Advocate Aurora uses anticompetitive tactics to drive up prices, lawsuit alleges

A proposed class-action lawsuit against Milwaukee and Downers Grove, Ill.-based Advocate Aurora Health alleges the health system used its market power to suppress competition and impose "eye-watering prices on commercial health plans and their members in Wisconsin."

The lawsuit filed Feb. 5 in a Wisconsin federal court alleges the health system: 

  • Forces commercial health plans to include all its "overpriced facilities" in-network even when they would prefer to include only some facilities. 
  • Goes to "extreme efforts to drive out innovative insurance products that save commercial health plans and their members money."
  • Suppresses competition through "secret and restrictive contract terms that have been the subject of bipartisan criticism." 
  • Acquires new facilities, which then allows it to raise prices due to reduced competition.

The lawsuit alleges that without intervention, the health system will continue to use "anticompetitive contracting and negotiating tactics to raise prices on Wisconsin commercial health plans and their members and use those funds for aggressive acquisitions and executive compensation." 

The suit is seeking to compensate commercial health plan members who have been "directly harmed by AAH's past illegal activity, and to enjoin AAH from continuing unlawful practices that harm Wisconsin's economy and healthcare system."

An Advocate Aurora spokesperson told Becker's in a statement: "This lawsuit has no merit, and we categorically reject these baseless claims. Health care providers and health insurers have worked together in recent years to offer more choices for members and patients. Our clinical expertise and integrated delivery model have driven safety and quality improvements while advancing more accessible and cost-effective care."

Advocate Aurora completed its merger with Charlotte, N.C.-based Atrium Health in December 2022, creating a 67-hospital system called Advocate Health — the fifth-largest nonprofit health system in the U.S. 

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