Feds: Carolinas HealthCare forced steering restrictions in top payer contracts

The Department of Justice and North Carolina Attorney General have filed an antitrust lawsuit against Carolinas HealthCare, alleging the Charlotte, N.C.-based system drove up costs in the region by imposing steering restrictions in contracts with commercial health insurers.

Carolinas HealthCare is the dominant system in the Charlotte area, controlling about 50 percent of the market. The lawsuit alleges the system used its market power to require steering restrictions in its contracts with every major insurer in the area, including Blue Cross and Blue Shield of North Carolina, Aetna, Cigna and UnitedHealthcare. For example, the complaint states that some of the contracts give CHS the right to terminate their agreements if the insurers attempted to steer business from the system, according to the Charlotte Observer.

"For years, insurers have tried to negotiate the removal of steering restrictions from their contracts with CHS, but cannot because of CHS' market power," the lawsuit states, according to the Charlotte Observer.

The steering provisions have prevented insurers from introducing health plans that encourage patients to use providers that offer lower priced, higher quality services than Carolinas, according to the DOJ.

The lawsuit also alleges that CHS prevented insurers from providing truthful information to consumers about the cost and quality of CHS' services compared to its competitors.

CHS said it is committed to fair competition, and its arrangements with insurers are similar to those in place between health systems and insurers across the country.

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