New lawsuit alleges Hartford HealthCare stifled competition, seeks class action status

Two health plans filed a proposed class-action lawsuit against Hartford HealthCare and several of its subsidiaries earlier this month for alleged unlawful monopolization, restraint of trade and price fixing.

The 53-page complaint filed in U.S. District Court claims that Hartford HealthCare suppressed competition and inflated the cost of care that health plans must pay for.

Tina Varona, a spokesperson with Hartford HealthCare, dismissed the allegations as misleading and said the health system remains focused on serving the needs of its patients and communities.

“We will defend ourselves against the allegations, which fundamentally misrepresent the many ways Hartford HealthCare is working to transform health care, including through increased accessibility and lower-cost options,” Varona wrote in emailed comments.

The plaintiffs are River Valley Transit, a mass transit provider headquartered in Middletown that provides benefits to employees and their families, and Teamsters 671 Health Service & Insurance Plan, which provides benefits to union members, including transport and construction workers, as well as their families.

The lawsuit provides what are claimed to be examples of Hartford HealthCare charging more for the same procedure when compared to its competitors: A colonoscopy at St. Vincent’s Medical Center in Bridgeport costs $3,800 but only $1,400 at Bridgeport Hospital, which is owned by Yale New Haven Health. At Hartford Hospital, the procedure costs $2,200, but only costs $1,800 at St. Francis Hospital, also based in Hartford and owned by Trinity Health of New England.

The majority of employers who offer health benefits do so either through a fully funded plan or a self-funded plan. In a fully funded plan, the health insurer assumes the risk and pays for the health care costs, and the employer pays monthly premiums to the insurer. In a self-funded plan, the employer assumes the risk and pays for health costs directly.

Most large employers opt for self-funded plans. Both River Valley Transit and Teamsters 671 Health Service & Insurance Plan have self-funded plans.

The proposed class in the lawsuit consists of all insurers or health plans that paid or reimbursed the named Hartford HealthCare entities for general acute care or outpatient services in the Bridgeport, Hartford, Meriden, Norwich, Torrington and Willimantic health service areas since June 2020. The plaintiffs are seeking financial damages and a determination that Hartford HealthCare and its subsidiaries engaged in unlawful conduct.

HHC has been able to charge these higher prices, according to the complaint, by using its market dominance to, among other tactics, engage in anticompetitive practices when negotiating with insurance agencies, including “all-or-nothing contracts” and “anti-steering and anti-tiering” clauses.

According to a September 2021 presentation to the state legislature’s Insurance and Real Estate Committee, “all-or-nothing contracts” require insurers to include all of a network’s facilities in its coverage plan, regardless of how expensive they are.

“Anti-steering and anti-tiering” clauses limit an insurers’ ability to guide members towards providers that they believe offer quality care at a competitive price. The lawsuit alleges that HHC used such provisions to prevent health plans from creating tools that “would otherwise create incentives designed to steer members away from more expensive hospital service providers like HHC and towards more efficient, lower-priced competitors.”

Hartford HealthCare is one of Connecticut’s two largest health systems, along with Yale New Haven Health. Unlike HHC, YNHH has not been targeted in the courts for anticompetitive practices in recent years.

Matthew Ruan, one of the attorneys representing the plaintiffs, said that there’s been more publicly available information regarding the anti-competitive practices of Hartford HealthCare compared to Yale New Haven Health.

“If it turns out that Yale New Haven — and we may find this out in discovery, who knows — that they’re engaged in similar practices, then that’s something we’ll investigate at that time,” said Ruan.

The arguments made in the complaint mirror those made in the two other lawsuits brought against Hartford HealthCare within the past two and a half years.

In January 2022, St. Francis Hospital, based in Hartford, filed a lawsuit against Hartford HealthCare and several of its subsidiaries, claiming that the health system is trying to create a monopoly on hospital services by acquiring physician networks, particularly cardiologists, and demanding that they refer their patients only to Hartford HealthCare.

The following month, a group of Connecticut residents filed a proposed class-action lawsuit against the network, alleging that it uses its market dominance to charge higher prices to the state’s commercially insured residents.

Both cases are currently in the discovery phase, where the parties exchange information about the evidence they’ll present at trial.

Katy Golvala is a reporter for The Connecticut Mirror (https://ctmirror.org/ ). Copyright 2024 © The Connecticut Mirror.