Advocate Aurora faces lawsuit over all-or-nothing contracting

Advocate Aurora faces lawsuit over all-or-nothing contracting


Dive Temporary:

  • Advocate Aurora Well being is dealing with allegations of unlawfully utilizing its market energy in Wisconsin to boost healthcare costs, in keeping with a federal lawsuit filed Tuesday.
  • Uriel Pharmacy Well being, a Wisconsin enterprise with a self-funded well being plan, filed go well with Tuesday within the Jap District of Wisconsin, alleging the Midwest system overcharged for providers and compelled employers into “all-or-nothing” contracting, requiring all of Advocate Aurora’s amenities to be included in-network.
  • Advocate Aurora mentioned in a press release it’s “mounting what will likely be a vigorous protection as all of our choices are guided by a relentless pursuit to supply the very best high quality, reasonably priced look after our sufferers.”

Dive Perception:

The lawsuit alleges Advocate Aurora Well being has used plenty of anticompetitive practices to inflate healthcare costs at a price to Wisconsin companies.

Restrictive contracting phrases have prevented employers from curbing prices, the lawsuit, which is searching for class motion standing, claims.

Advocate Aurora has allegedly gone to “extraordinary lengths” to restrict insurance coverage merchandise that search to exclude sure Advocate Aurora Well being amenities that might save employers cash. As an alternative, Advocate Aurora requires all-or-nothing contracting, that means if one facility is in-network, all Advocate Aurora amenities should be included in an employer’s insurance coverage community.

In consequence, these anticompetitive contracts enable Advocate Aurora to cost greater costs than rivals, in keeping with the lawsuit.

The value for a hip or knee alternative at an Advocate Aurora facility in Milwaukee is $62,538, greater than $21,000 above a competitor’s value 5 minutes away, the lawsuit alleges.

Advocate Aurora’s outsized presence in native markets in flip results in a “systemwide energy that offers it market energy over its complete service space,” in keeping with the lawsuit. Advocate Aurora operates hospitals throughout Illinois and Wisconsin.

“Our grievance alleges that Advocate Aurora’s anticompetitive conduct has unlawfully taken large sums of cash from the pockets of Wisconsin employers to fund the hospital system’s endless growth throughout the nation,” mentioned Jamie Crooks, managing companion of Fairmark Companions, LLP, which represents the plaintiffs.

The lawsuit comes on the heels of Advocate Aurora’s announcement that it’s merging with Atrium Well being to create one of many nation’s largest well being techniques with $27 billion in income.

The deal would create a 67-hospital system that spans six states throughout elements of the Midwest and the South.

All-or-nothing contracting caught the eye of the previous California legal professional common after Sutter Well being confronted an analogous go well with introduced by a grocer’s union in 2014.

HHS Secretary Xavier Becerra, then California AG, reached a $575 million antitrust settlement in 2019 with Sutter that barred the system from partaking within the all-or-nothing contracting amongst different circumstances.



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