U.S. Antitrust Investigation Examines Partners' Contracts

The Boston Globe reports this morning that the U.S. Department of Justice is investigating Partners HealthCare System, Inc., the most influential hospital and doctor group in the state, for possble anticompetitive behavior related to their contracts with health insurers.

Reporters Robert Weisman and Liz Kowalczyk, citing a letter sent to Partners from the DOJ, say that the government has requested documents related to Partners' contracts with three large insurers, Blue Cross, Harvard Pilgrim and Tufts Health, and for related material on contracting and other health care practices in the marketplace. The story says:

The letter, obtained by the Globe, said the probe sought to determine whether the practices violated the Sherman Antitrust Act, which bars companies from using their market power to limit trade or artificially raise prices. The parties were told to respond by May 19.

In a separate correspondence, the parties were ordered to provide specific information about how Partners negotiates contracts with health insurance carriers and how much its Boston teaching hospitals, including Massachusetts General Hospital and Brigham and Women’s Hospital, are reimbursed, according to industry executives. They spoke on the condition of anonymity because they weren’t authorized to discuss the Justice Department inquiry.

Federal investigators typically subpoena documents from health care providers and insurers before deciding whether to file a complaint with formal allegations. In past instances where Justice Department officials have alleged antitrust violations against providers, the cases usually have been settled with agreements that providers change their practices or strike anticompetitive language from their contracts.