The Department of Justice and the attorney general of Ohio have settled a challenge to OhioHealth Corporation’s insurance contracting practices. The settlement bars OhioHealth from attempting to obtain contract provisions that prohibit, deter, prevent, or penalize steering.
In February, the Department of Justice and Ohio sued OhioHealth, claiming that the health care system abused its market power by negotiating for contract provisions frequently referred to as “anti-steering” and “gag rules.” The complaint alleges that OhioHealth requires an insurer that wants any of OhioHealth’s providers in its network to include all of OhioHealth’s providers in the network.
OhioHealth’s contracts allegedly “insulate it from price competition and help to maintain its extremely high prices” and violate Section 1 of the Sherman Act and Ohio’s Valentine Act, the state’s primary antitrust law. The Department of Justice contends that patients are harmed by OhioHealth’s conduct because it “deprive[s] patients of a choice among a full spectrum of competitive health insurance plans.”
The settlement voids and prohibits the health system from seeking contract provisions that prohibit or deter steering or transparency. It also bars conduct that penalizes, or threatens to penalize, an insurer for steering members to other providers or providing rate transparency to its members.
The settlement permits OhioHealth to participate in the most-preferred tier of a plan, but it must do so under the same terms and conditions as its competitors. If OhioHealth declines participation in the most-preferred tier, it must still participate in that plan on terms and conditions that are substantially the same as the terms and conditions of then-existing broad networks.
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OhioHealth litigation and the Department of Justice’s recent lawsuit challenging some similar contracting practices of a New York hospital system signal to health care providers that historically lawful negotiation strategies need to be reviewed. They make clear that regardless of the purported market power of a health care system, it is still permitted to negotiate to participate in a most-preferred tier as long as it does so under the same terms and conditions as any other provider.
The settlement allows a provider to protect disclosure of its negotiated rates to competitors or the public and to challenge the dissemination of inaccurate information. This is a significant provision, as it will help to promote transparency in the health care market, specifically in regulated industries.
The Department of Justice has obtained much of its requested relief through the settlement, which will help to promote competition in the health care market and reduce costs for patients, ultimately benefiting the public.
It is a significant development.
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