The U.S. Department of Justice sued the four-hospital Charleston (W.Va.) Area Medical Center and St. Mary's Medical Center, a Huntington, W.Va.-based teaching hospital, on Thursday for agreeing to allocate territories in which to market their competing services.
In the lawsuit, the DOJ alleges CAMC and St. Mary's curtailed competition for years through various marketing allocation agreements. For example, the DOJ alleges CAMC agreed not to use print or outdoor advertisements in Cabell County W.Va., if St. Mary's did not put them in Kanawha County, W.Va. The DOJ claims this practice is unlawful and deprives consumers from the benefits of competitive information needed to make informed healthcare decisions. It also denied physicians of the opportunity to advertise to more patients, the DOJ claims.
"These hospitals limited competition by agreeing on how and where each would advertise competing healthcare services," Assistant Attorney General Bill Baer of the Justice Department's Antitrust Division, said in a statement. "Marketing is an important tool that hospitals use to compete for patients. Today's action will end the hospitals' anticompetitive agreement and promote competition."
In filing the lawsuit, the DOJ also filed a proposed settlement that would prohibit the medical centers from making deals to limit or divide territory with other healthcare providers. It also would prohibit communication between the two medical centers about their marketing activities, with potential exceptions, and would require them to implement measures to prevent anticompetitive practices in the future.
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