The Jackson, Michigan–based health system agrees to stop coordinated anti-competitive business activities with competitors, but insists that it did nothing wrong.
Henry Ford Allegiance Health has settled its three-year antitrust fight with state and federal prosecutors, just weeks before the case was set for trial in federal court.
The Department of Justice and the Michigan Attorney General’s office filed suit in 2015, alleging that Henry Ford Allegiance Health and three other health systems in south central Michigan carved up the territory and insulated themselves from competition by agreeing to withhold outreach and marketing in each other's respective counties.
The three other health systems, Hillsdale Community Health Center; Community Health Center of Branch County in Coldwater; and ProMedica Health System in Toledo, OH, settled their suits two years ago.
"As a result of Allegiance's per se illegal agreement to restrict marketing of competing services in Hillsdale County, Michigan consumers were deprived of valuable services and healthcare information," Assistant Attorney General Makan Delrahim in DOJ's Antitrust Division said in a media release. "By prohibiting further anticompetitive conduct and educating Allegiance executives on antitrust law, this settlement will ensure that consumers receive the fruits of robust competition."
The proposed settlement was filed Friday in U.S. District Court for the Eastern District of Michigan, where the case was scheduled to go to trial on March 6.
Allegiance said in prepared remarks that it felt compelled to settle even though it did nothing wrong.
"We reluctantly chose to settle this litigation because continuing to defend ourselves against the United States and State of Michigan became too costly," the health system said. "This decision, regrettable but necessary, requires us to discontinue our defense of this case before the Court could rule on any of the highly contested issues raised in the litigation."
DOJ’s settlement with Allegiance expands on the earlier settlements with the other three health systems, which means that Allegiance cannot communicate, coordinate or limit marketing or business development with competitors. The agreement ends the health system’s carve out in Hillsdale County. Allegiance must also file annual compliance reports and submit to compliance inspections, and reimburse state and federal prosecutors for the court costs.
DOJ said the deal includes several new provisions that are now included in all new consent decrees that add greater specificity and accountability.
John Commins is a senior editor at HealthLeaders.