The Attorney General alleged that the eight-hospital, not for profit system — the largest in the Houston metropolitan service area with a 20 percent market share at the time — unfairly used its size and negotiating power to dissuade payors in 2005 from negotiating managed care contracts with a new competitor, physician-owned Houston Town and Country Hospital.
Unable to secure in-network contracts with payors like Cigna and Aetna, Town and Country closed in 2007 and Memorial Hermann purchased its facilities from creditors.
In a six-page antitrust complaint, Abbott alleged the Memorial Hermann’s actions unfairly restrained trade. Memorial Hermann agreed to a five-year injunction forbidding some contract negotiating practices and to pay $700,000 to reimburse the state for investigation costs. Memorial Hermann no fines or penalties and admitted no wrongdoing.
Read the Memorial Hermann complaint and settlement agreement.
Read the Memorial Hermann response to the lawsuit.
