DOJ claims OhioHealth’s contract restrictions unfairly drive up health care costs

(CN) –The U.S. Department of Justice filed a federal lawsuit against OhioHealth on Friday, claiming the health care provider engages in anticompetitive contract restrictions that force Ohio patients to pay higher prices for health care.

OhioHealth, the largest health care system in central Ohio, owns or manages 16 hospitals and outpatient facilities statewide.

“Americans deserve low-cost, high-quality health care — not anticompetitive hospital system contracts that make health care less affordable,” Attorney General Pamela Bondi said in a statement.

The lawsuit, filed in the U.S. District Court for the Southern District of Ohio’s Eastern Division, claims OhioHealth uses its market power to impose contract terms that block insurers from offering innovative, lower-cost health insurance plans or plan features.

“OhioHealth has thereby denied patients the ability to choose a health plan that may work better for them—a choice that patients would be free to make in a competitive market unburdened by OhioHealth’s burdensome restrictions,” the lawsuit states. “OhioHealth’s contractual restrictions insulate it from price competition and help to maintain its extremely high prices. The dynamic effect of these contractual restrictions is that OhioHealth is effectively preventing competitors from achieving scale with regard to patients as well as quality.”

The DOJ claims that OhioHealth requires insurers to include its hospitals in all commercial insurance networks, regardless of price, effectively blocking the creation of lower-cost plans in the Columbus area.

“Since at least 2003, it has used its market power to protect its dominance—and its high prices—by blocking payors from offering patients health insurance plans that feature lower-cost hospitals and other providers and even from informing patients that lower-cost options are available,” the lawsuit states.

Absent those practices, the DOJ argues, OhioHealth would be forced to compete more aggressively with other providers.

“Competition for health care is vital to all Americans,” said Acting Assistant Attorney General Omeed A. Assefi of the Justice Department’s Antitrust Division in a statement. “This lawsuit challenges anticompetitive contract restrictions that prevent consumers from choosing lower-cost health plans and severely limit consumers’ access to price information. These restrictions cause many Columbus residents to pay more for lower-quality health care. American families and consumers deserve better.”

The DOJ says OhioHealth’s restrictions deter the emergence and development of cheaper health insurance plans, which reduces competition among hospitals and other providers, driving up prices and reducing quality.

The DOJ’s lawsuit seeks an order finding that OhioHealth’s practices violate the Sherman Act and the Valentine Act, and an order prohibiting the health care provider from continuing to engage in anticompetitive activity.

OhioHealth did not immediately respond to an email request seeking comment.

The lawsuit was filed a week after Gail Slater, Trump’s appointed assistant attorney general, was fired from her post in the DOJ’s Antitrust Division and was replaced by Assefi.

Follow @joeharris_stl