The Justice Department on Thursday sued the NewYork-Presbyterian health system, accusing it of striking anticompetitive deals with insurers that blocked them from offering lower-cost plans to consumers.
In an antitrust lawsuit filed in the U.S. District Court for the Southern District of New York, the government said that the medical system had kept health plans from steering patients to less expensive options or creating cheaper plans.
NewYork-Presbyterian used its dominant position in the market for health care in New York to reach agreements that “deprive patients of a choice among a full spectrum of competitive health insurance plans” and “insulates it from price competition,” the government said in its lawsuit.
The lawsuit could shed light on contracts between insurers and hospitals containing details that often remain hidden from patients. Critics and industry observers have long argued that big hospitals can use those contracts to box out lower-cost alternatives.
NewYork-Presbyterian, one of New York City’s most prominent medical institutions, has traditionally avoided speaking about the terms of its contracts. The medical system, which includes Columbia University Medical Center and Weill Cornell Medical Center, did not immediately respond to a request for comment.
The scrutiny comes as the Trump administration promises to take on the high cost of living ahead of the midterm elections. The Justice Department in February filed a lawsuit against OhioHealth, which serves the central region of the state, making similar accusations about its deals with insurers. In a speech this month, the acting head of the Justice Department’s antitrust division, Omeed A. Assefi, referred to lower prices in health care as “exactly the kind of kitchen table priority we should be pursuing.”
But in other areas, the administration has pulled back on its scrutiny of powerful companies. The Justice Department and the Federal Trade Commission have allowed prominent corporate mergers to proceed without litigation and settled antitrust lawsuits against large companies, including the Ticketmaster owner Live Nation Entertainment this month.
At the heart of Thursday’s lawsuit are negotiations between hospitals and insurers that happen out of sight of patients, focused on which medical systems insurers will include in their networks.
Critics have long argued that provisions of those contracts make it hard for insurers to create cheaper plans that exclude expensive hospitals or to direct patients to lower-cost options.
One New York union that offers its own health plan, Local 32BJ of the Service Employees International Union, accused NewYork-Presbyterian last year of making it difficult to steer its members to health care options that cost less. In 2024, the union sent the Justice Department a memo outlining its concerns.
In some cases, NewYork-Presbyterian forbid insurers from excluding its expensive medical system from the networks for their plans, according to the government. NewYork-Presbyterian also sometimes used its contracts to forbid insurers from offering incentives to patients to seek out lower-cost medical providers by offering them lower co-payments at those institutions, the government said.
The government said in its lawsuit that without the contracts NewYork-Presbyterian “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 health care in New York City would benefit from lower prices and higher quality as the health care marketplace becomes more competitive,” the government said.
David McCabe is a Times reporter who covers the complex legal and policy issues created by the digital economy and new technologies.
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