Federal prosecutors had alleged that Atrium's restrictions on coverage options prevented insurers from promoting cost-effective healthcare services. Atrium admits no wrongdoing.
Atrium Health has agreed to end what the federal government said are anticompetitive steering restrictions in contracts between commercial health insurers and its providers in the Charlotte, North Carolina service area, the Department of Justice announced.
If the settlement is approved by a federal judge, it will end two years of civil antitrust litigation that challenged Atrium's alleged use of steering restrictions that prevented health insurers from promoting cost-effective healthcare services to consumers, DOJ said.
"Competition encourages healthcare providers to reduce costs, lower prices, and increase quality," said Makan Delrahim, Assistant U.S. Attorney General for the Antitrust Division. "Atrium's steering restrictions interfered with the competitive process, resulting in fewer choices and higher costs for consumers."
DOJ claimed that Atrium, the dominant provider in Charlotte, used its market power to restrict health insurers from encouraging consumers to choose healthcare providers that offer better value. The restrictions also constrained insurers from providing consumers and employers with information regarding the cost and quality of alternative health benefit plans, DOJ said.
Atrium issued a statement noting that there was "no admission on the part of Atrium Health of wrongdoing in this settlement agreement, and Atrium Health did not violate the law. In addition, Atrium Health will not pay any penalties or fines."
"The language in question is from contracts created as long ago as 2001 and was originally added to ensure Atrium Health was provided an equal opportunity to compete for patients," Atrium said. "As the healthcare landscape continues to rapidly evolve, Atrium Health's contracting language has also evolved to reflect current healthcare practices."
Atrium is North Carolina's largest healthcare system and one of the largest not-for-profit healthcare systems in the United States. Atrium's flagship Carolinas Medical Center is the largest hospital in North Carolina. Atrium also operates eight other general acute-care hospitals in the Charlotte area and owns, manages, or has strategic affiliations with more than 40 hospitals in the Carolinas.
In 2017, Atrium's owned, managed, and affiliated hospitals and other healthcare providers earned net operating revenue of close to $10 billion.
“Competition encourages healthcare providers to reduce costs, lower prices, and increase quality. Atrium's steering restrictions interfered with the competitive process, resulting in fewer choices and higher costs for consumers.”
Makan Delrahim, Assistant U.S. Attorney General for the Antitrust Division
John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.
KEY TAKEAWAYS
Atrium allegedly used its market power to restrict health insurers from promoting coverage options for consumers.
The Charlotte-based health system says the problem arose from obsolete language in older contracts.
The settlement awaits the approval of a federal judge.