer patients to lower-priced options.

In court papers, HCA called the allegations “baseless” and said they serve only to “increase hospitals’ cost of doing business in the form of high litigation expenses.” Mission Health, which HCA acquired in 2019 and is also a defendant, said in a statement it will “vigorously” contest the allegations.

Plaintiffs’ attorney Eric Cramer was pleased with the ruling. “We expect to gather ample evidence to support our allegations that the defendants used various anticompetitive tactics to monopolize health-care markets, artificially inflate health-care prices and reduce health-care quality across the region,” he said.

The ruling came shortly after the Centers for Medicare & Medicaid Services sent a letter informing Mission Hospital that the 815-bed facility is at immediate risk of losing federal funding because of citations it received in January. CMS had set a deadline of February 6 for Mission Hospital to submit a plan of correction to address the compliance issues, and the hospital met that deadline.

Related: 25 HCA Healthcare data breach class action lawsuits filed (so far)

HCA disclosed last week that an external storage location used to automate email message formatting had been compromised. Data lists including up to 27 million rows of data potentially affecting 11 million patients were accessed, and information ranging from patient names, emails, dates of birth and appointment locations — but not clinical information — was posted online, the system said.

HCA operates nearly 200 hospitals in 21 states. The company reported revenue of nearly $65 billion last year.