Dive Brief:

• The Justice Department on Thursday filed a lawsuit against NewYork-Presbyterian, accusing the nonprofit health system of using its market power to negotiate anticompetitive contracts with health insurers.
• The regulator alleges the health system uses its powerful market share in New York City to force insurers into “all-or-nothing” contracts. Insurers must include all of NewYork-Presbyterian’s facilities in nearly every network or forgo including them at all, the Justice Department said, and the contracts have prevented insurers from offering cheaper health plans.
• It’s a similar lawsuit to one regulators filed last month against OhioHealth, which also accused the health system of using its market power to ink anticompetitive contracts with insurers.

Dive Insight:

NewYork-Presbyterian’s contracts “reduce competition among hospitals, raise healthcare costs, and deny consumers seeking healthcare in New York City access to budget-conscious health insurance plans,” the DOJ said in the lawsuit, filed in district court for the Southern District of New York.

By forcing insurers to include NewYork-Presbyterian in all plan networks, NewYork-Presbyterian degrades plans’ “steering” features, which insurers design to nudge patients to less expensive providers. As a result, insurers can’t design cheaper plans and NewYork-Presbyterian effectively doesn’t have to compete with other hospitals on prices, the Justice Department said in its lawsuit.

NewYork-Presbyterian is the largest hospital system in Manhattan and the Four Boroughs. In 2024, the nonprofit made up more than 30% of the inpatient general acute care discharges in Manhattan and more than 25% in the four boroughs of Bronx, Brooklyn, Manhattan and Queens, the Justice Department said.

That market power allows it to exercise control over contract negotiations with insurers, who regulators say are forced to include NewYork-Presbyterian in nearly all networks or risk losing its outsized market share.

A NewYork-Presbyterian spokesperson told Healthcare Dive the lawsuit was “without merit.” Before the lawsuit was filed, the health system had cooperated with the Justice Department and begun what it thought were “proactive discussions” with the department’s leadership.

“We do not seek to exclude any other hospital from any insurer’s network. Nor do we require more favorable treatment than any other hospital,” they said. “Insurance companies hold the market power and use it to restrict patient choice.”

It’s the second antitrust lawsuit filed against a health system this year as the Trump administration attempts to rein in healthcare costs. Last month, the Justice Department filed a lawsuit against OhioHealth, arguing it raised healthcare prices for patients in Ohio by forcing insurers into “all-or-nothing” contracts.

The contracts are well-documented in the industry as health systems increasingly consolidate and gain greater market share and leverage in negotiations with insurers.

In 2019, California-based Sutter Health agreed to pay $575 million to settle allegations it engaged in similar contracts.