Four Michigan Hospitals Sued for Alleged Unlawful Agreement To Limit Their Marketing

162017_132140396847214_292624_nOn June 25, 2015, the U.S. Department of Justice filed a lawsuit in the U.S. District Court for the Eastern District of Michigan against four Michigan hospital systems, each of which were the only hospitals in the Michigan counties they served, alleging that they unlawfully agreed to allocate territories for marketing, thereby depriving consumers and physicians of important information about competing providers and other benefits of unfettered competition.

Three of the hospital systems have agreed to settle the charges filed against them (the proposed settlement agreements were filed at the same time that the federal lawsuit was filed, which must be approved by a federal judge), but one of the hospital systems – W.A. Foote Memorial Hospital D/B/A as Allegiance Health (“Allegiance”) – has not agreed to settle at this time.

Hospitals compete to attract patients by advertising, direct mailings to patients, outreach to physicians and employers, conducting health fairs, and by offering free health screenings. The federal charges allege that one of the hospitals had curtailed its marketing competition by entering into agreements with Allegiance and the other two hospitals to limit the marketing of competing healthcare services that deprived patients and physicians of information needed to make informed healthcare decisions, and that patients in one county in Michigan were also prevented from receiving free medical services that they would have received from Allegiance in the absence of its unlawful agreement with the hospital located in that county.

The proposed settlement with the three hospitals would prohibit them from agreeing with other healthcare providers, including hospitals and physicians, to limit marketing or to divide any geographic market or territory, and would prohibit communications among them about their marketing activities (subject to limited exceptions). The settling hospitals would also be required to implement compliance measures intended to prevent the recurrence of anticompetitive practices in the future.

An Assistant Attorney General in the Antitrust Division of the U.S. Department of Justice stated in a written statement issued shortly after the federal lawsuit was filed, “These hospitals conspired to deprive consumers and physicians of important health information and education. Instead of putting patients first, these hospitals secretly agreed not to compete. This action will terminate the agreements limiting marketing and make sure the citizens of south-central Michigan will have access to the facts they need to make informed healthcare choices.”

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Allegiance issued a statement on June 25, 2015, stating in part:  ” … despite our cooperation with the Justice Department and the Attorney General’s Office in their investigation, these regulators have misinterpreted Allegiance’s conduct … facts will show that despite the regulators’ contention that Allegiance agreed with Hillsdale Community Health Center to reduce competition by limiting its advertising in Hillsdale County, the number of patients from Hillsdale County seen at Allegiance has significantly increased over time across our entire spectrum of services. Additionally, Allegiance’s approach to Hillsdale has also made critical services not available in Hillsdale County, including Allegiance’s open heart program, much more accessible for those citizens. Ultimately, Allegiance’s marketing strategy has greatly benefitted consumers.”

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If you were seriously injured as a result of hospital malpractice in Michigan or in another U.S. state, you should promptly find a Michigan medical malpractice lawyer (or a medical malpractice lawyer in your state) who may investigate your medical malpractice claim for you and represent you in a medical malpractice case, if appropriate.

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This entry was posted on Monday, June 29th, 2015 at 5:34 am. Both comments and pings are currently closed.

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