What to know about the antitrust cases against Hartford HealthCare

Hartford HealthCare, one of Connecticut’s largest health care systems, has been sued three separate times since January 2022 for allegedly violating antitrust laws.

Hartford HealthCare is an expansive network in Connecticut, with more than 2,474 licensed beds and over 500 locations across the state, according to the system. In 2023, it employed more than 6,600 physicians and 6,200 nurses and cared for over 106,000 patients in its seven hospitals.

Here’s what to know about the antitrust lawsuits filed against the health care system.

What is Hartford HealthCare accused of doing?

Plaintiffs in all three lawsuits allege that Hartford HealthCare has violated federal antitrust laws by engaging in anticompetitive practices in an attempt to garner further profit.

According to the Federal Trade Commission’s website, antitrust laws are designed to “protect the process of competition for the benefit of consumers, making sure there are strong incentives for businesses to operate efficiently, keep prices down, and keep quality up.”

Who is suing the health care system?

The first lawsuit was filed by Saint Francis Hospital in Hartford. Saint Francis accused Hartford HealthCare of attempting to form a monopoly by acquiring physician networks and demanding they only refer their patients to Hartford Healthcare facilities.

A group of Connecticut residents then filed a proposed class action lawsuit against Hartford HealthCare later the same year, alleging HHC used its market dominance to increase health care pricing for medically insured residents.

And, most recently, River Valley Transit and Teamsters 671 Health Service & Insurance Plan, two health plans, filed a proposed class action suit that says Hartford HealthCare “abused their market power to carry out a multifaceted anticompetitive scheme” with the intention of “foreclosing healthcare competition and extracting supracompetitive prices” from them and other health plans in Connecticut.

What more is there to know about the Saint Francis Hospital case?

Saint Francis Hospital, the largest Catholic hospital in New England, first filed suit on Jan. 11, 2022. The hospital sued Hartford Healthcare and its subsidiaries, including Hartford Hospital, Healthcare Medical Group, Inc., and Integrated Care Partners, LLC.

In its lawsuit , Saint Francis accused Hartford HealthCare of several antitrust violations, alleging HHC acquired several physician practices and then demanded that doctors only refer their patients to Hartford HealthCare “regardless of whether that is best for their patients.” The complaint states that after Hartford HealthCare acquired the practices of multiple specialty physicians at Saint Francis Hospital, that the number of patients seen at Saint Francis by these physicians fell by 95%.

Saint Francis contends that despite Hartford HealthCare providing “health care that is higher cost and lesser quality,” Hartford HealthCare has managed to establish market dominance on operations like cardiac and orthopedic surgeries. It has done so by forcing doctors to send their patients to Hartford HealthCare hospitals or by obtaining exclusive rights to robotic equipment — specifically a “ Mako ” robot used in many knee and other bone procedures, the lawsuit alleges.

The lawsuit also claims that in meetings between top Hartford HealthCare executives, executives were quoted saying their plan was to “crush” and “bury” Saint Francis Hospital.

Saint Francis Hospital officials declined to comment, citing pending litigation.

In a previous statement, Hartford HealthCare wrote, “We believe the complaint filed by St. Francis Hospital and Medical Center is without merit. Hartford HealthCare denies these allegations and we will vigorously defend against them.”

The lawsuit is currently in the discovery phase, with ongoing disputes between the two parties regarding access to documents, according to a document filed in May.

What is the insured residents’ lawsuit case about?

That complaint , filed in February 2022 by seven medically insured Connecticut residents, states Hartford HealthCare used its “must-have” hospitals — popular hospitals that insurers in Connecticut must have as part of their plan to be commercially viable to residents and employers — as leverage to “force insurers, employers, and patients to pay unreasonably high prices for care.”

HHC purportedly engaged in antitrust violations through their “all-or-nothing” contracts with insurers. A 2021 presentation to the Connecticut legislature’s Insurance and Real Estate Committee defined “all-or-nothing” contracts as contracts that require insurers to include the entirety of a network’s facilities in its coverage plan, regardless of price.

Another alleged anticompetitive strategy HHC enacted was the use of “anti-steering” and “anti-tiering” provisions in their contracts with insurers.

According to the Department of Justice, steering is “a method used by insurers to offer consumers options to reduce some of their health care expenses.” Anti-steering provisions prohibit health insurers from including anything that may steer patients to more cost-effective hospitals and facilities.

According to the National Academy for State Health Policy, a nonprofit dedicated to analyzing national health policy, tiered networks are when insurers “place providers into tiers based on price and quality and then offer patients financial incentives, typically through lower cost-sharing, to choose providers from a higher-value tier.” Under anti-tiering provisions, insurers are barred from offering tiered networks to patients, which encourage patients to pursue more affordable care.

The lawsuit goes on to say that HHC’s conduct has “forced patients and employers in Connecticut to pay higher prices for routine services that are often available at other hospitals only minutes away for substantially less.”

“I was approached as somebody who had been potentially targeted without directly knowing it… It felt like something [that] should be pursued, if indeed it was going to be helpful to other people,” said Lisa Fagan, one of the lawsuit’s seven plaintiffs.

In 2023, Hartford HealthCare attempted to dismiss the antitrust complaint against it, stating that the claims were “without merit”, however Connecticut Attorney General William Tong’s office disagreed with HHC, stating in an amicus brief that the plaintiffs “have standing to sue under the CT Antitrust Act.”

Elizabeth Benton, a spokesperson for the attorney general’s office wrote in an emailed statement, “We have serious concerns regarding health care consolidation and its impact on access, care and cost. That includes not just major hospital acquisitions, but consolidation of doctor practices and the concerning and increasing role of private equity.”

What about the health plans’ lawsuit?

On June 14th, 2024, another proposed class-action lawsuit was filed against HHC. This time it was by two health plans on behalf of other health plans in Connecticut, alleging that HHC “abused their market power to carry out a multifaceted anticompetitive scheme with the purpose and effect of foreclosing health competition and extracting supracompetitive prices from Plaintiffs and other health plans.”

The two plaintiffs are Teamsters 671 Health Service, which provides health care to transport and construction workers, and River Valley Transit, a mass transit provider headquartered in Middletown that provides benefits to employees and their families.

Both of these companies operate self-funded health plans, which are typically plans held by large employers that carry the brunt of paying for their employees’ health insurance costs. Fully-funded plans are typically for smaller organizations where employees pay premiums to the insurer.

The health plans claim that HHC violated antitrust policies enshrined under the Sherman Act through anti-steering, anti-tiering, and all-or-nothing contracts as well as pressing physicians to become part of exclusive contracts that did not allow them to join competing networks or refer patients to facilities outside of HHC.

Tina Varona, a Hartford HealthCare spokesperson, refuted the health plans’ claims. “This complaint is without merit… We will defend ourselves against the allegations, which fundamentally misrepresent the many ways Hartford HealthCare is working to transform healthcare, including providing best-in-class quality, improved access to care and offering lower-cost options outside of hospitals, like urgent care and ambulatory care centers,” Varona said.

In response to Varona’s statement, Matthew Ruan, a lawyer representing Estuary Transit District, the self-funded health plan of River Valley Transit, replied, “[The] plaintiffs are confident in the strengths of their claims and the strength of their complaints.”

What is the potential impact of these lawsuits?

The plaintiffs in all three cases are each seeking financial damages and injunctive relief, which is a court order that would result in Hartford HealthCare stopping the alleged anticompetitive practices.

Michael Cole, former Connecticut assistant attorney general and chief of the antitrust department, said if an injunctive relief is granted to the defendants, HHC could be forced to change the way it approaches negotiations.

“[The court] may say that HHC has to negotiate separately with all of its hospitals and the payers. So HHC can’t say, we come to you as a united front and we have market power, then an insurer like Anthem would be able to say, for example ‘I only want a contract with [Backus Hospital],’” Cole said.

This change could be detrimental to HHC’s business model, Cole said.

“Likely, it’ll go to trial. Hartford HealthCare clearly has a lot riding on this, I mean this is its business model. If they settle, they may be on the hook for damages… and they would probably have to address some of [their] business conduct in any kind of settlement. So maybe [the court] says ‘no more anti-steering or anti-tiering.’ So they may be hard pressed to walk away from this, so I would think there’s a lot riding on this.”

“On the defense side, if they prevail, they’re gonna slap their attorneys on the back and say nice job, they’re gonna walk away and not change their practices,” Cole added.