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HCA Healthcare was slapped with a class-action , which accused the health system of engaging in anticompetitive practices that drove up costs and diminished the quality of patient care after it acquired Western North Carolina's Mission Health.

However, the suit -- brought by a group of local residents -- alleged monopolistic conduct by Mission Health even before its $1.5 billion sale to HCA in 2019, as changes to oversight of a prior Mission merger contributed to stifling competition. HCA took advantage of these conditions, and failed to comply with a federal hospital price transparency rule that took effect earlier this year, it alleged.

"Like Mission before it, HCA has used improper restraints in its agreements and arrangements with commercial health plans and third-party administrators, including tying, all-or-nothing arrangements, gag clauses, and on information and belief, other anticompetitive terms and negotiating devices," legal counsel for the plaintiffs wrote in the complaint.

"HCA has also refused to fully comply with a rule enacted by President Trump's Administration to increase transparency in healthcare pricing," they continued. "Were HCA to comply and reveal to consumers and regulators the true prices that it charges, the public would know that HCA/Mission's prices for key services are by far the highest in North Carolina."

For instance, within a large commercial claims dataset, HCA's average allowed amounts earned from commercial health plans for C-sections without complications at Mission Hospital in Asheville were approximately $9,764 in 2019 and $10,077 in 2020. The complaint stated that the average allowed amounts at all other North Carolina hospitals were $4,287 in 2019 and $4,373 in 2020.

Even after new federal regulation required the public disclosure of HCA's negotiated prices with private insurance companies, HCA has failed to disclose the information in a timely and understandable manner, the complaint continued. "By violating this price disclosure regulation, and by including gag clauses in HCA/Mission's provider agreements with insurers, defendants have kept community members, regulators, and the general public from learning of the grossly inflated, monopolistic prices that are being charged."

In order to maximize profits, HCA has cut costs and staff, leaving Western North Carolinians with "increasingly bad healthcare at an ever-growing pace," the suit added.

The suit also alleged that the original monopoly in Western North Carolina dates back to the 1990s, when a legacy Mission entity merged with its only significant competitor in the region, St. Joseph's Hospital, via the issuance of a certificate of public advantage (COPA).

As previously reported, COPAs vary from state to state, but the Federal Trade Commission defines them generally as regulatory regimes adopted by state governments to displace competition among healthcare providers and immunize mergers and other deals from antitrust scrutiny.

The complaint stated that, in 2016, after years of lobbying by Mission executives, North Carolina repealed the COPA, "leaving in place an unregulated monopoly." When HCA purchased Mission Health about 3 years later, "HCA did so precisely because of Mission's outsized ability to dictate prices and other contract terms to its customers," it continued.

The suit also alleged that neither HCA nor Mission Health acquired monopoly power "by outcompeting rivals on price and quality as our antitrust laws envision." Rather, "Mission became a monopoly solely by virtue of a merger that would have been unlawful under the antitrust law but that was shielded from suit by the protection the COPA gave from antitrust scrutiny," the complaint stated.

In an emailed statement, Nancy Lindell, the North Carolina Division spokesperson for Mission Health/HCA Healthcare, said, "Once we have been served with the lawsuit, we will respond appropriately through the legal process."

She added: "We are committed to caring for Western North Carolina as demonstrated through more than $330 million in charity care and uninsured discounts we provided in 2020, expansion of hospital services including the opening of the North Tower, a new pediatric ER, and securing land for a new 120-bed behavioral health hospital. Further, we have invested in our colleagues with onboarding nearly 1,200 new members this year and providing more than $3 million in student loan and tuition reimbursement in 2020. Mission Health is committed to the health and well-being of every person who comes to us for care and we are proud of our dedicated hospital teams that are facing the many challenges of this pandemic and the exceptional care they have provided to our patients."

The lawsuit comes as Mission Health facilities face ongoing scrutiny regarding the departure of physicians following its acquisition by HCA and reports from the local community of decreases in its quality of care, . Such lawsuits could become more frequent, given new federal regulations that require hospitals to post prices, .

The plaintiffs are represented by Wallace & Graham of Salisbury, North Carolina, and Fairmark Partners of Washington, D.C. Mona Lisa Wallace of Wallace & Graham declined to comment on pending litigation.

"HCA's behavior since taking over Mission, and Mission's prior abuse of its monopoly power, exemplify why healthcare in the United States costs so much more than elsewhere," they wrote in the complaint.

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