Earlier in 2017, Judge Robert J. Conrad, of the U.S. District Court for the Western District of North Carolina, denied a motion to dismiss the antitrust case brought against the Carolinas HealthCare System (CHS) by the Department of Justice (DOJ) and the Attorney General of North Carolina. The CHS case is the first antitrust challenge of “anti-steering” contract clauses in the health-care industry. Hospital systems use these provisions in their contracts with commercial health insurance companies to prevent insurers from steering their members to less expensive hospitals. The CHS case is a reminder that hospital systems with a large share in their local inpatient hospital market should be cautious about insisting on such provisions, particularly with a number of insurers that collectively represent a substantial percentage of the commercially insured residents in that market.

This article summarizes the facts of the CHS case and lists five things to watch for as the case proceeds. (Supporting materials not otherwise cited can be found on the court docket for the case, United States et al. v. The Charlotte-Mecklenburg Hospital Authority d/b/a/ Carolinas Healthcare System, No. 16-cv-311 (W.D. NC), as well as on the Antitrust Case Filings page of DOJ's website).

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