HCA Healthcare Faces Second Antitrust Lawsuit in North Carolina

Across western North Carolina, frustrations linger following HCA Healthcare’s acquisition of the nonprofit Mission Health in 2019. Now, the city of Brevard has filed an antitrust lawsuit against HCA — the second of its kind in less than a year — alleging that the sprawling, Nashville, Tennessee-based system has hurt competition in local markets and artificially inflated healthcare prices.

Brevard operates a self-funded health insurance plan for its city employees and their families, and said in its complaint that it continues to be injured by HCA’s anticompetitive conduct. It is seeking to represent a class of similarly situated North Carolina health plans, including self-funded and commercial insurers.

“This action is brought at a time when providing affordable healthcare insurance plans for working families and governmental employees, such as firefighters, police, and teachers, and controlling healthcare costs have been top priorities for plaintiff and members of the proposed class, the business communities they serve, and state and local governments in western North Carolina,” the city wrote in its complaint. “Defendants’ conduct has impeded these objectives by impairing competition in the healthcare markets … and substantially and artificially inflating healthcare prices paid by plaintiff and proposed class member health plans.”

Specifically, the city of Brevard alleged that HCA has illegally maintained and enhanced monopoly power in the market for inpatient general acute care in hospitals and the market for outpatient care, and that it continues to dominate those markets in the Asheville region and its outlying region. HCA controls more than 85% of the general acute care market in the Asheville region and more than 70% in each of the counties in the outlying region.

Anticompetitive conduct by HCA has included “all-or-nothing” arrangements that require health plans to contract with all of HCA’s general acute care and outpatient services as a bundle; exclusive dealing requirements that prevent insurance companies from steering insureds to less expensive and/or higher-quality options; “gag” clauses that deliberately impede price transparency and inhibit employers from knowing the prices they pay for healthcare; and other conduct related to the negotiation of pricing for general acute care services, according to the complaint.

The scheme “has enabled defendants to raise prices substantially above competitive levels, to reduce healthcare choices, to reduce quality through dramatically worsened facility conditions and patient service, and to reduce patient access to [general acute care] and outpatient services in the relevant markets,” the city noted in its complaint.

HCA has also refused to comply with the federal price transparency rule from CMS that was implemented at the beginning of last year.

“Ensuring that our community has affordable, easily accessible, and high-quality healthcare is a top priority of city leadership,” Maureen Copelof, mayor of Brevard, told MedPage Today in an email. “We filed this lawsuit because the monopoly and the predatory practices demonstrated by HCA result in higher pricing and fewer choices. I want our community to have a choice of where they get medical services and want to see costs controlled and quality maintained through competition. This isn’t the case right now. Any type of monopoly is a concern but when it involves healthcare, it becomes a critical concern that demands action.”

She called the lawsuit “a culmination of issues over the past two and a half years,” and said that the community has expressed concern and frustration with HCA since the first town hall was held on the topic at the beginning of 2020.

“Since then there have been continuing issues that have impacted the ability of our community to receive accessible, affordable, and high-quality healthcare,” Copelof added. “Some of these include the departure of physicians from the HCA system, lack of a permanent general surgeon at [Transylvania Regional Hospital], closure of the cancer center, billing issues, reduced staffing, [and] high cost of services. These issues have been raised in additional community forums, in letters to HCA, in letters and conversations with the North Carolina Attorney General, and now some are being addressed via this lawsuit.”

In an emailed statement to MedPage Today, Nancy Lindell, director of public and media relations for HCA’s North Carolina Division, wrote, “Once we have been served with the lawsuit, we will respond appropriately through the legal process.”

“This lawsuit is beyond disappointing, especially since, at the request of Mayor Copelof, our company’s CEO Sam Hazen had a positive and productive meeting with Mayor Copelof and other community leaders less than a month ago,” she noted. “We hoped that meeting would be the beginning of a thoughtful and ongoing dialogue about healthcare in the city of Brevard and the broader Transylvania County region. In fact, we provided information requested during the meeting and hosted our first community council meeting just this week. At no point did Mayor Copelof mention this apparently long-planned lawsuit, which is frustrating and undermines what we thought were sincere efforts to build open, constructive relationships and lines of communication.”

Lindell said that HCA would now turn its attention to “vigorously defending the lawsuit, while continuing to provide excellent healthcare to the citizens of western North Carolina,” adding that the health system is “proud of our commitment to western North Carolina and the significant investments we have made to serve Brevard and improve patient care.”

She said that some of these efforts have included:

• Providing more than $277 million in charity care and uninsured discounts — $124 million more than in 2018, the year before the purchase of Mission Health
• Investing more than $14 million at Transylvania Regional Hospital for infrastructure projects, such as renovations of three operating rooms, replacing both the MRI and CT machines, and adding a new helipad
• Providing access to new specialties at Transylvania Regional, such as recently adding five new primary care providers to the area and renovating primary care practices

In the meantime, another antitrust case brought against HCA — also related to its purchase of Mission Health — is awaiting judgment on whether it can move forward in Buncombe Superior Court, the Citizen Times reported.

This earlier lawsuit, filed by a group of community members in August 2021, is aimed at the flagship operation in Asheville, and alleges exorbitant prices for care, as well as declining quality, according to the Citizen Times. Notably, it has garnered support from North Carolina Attorney General Josh Stein, who filed an amicus brief in the case.

As for the suit brought by Brevard, the city stated in its complaint that it is concerned about the future of care in western North Carolina.

“Without this court’s intervention, the future of healthcare competition in western North Carolina — traditionally a destination for many, including retirees from across the nation, in part because of its prior reputation for high-quality, low-cost healthcare — is at risk.”