Lawsuit: Mission Health purchase enabled HCA to create monopoly in North Carolina
HCA Healthcare is being accused of anti-competitive behavior in a new class-action lawsuit filed Tuesday.
The Nashville, Tennessee-based hospital operator purchased Mission Health in 2019 to gain monopolistic control in Western North Carolina, according to the suit filed by a group of six state residents.
Mission Health, a six-hospital system based in Asheville, North Carolina, allegedly operated as a monopoly from 1995 until 2019. HCA’s decision to buy the health system was driven by Mission’s “outsized ability to dictate prices and other contract terms to its customers,” the plaintiffs claim.
Since the purchase was completed, HCA has used improper restraints in its arrangements with commercial health plans and third-party administrators of self-insured plans, “including tying, all-or-nothing arrangements, gag clauses, and…other anticompetitive terms and negotiating devices” to drive up prices, according to the lawsuit.
The document cites Rand Corp. data from 2020 showing that the defendants charged commercial insurers 372% on average over the Medicare price for inpatient and outpatient services and an average of 393% above the Medicare price for only inpatient services. This was far higher than the mean of 262% and median of 277% above Medicare prices charged by other hospitals in North Carolina included in the Rand study.
Along with raising prices, HCA has allegedly been cutting costs and reducing staff, resulting in poorer quality healthcare for those in Mission Health’s service area.
“Today, HCA holds an approximate 90% market share…for inpatient [general acute] hospital care in Buncombe County, the most populous county in Western North Carolina, and in nearby Madison County,” the lawsuit states. “Because insurers and consumers in the region have no choice but to use HCA, HCA has free rein to dictate the prices it charges insurers and consumers while at the same time undermining quality to cut costs.”
Further, HCA has refused to fully comply with the hospital price transparency rule enacted at the beginning of the year, the lawsuit claims.
The plaintiffs are seeking damages and injunctive and declaratory relief to prevent HCA from engaging in anti-competitive in the future. They are also seeking a jury trial.
In a statement provided to MedCity News, HCA affirmed its commitment to the people of Western North Carolina.
“Once we have been served with the lawsuit, we will respond appropriately through the legal process,” said Nancy Lindell, Mission Health/HCA Healthcare N.C. Division spokesperson, in an email. ” We are committed to caring for Western North Carolina as demonstrated through more than $330 million in charity care and uninsured discounts we provided in 2020, expansion of hospital services…Further, we have invested in our colleagues with onboarding nearly 1,200 new members this year.”
The lawsuit comes about a month after President Joe Biden issued an executive order taking aim at anti-competitive behavior, including in the context of hospital consolidation. Biden urged the Justice Department and Federal Trade Commission to review and revise their merger guidelines through the lens of preventing patient harm.
But how the government agencies will act on the executive order remains to be seen.
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