The Justice Department has launched an investigation into whether the NewYork-Presbyterian health system engaged in anticompetitive practices by striking secret agreements with insurance companies to keep hospital prices artificially high. A subpoena obtained by a major news outlet indicates that federal investigators are examining if NewYork-Presbyterian pushed insurers to accept terms that shielded the hospital system from competition, allowing it to charge premium rates for common medical procedures with limited risk of losing patients. This civil inquiry targets the often opaque negotiations between hospitals and insurers, a sector that has largely escaped antitrust scrutiny except in a few states in recent years.
The investigation could have major implications for New York City’s largest hospital systems, potentially fostering more competitive pricing for services like childbirth, knee replacements, and colonoscopies. NewYork-Presbyterian includes prestigious institutions such as Columbia University Medical Center and Weill Cornell Medical Center. The probe was sparked by a labor union health fund’s complaints about the hospital’s high prices and tactics to block patients from choosing lower-cost providers. The union, representing thousands of New York workers, accused NewYork-Presbyterian of thwarting efforts to steer members toward cheaper hospitals through restrictive contracts with insurers. The union’s attempt to exclude NewYork-Presbyterian from its provider network faced obstacles as insurers reportedly had separate agreements preventing such exclusions. If confirmed, these practices could reveal how private hospital contracts limit competition and keep prices elevated, raising questions about transparency and fairness in healthcare pricing.