HCA Hospital Slapped with Healthcare Antitrust Lawsuit

A group of North Carolina residents have filed a healthcare antitrust lawsuit against a local hospital recently acquired by HCA Healthcare.

The lawsuit acquired by Axios alleges that Mission Health, an operating division of HCA Healthcare, has run a monopoly business for years, resulting in higher hospital prices, insurance premiums, and other out-of-pocket costs for patients in western North Carolina.

Mission Health merged with HCA Healthcare in January 2019. HCA Healthcare is the largest for-profit hospital chain in the US and provides about 6 percent of all inpatient hospital services in the country.

In Buncombe County and Madison County, North Carolina though, HCA Healthcare controls about 90 percent of the market share for inpatient general acute care hospital services, the lawsuit claims.

“Because insurers and consumers in the region have no choice but to use HCA, HCA has free rein to dictate the prices it charges insurers and consumers while at the same time undermining quality to cut costs,” plaintiffs state in the complaint.

But plaintiffs added that Mission Health had run a monopoly business prior to the acquisition by HCA Healthcare. They explain that the issue goes back to 1995 when Mission Health merged with St. Joseph’s Hospital under a Certificate of Public Advantage (COPA), which was later repealed.

The merger led to Mission Health engaging in “improper restraints” on hospital competition in the area. For example, the lawsuit claims the hospital used all-or-nothing arrangements and gag clauses when negotiating rates with private payers operating in the area.

According to plaintiffs, the situation in western North Carolina embodies what the Biden-Harris administration recently identified as harmful healthcare deals in a recent executive order on increasing competition across industries.

“Hospital consolidation has left many areas, especially rural communities, without good options for convenient and affordable healthcare service,” the Biden-Harris administration wrote in a fact sheet on the executive order.

“Thanks to unchecked mergers, the ten largest healthcare systems now control a quarter of the market. Since 2010, 139 rural hospitals have shuttered, including a high of 19 last year, in the middle of a healthcare crisis. Research shows that hospitals in consolidated markets charge far higher prices than hospitals in markets with several competitors.”

Furthermore, HCA Healthcare’s failure to comply with new hospital price transparency requirements from the federal government have shielded the public from the high prices in western North Carolina as a result of Mission Health’s business dealings, the lawsuit state.

"Were HCA to comply and reveal to consumers and regulators the true prices that it charges, the public would know that HCA/Mission's prices for key services are by far the highest in North Carolina,” it reads.

CMS has required hospitals to post pricing information, including payer-specific negotiated charges, on their public websites. Hospitals must also provide a consumer-friendly version of the list with at least 300 shoppable services.

Compliance with the new requirement has been low and inconsistent since they went into effect on January 1, 2021. Many hospitals are choosing to not post payer-specific negotiated rates.