The U.S. Justice Department and the North Carolina attorney general filed suit in federal court Thursday against Carolinas Healthcare System, the Charlotte area’s largest health care provider. They argue that CHS’s contracts with insurance companies drive down competition.
The lawsuit says that Carolinas HealthCare System’s contracts with insurance companies for in-patient services violate anti-trust laws. CHS is the largest health provider in the Charlotte area, and the Justice Department accuses the health system of using its size to strong-arm insurers into contracts that restrict competition in the Charlotte region.
The government says the contracts forbid insurers from “steering” customers to lower-cost competitors by offering lower coinsurance costs for providers that offer a better value. Without these restrictions, the suit says insurers would likely steer their customers to lower-cost providers more than their current CHS contracts allow. And that, the government says, has caused patients in the Charlotte area to pay higher out of pocket costs for their healthcare.
Carolinas HealthCare System says its arrangements with insurance companies do not violate the law and are similar to contracts between other health care systems and insurers across the country.
