NC AG files antitrust case against Carolinas HealthCare of Charlotte

RALEIGH, N.C. — Charlotte consumers face higher health care costs and fewer choices because of efforts by Carolinas HealthCare System to prevent competition, Attorney General Roy Cooper contends in a lawsuit filed Thursday.

“Pushing medical costs artificially higher and limiting choices harms North Carolina families,” Cooper said. “Consumers who need health care deserve accurate information and access to quality, affordable options.”

Cooper filed suit Thursday on behalf of the State of North Carolina alleging that Carolinas HealthCare System (CHS) illegally reduces competition in the health care market in Charlotte and limits consumers’ ability to shop around for better deals on health care. The case was filed jointly with the U.S. Department of Justice in U.S. District Court for the Western District of North Carolina.

CHS is based in Charlotte and operates Carolinas Medical Center and nine other hospitals in the Charlotte area. It controls half of the market.

The Charlotte region is home to 2.6 million consumers including those living in Cabarrus, Cleveland, Gaston, Iredell, Lincoln, Mecklenburg, Rowan, Stanly and Union counties in North Carolina, according to the news release.

CHS makes more than double its closest competitor: Novant Health.

"There's no arguing that CHS is a giant in the health care industry," Cooper told Action 9 investigator Jason Stoogenke via Skype.

Cooper said CHS uses its dominance to pressure insurance companies to pressure patients to not shop around. He said the result is patients pay more and have fewer choices.

"What we want to do is make sure that consumers have as many choices as they have, that they have quality choices," Cooper said.

Cooper said that most people in the Charlotte area use one of four insurance companies and that CHS makes all four agree not to "steer business away" from CHS.

Stoogenke asked CHS's lawyer Jim Cooney if CHS abuses its power. He said no.

"These kinds of provisions are used across the country every day," he said.

University of North Carolina at Charlotte health care professor Michael Thompson said CHS is exercising its power and that when a health care giant does that it's hard to tell whether it's good business or crossing the line.

"It's very difficult to compare apples to apples and know if they're using their leverage too much or just a right amount," he said.

The lawsuit asks the court to stop CHS from some of these practices.

Carolinas HealthCare System released the following statement:

"On June 9, 2016, the U.S. Department of Justice Antitrust Division filed a civil action against Carolinas HealthCare System in the United States District Court for the Western District of North Carolina regarding a dispute over certain language in contracts between CHS and insurance companies.

"Carolinas HealthCare System is committed to fair competition and looks forward to presenting our position in court. Our arrangements with insurers are similar to those in place between insurers and healthcare systems across the country. We have neither violated any law nor deviated from accepted healthcare industry practices for contracting and negotiation. In fact, we have been applauded by the United States government for the quality care and cost reduction programs we’ve implemented, programs it hopes to model in other parts of the country.

"Carolinas HealthCare System is strongly committed to providing accurate and useful information to consumers and patients as it relates to cost, quality and overall value of the care they receive. We remain dedicated to making healthcare more affordable, while ensuring that we fulfill our mission. We provide financial assistance to patients in need, as well as medical education and research in the communities we serve. These and other mission-based service totaled over $1.65 billion or 19% of total operating expenses."

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