What You Need to Know About the Antitrust Cases Against Hartford HealthCare

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

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

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

What was Hartford HealthCare accused of?

Plaintiffs in all three lawsuits allege that Hartford HealthCare violated federal antitrust law by engaging in anticompetitive practices to earn greater profits.

According to the Federal Trade Commission website, antitrust laws are designed to “protect the competitive process for the benefit of consumers by providing businesses with strong incentives to operate efficiently, keep prices low, and ensure high quality.”

Who is suing the healthcare system?

The first lawsuit was filed by Saint Francis Hospital in Hartford. Saint Francis accused Hartford HealthCare of attempting to create a monopoly by taking over a network of doctors and demanding that they refer their patients exclusively to Hartford Healthcare facilities.

That same year, a group of Connecticut residents filed a class action lawsuit against Hartford HealthCare, alleging that HHC uses its dominant market position to raise the prices of health care services for residents with health insurance.

Recently, River Valley Transit and Teamsters 671 Health Service & Insurance Plan, two health plans, filed a proposed class action lawsuit alleging that Hartford HealthCare “abused its market position to conduct a multifaceted anticompetitive scheme” designed to “exclude health care competition and extort lower prices from them and other health plans in Connecticut.”

What else is worth knowing about St. Francis Hospital?

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

In the lawsuit, Saint Francis accused Hartford HealthCare of several antitrust violations, alleging that HHC acquired several medical practices and then required the doctors to refer their patients only to Hartford HealthCare “regardless of whether it was best for their patients.” The complaint states that after Hartford HealthCare acquired the practices of many specialists at Saint Francis Hospital, the number of patients seen at Saint Francis by those doctors dropped by 95%.

Saint Francis claims that despite Hartford HealthCare providing “higher-cost, lower-quality health care,” Hartford HealthCare has managed to establish a dominant market position in surgeries such as heart and orthopedic surgeries. It did so by forcing doctors to refer their patients to Hartford HealthCare hospitals or by obtaining exclusive rights to robotic equipment — specifically, the “Mako” robot used in many procedures on knees and other bones, the lawsuit alleges.

The lawsuit also alleges that during meetings of top Hartford HealthCare executives, executives were quoted as saying their plan was to “destroy” and “bury” Saint Francis Hospital.

Saint Francis Hospital officials declined to comment, citing the ongoing litigation.

In a previous statement, Hartford HealthCare said: “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 ourselves against them.”

According to a document filed in May, the case is currently in the evidence-gathering phase, with disputes between the parties over access to documents ongoing.

What is the lawsuit by insured residents about?

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

HHC allegedly committed antitrust violations through all-or-nothing agreements with insurers. A 2021 presentation to the Connecticut Insurance and Real Estate Commission defined all-or-nothing agreements as agreements requiring insurers to include the entirety of a network’s facilities in their insurance plan, regardless of price.

Another alleged anti-competitive strategy used by HHC was the use of “anti-steering” and “anti-leveling” clauses in its contracts with insurers.

According to the Department of Justice, steering is “a method used by insurers to offer consumers the option of reducing some of their health care costs.” Anti-steering regulations prohibit health insurers from including anything that might steer patients to more cost-effective hospitals and facilities.

According to the National Academy for State Health Policy, a nonprofit organization dedicated to analyzing national health policy, tiered networks occur when insurers “place providers into tiers based on price and quality and then offer patients financial incentives, typically through lower deductibles, to choose providers in the higher tier.” Under anti-tiering laws, insurers are prohibited from offering patients tiered networks that encourage them to use more affordable care.

The lawsuit says HHC’s conduct “forced Connecticut patients and employers to pay higher prices for routine services that are often available at other hospitals, just minutes away, at significantly lower prices.”

“I was approached as someone who was potentially targeted without knowing it directly… I felt like it was something that needed to be followed up on if it was actually going to be helpful to other people,” said Lisa Fagan, one of seven plaintiffs in the lawsuit.

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

Elizabeth Benton, a spokeswoman for the attorney general’s office, said in an emailed statement: “We have serious concerns about health care consolidation and its impact on access, care and costs. This includes not only large hospital acquisitions, but also practice consolidation and the troubling and growing role of private capital.”

What about the health insurers lawsuit?

On June 14, 2024, another proposed class action lawsuit was filed against HHC. This time, two health plans filed on behalf of other Connecticut health plans, alleging that HHC “abused its market power to conduct a multifaceted anticompetitive scheme that had the purpose and effect of foreclosing competition in the health industry and extracting supra-competitive prices from plaintiffs and other health plans.”

The two plaintiffs are Teamsters 671 Health Service, an organization that provides health care to transportation and construction workers, and River Valley Transit, a Middletown-based mass transit operator that provides benefits to workers and their families.

Both of these companies operate self-funded health plans, which are typically large employer plans that shoulder the burden 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 insurers allege that HHC violated the antitrust principles of the Sherman Act by using non-referral agreements, prohibiting tiering and all-or-nothing agreements, and by pressuring physicians to enter into exclusivity agreements that prevented them from joining competing networks or referring patients to non-HHC facilities.

Tina Varona, a spokeswoman for Hartford HealthCare, dismissed the health plans’ claims. “This complaint is without merit… We will defend ourselves against allegations that fundamentally misrepresent the many ways Hartford HealthCare is working to transform health care, including providing best-in-class quality, improving access to care and offering lower-cost options outside of hospitals, such as urgent care and outpatient facilities,” Varona said.

In response to Varona’s statement, Matthew Ruan, an attorney representing the Estuary Transit District, the self-funded health plan of River Valley Transit, responded: “Plaintiffs are confident that their claims and complaints have merit.”

What could be the potential impact of these lawsuits?

The plaintiffs in all three cases seek monetary damages and an injunction seeking to compel Hartford HealthCare to cease alleged anticompetitive practices.

Michael Cole, a former Connecticut deputy attorney general and head of the antitrust division, said that if the defendants are granted an injunction, HHC could be forced to change the way it conducts negotiations.

“They can coordinate and say HHC has to negotiate separately with all of its hospitals and payers. So HHC can’t say, we’re coming to you as a united front and we have market power, then an insurer like Anthem could say, for example, ‘I just want a contract with (Backus Hospital),'” Cole said.

Cole said the change could have a negative impact on HHC’s business model.

“It’s probably going to go to trial. Hartford HealthCare clearly has a lot riding on it, I mean, that’s their business model. If they settle, they could be liable for damages … and they would probably have to address some of (their) business conduct as part of any settlement. So maybe (the court) will say, ‘No more anti-steering, anti-leveling.’ So it might be hard for them to get out of it, so I think a lot riding on that.”

“If the defense attorneys win, they will pat their lawyers on the back and say, ‘Well done, they will go away and they will not change their practices,’” Cole added.