DOJ Sues New York-Presbyterian Hospital Over Anticompetitive Contract Terms That Block Rivals

The Justice Department's Antitrust Division filed a civil lawsuit against The New York and Presbyterian Hospital, charging the city's largest hospital system with violating Section 1 of the Sherman Act through contractual restrictions that allegedly preclude insurers and employers from offering lower-cost health insurance plans to New Yorkers.

New York-Presbyterian owns and operates eight hospitals and many outpatient facilities in the New York City area. According to the complaint filed in the U.S. District Court for the Southern District of New York, the hospital system allegedly imposes plan restrictions in its contracts with payors that prevent them from offering plans that do not include New York-Presbyterian or do not feature it in the most favored tier.

The Justice Department alleges the hospital even forbids payors from offering lower copays when patients choose to receive care at New York-Presbyterian's rivals, who are often lower priced. The Justice Department alleges these restrictions insulate New York-Presbyterian from price competition and limit rival hospitals from competing for patients based on lower prices or better value.

"Millions of New Yorkers pay more for healthcare because of these anticompetitive practices," Attorney General Pamela Bondi said in the Justice Department's announcement. "At the direction of President Trump, this Justice Department will fight relentlessly to ensure that Americans get the healthcare they need without facing exorbitant costs."

Acting Assistant Attorney General Omeed A. Assefi said New York-Presbyterian "uses its market power to protect its margins, impede competition from rival hospitals, and prevent employers and unions from creating these plans."

"The high cost of healthcare is frustrating to every New Yorker," said U.S. Attorney Jay Clayton for the Southern District of New York.

The lawsuit seeks to enjoin New York-Presbyterian from imposing the contractual restrictions and represents the second healthcare antitrust case the Antitrust Division has brought this year.