The Department of Justice filed an antitrust lawsuit against NewYork-Presbyterian Hospital this week, alleging the provider used restrictive payer contracts to block lower-cost plans.
The agency claims the health system required payers to include all of its hospitals in their networks if they wanted access to any of them. According to the complaint, those provisions limited insurers’ ability to offer more affordable plans and slashed competition from lower-priced providers.
Essentially, the Justice Department is arguing that NewYork-Presbyterian’s allegedly anticompetitive conduct insulates it from price competition and allows it to maintain high prices.
“Without its unlawful contracts, NYP would need to compete more vigorously against other providers, and its rivals could compete to attract additional patients by lowering their own prices or investing in quality improvements. All employers and patients who purchase healthcare in New York City would benefit from lower prices and higher quality as the healthcare marketplace becomes more competitive,” the complaint read.
The Justice Department contends that NewYork-Presbyterian’s contract provisions violate The Sherman Act by suppressing competition among hospitals and physician groups in New York City.
NewYork-Presbyterian is the largest health system in New York City, operating eight hospitals and dozens of outpatient care sites.
In 2024, the health system’s share of general acute care discharges was more than 25% across Manhattan, Brooklyn, Queens and the Bronx, the complaint stated. This is far more than its competitors, which include Mount Sinai, NYU Langone Health, Northwell Health and NYC Health + Hospitals.
In a statement sent to MedCity News, NewYork-Presbyterian said the lawsuit is meritless. The health system also stated that it has cooperated with the Justice Department, complies with all federal and state laws, and believes its contracting policies are pro-competitive.
“We do not seek to exclude any other hospital from any insurer’s network. Nor do we require more favorable treatment than any other hospital. In our contract negotiations with insurers, we seek to maximize access to the highest quality of care. Insurance companies hold the market power and use it to restrict patient choice,” the statement read.
The lawsuit could mark an apparent crackdown on hospitals’ payer contracting practices, given the Justice Department filed a similar antitrust lawsuit against OhioHealth five weeks ago. The case centers on the alleged use of “all-or-nothing” contracts that force payers to include every hospital and physician affiliated with OhioHealth in their networks.
Depending on the rulings, these cases could reshape how large health systems negotiate with payers, potentially giving patients and employers more options.
Photo: krisanapong detraphiphat, Getty Images
