Dive Brief:
HCA Healthcare and its Mission Health subsidiary have reached a settlement with local governments in Western North Carolina over allegations the hospital operator monopolized the region’s healthcare markets, bringing a yearslong legal dispute to an end.
Under the agreement with Buncombe and Madison counties and the cities of Brevard and Asheville, Mission Health has pledged to donate $1 million to a new charity care fund for low-income patients and continue operating a regional hospital in Brevard for another three years.
HCA and Mission said they welcomed the settlement but continued to deny the allegations against them.
Dive Insight:
The city of Brevard sued HCA in June 2022, while Buncombe County and the city of Asheville filed their own suit one month later. The lawsuits were consolidated later that summer in North Carolina’s Western District court, with Madison County also joining the litigation.
The local governments contended that Mission illegally dominated markets for inpatient and outpatient services in Western North Carolina, giving the system the power to pursue a range of anticompetitive practices. That includes forcing health plans to agree to “all or nothing” arrangements requiring them to cover all of Mission’s services, which — given the lack of provider alternatives in the region — left plans with no leverage to negotiate lower prices.
Mission also prevented plans from steering members to cheaper options, required “gag” clauses preventing employers from knowing how much they’re paying for healthcare and other anticompetitive conduct, according to the suit.
The behavior was prevalent before HCA bought Mission in 2019. But HCA “supercharged the Scheme,” resulting in inflated prices for medical care and lower care quality, the complaint alleges.
In a statement, Mission Health and HCA said they believe their conduct was consistent with antitrust law, that their contracts didn’t contain any anticompetitive provisions and that they have not moved to “exclude competition or limit insurance company innovation in Western North Carolina.”
“Nevertheless, Mission Health and HCA are pleased that the resolution of this action allows them to continue to show their commitment to Western North Carolina,” the systems said.
Along with Mission agreeing to funnel $1 million into a new charity fund to cover medical care for individuals with income up to 400% of the federal poverty line, the system has agreed to keep Transylvania Regional Hospital operational for three additional years.
Back in 2019, HCA promised to keep Mission’s facilities operational for at least 10 years in its original asset purchase agreement. The settlement then extends that timeline to at least 2032 for Transylvania Regional.
Under the settlement, Mission has also pledged to find space to provide adult day care services in Brevard County, and get Mission Hospital verified as a trauma center.
The settlement also gives the municipalities and counties in the suit more information on Mission’s advisory boards.
The settlement puts to rest one of many lawsuits filed against HCA after the for-profit giant bought Mission for $1.5 billion six years ago. In 2021, a class action suit accused HCA of holding a monopoly of acute care services in the region following the acquisition. More recently, the state of North Carolina sued HCA in late 2023 for allegedly degrading the quality of care at one of Mission’s five hospitals.
HCA has denied worsening quality of care. However, a study from Wake Forest University last summer found that the Nashville-based system drove physicians away from Mission Hospital in droves while slashing nurse and emergency department staffing since acquiring Mission.
