The Justice Department has accused NewYork-Presbyterian, a health system based in New York City, of stifling competition through restrictive payer contracts, according to a lawsuit filed March 26.
The lawsuit, filed in the U.S. District for the Southern District of New York and reviewed by Becker’s, follows a monthslong investigation led by the Justice Department into the health system’s insurer contractual agreements. A 2024 complaint from Local 32BJ of the Service Employees International Union prompted the investigation; with the New York City union claiming NewYork-Presbyterian used restrictive insurance agreements to block patients from lower-cost competitors.
In response to the lawsuit, the health system told Becker’s that payers “hold the market power and use it to restrict patient choice,” adding that NewYork-Presbyterian is in compliance with federal and state laws and regulations.
NewYork-Presbyterian allegedly negotiates with insurers on an “an all-or-nothing basis” through its market dominance, allowing the organization to charge more for routine medical procedures without the fear of losing patients to its two main competitors, NYU Langone and Mount Sinai, according to court documents.
The Justice Department said the health system has violated federal antitrust laws and is seeking a judge to prohibit NewYork-Presbyterian from engaging in “unlawful and anticompetitive means of restricting budget-conscious plans.”
NewYork-Presbyterian operates 10 hospital campuses, more than 450 primary and specialty care clinics and medical practices, and employs more than 51,000 people. One of its New York City hospitals, NewYork-Presbyterian/Weill Cornell Medical Center, is among the 100 largest U.S. hospitals with 862 beds.
Read NewYork-Presbyterian’s full statement below:
“NewYork-Presbyterian is disappointed that the Department of Justice has filed this lawsuit, which we think is without merit. We have been cooperating with the department’s inquiries into our contracting practices and had begun what we thought were productive discussions with the department’s leadership. As we have explained to the department, NewYork-Presbyterian complies fully with all applicable federal and state laws and regulations. We stand behind our policies and processes, which we believe are pro-competitive.”
“We do not seek to exclude any other hospital from any insurer’s network. Nor do we require more favorable treatment than any other hospital. In our contract negotiations with insurers, we seek to maximize access to the highest quality of care. Insurance companies hold the market power and use it to restrict patient choice.
“The obligation of insurance companies is to their shareholders, while ours is to our patients. We believe all New Yorkers should be able to choose their health care provider.”
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