The Department of Justice (DOJ) sued four hospital systems that it says for years unlawfully agreed to allocate territories for marketing, which it says denied consumers and physicians important information about competing providers and other benefits of unfettered competition.
Three of the systems — Hillsdale (MI) Community Health Center; Community Health Center of Branch County, MI, and ProMedica Health System in Toledo, OH — agreed to settle the charges. DOJ continues to litigate against W.A. Foote Memorial Hospital in Jackson, MI, now doing business as Allegiance Health, to prohibit agreements that unlawfully allocate territories for marketing of competing healthcare services.
Hillsdale, Allegiance, Community Health Center, and ProMedica’s Bixby and Herrick hospitals — the only hospitals in their respective counties — each competed through marketing to attract patients. The complaint alleges that Hillsdale curtailed this competition for years by entering into agreements with Allegiance, Community Health Center, and ProMedica to limit the marketing of competing services. According to the complaint, the defendants’ agreements deprived patients and physicians of information needed to make informed healthcare decisions. Patients in Hillsdale County, MI, also were prevented from receiving free medical services, such as health screenings and physician seminars, that they would have received from Allegiance in the absence of its unlawful agreement with Hillsdale.
The proposed settlement prohibits Hillsdale, Community Health Center, and ProMedica from agreeing with other health providers, including hospitals and physicians, to limit marketing or to divide any geographic market or territory. The proposed settlement also prohibits communications among the defendants about their marketing activities, subject to limited exceptions. These hospitals also will implement compliance measures to prevent anticompetitive practices.