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U.S. Justice Dept. Asks For Suit To Proceed Against Carolinas HealthCare

Carolinas HealthCare System

The U.S. and North Carolina Justice departments are asking a federal judge to allow their antitrust lawsuit to continue against Carolinas HealthCare System. In a new court filing, they argue the Charlotte-based hospital system is already conceding certain points.

The U.S. Justice Department and the North Carolina Attorney General say Carolinas HealthCare uses its dominance of the Charlotte market to raise prices and reduce competition.

The hospital system countered last month that the government is effectively acting on behalf of four insurance companies that already control at least 85 percent of the market, and that the lawsuit is an unprecedented attack on industry-standard contracts.

Justice attorneys say that response made two critical concessions. First, that Carolinas HealthCare deters insurance companies from steering patients away from it. And second, the system didn't address the allegation that its contracts prevent insurance companies from providing truthful information to consumers.

As a result, "even though CHS is more expensive to insurers than rival hospitals, insurers cannot direct patients to cheaper or higher-quality options, or even inform patients of the consequences of choosing the highest-priced option."

Justice attorneys also say courts have found similar contract restrictions can violate antitrust laws.