Atrium Health Reaches Settlement With Department Of Justice

Nov 15, 2018

Atrium Health and the North Carolina and United States Justice Departments have settled a 2016 antitrust lawsuit about health care pricing.

Credit Atrium Health

The suit, filed in federal court more than two years ago, claimed that Atrium Health had agreements in place with insurers that would prevent them from incentivizing patients to find more affordable care at other competitors within the Charlotte market.

The agreement would prohibit Atrium, formerly Carolinas HealthCare System, from entering contracts with insurance companies that would prevent or punish insurance companies from sharing price details with patients. The contracts can also no longer require Atrium to be in the highest tier of plans, even if those plans don’t meet price or other health care value criteria. 

Atrium is also prohibited from forcing insurers to gain approval before introducing or offering incentives for patients to use other hospitals or doctors at a lower cost.   

“As a result of this settlement, people will be able to purchase lower cost, high quality health care and gain transparency of health care pricing," Attorney General Josh Stein said in a statement Thursday. "We can’t allow Atrium to use its size and market dominance to the detriment of health care consumers.”

Health law and antitrust professor at Duke University Barak Richman said a settlement like this gives the Justice Department momentum to continue bringing cases against other health systems for similar practices.

“It would have been nice from an enforcement perspective to have gotten a clear ruling that when monopolist hospitals engage in these kind of practices, they have violated the law,” he said. “And the Department of Justice didn’t get that. And in that sense, the ball is still really in their court.”

Richman doesn’t expect that patients will see any changes in their insurance plans until next open enrollment period at the earliest. He also questions if there will be more insurance products available with more affordable coverage.  

“Will they have an insurance product where their insurer can say, ‘If you get an MRI just down the street, you can save $500 dollars.’” Richman said. “These are now possibilities that are released because of the settlement.”

There is another lawsuit filed by patients that claims they were harmed by the practices laid out in this suit. That case is ongoing in North Carolina business court.

Atrium said in a separate statement that the language in question was from 2001 contracts and that it was "originally added to ensure Atrium Health was provided an equal opportunity to compete for patients.”

“As the health care landscape continues to rapidly evolve, Atrium Health’s contracting language has also evolved to reflect current health care practices,” Atrium continued.

The health care giant doesn’t admit any wrongdoing and doesn’t have to pay any fines. It’s agreed to make changes going forward. One is sharing the details of contracts between insurers and Atrium with the North Carolina Attorney General. And within a year, Atrium has to send a report to the government detailing how it will comply with the settlement.

The settlement still needs judicial approval.