United States District Court, W.D. North Carolina, Charlotte Division
UNITED STATES OF AMERICA and THE STATE OF NORTH CAROLINA, Plaintiffs,
THE CHARLOTTE-MECKLENBURG HOSPITAL AUTHORITY d/b/a CAROLINAS HEALTHCARE SYSTEM, Defendant.
J. Conrad, Jr. United States District Judge.
MATTER comes before the Court on Plaintiff United
States' Unopposed Motion for Entry of Modified Proposed
Final Judgment, (Doc. No. 98), and the parties'
associated briefs and exhibits. WHEREAS, Plaintiffs, the
United States of America and the State of North Carolina
(collectively “Plaintiffs”), filed their
Complaint on June 9, 2016; Plaintiffs and Defendant The
Charlotte-Mecklenburg Hospital Authority d/b/a Atrium Health
f/k/a Carolinas HealthCare System (collectively the
“Parties”), by their respective attorneys, have
consented to the entry of this Final Judgment without trial
or adjudication of any issue of fact or law;
WHEREAS, this Final Judgment does not constitute any evidence
against or admission by any party regarding any issue of fact
WHEREAS, the Plaintiffs and Defendant agree to be bound by
the provisions of this Final Judgment pending its approval by
WHEREAS, the essence of this Final Judgment is to enjoin
Defendant from prohibiting, preventing, or penalizing
steering as defined in this Final Judgment;
THEREFORE, before any testimony is taken, without trial or
adjudication of any issue of fact or law, and upon consent of
the parties, it is ORDERED, ADJUDGED, AND DECREED:
Court has jurisdiction over the subject matter of and each of
the Parties to this action. The Complaint states a claim upon
which relief may be granted against Defendant under Section 1
of the Sherman Act, as amended, 15 U.S.C. § 1.
purposes of this Final Judgment, the following definitions
A. “Benefit Plan” means a specific set of health
care benefits and Healthcare Services that is made available
to members through a health plan underwritten by an Insurer,
a self-funded benefit plan, or Medicare Part C plans. The
term “Benefit Plan” does not include workers'
compensation programs, Medicare (except Medicare Part C
plans), Medicaid, or uninsured discount plans.
B. “Carve-out” means an arrangement by which an
Insurer unilaterally removes all or substantially all of a
particular Healthcare Service from coverage in a Benefit Plan
during the performance of a network-participation agreement.
C. “Center of Excellence” means a feature of a
Benefit Plan that designates Providers of certain Healthcare
Services based on objective quality or quality-and-price
criteria in order to encourage patients to obtain such
Healthcare Services from those designated Providers.
D. “Charlotte Area” means Cabarrus, Cleveland,
Gaston, Iredell, Lincoln, Mecklenburg, Rowan, Stanly, and
Union counties in North Carolina and Chester, Lancaster, and
York counties in South Carolina.
E. “Co-Branded Plan” means a Benefit Plan, such
as Blue Local with Carolinas HealthCare System, arising from
a joint venture, partnership, or a similar formal type of
alliance or affiliation beyond that present in broad network
agreements involving value-based arrangements between an
Insurer and Defendant in any portion of the Charlotte Area
whereby both Defendant's and Insurer's brands or
logos appear on marketing materials.
F. “Defendant” means The Charlotte-Mecklenburg
Hospital Authority d/b/a Atrium Health f/k/a Carolinas
HealthCare System, a North Carolina hospital authority with
its headquarters in Charlotte, North Carolina; and its
directors, commissioners, officers, managers, agents, and
employees; its successors and assigns; and any controlled
subsidiaries (including Managed Health Resources), divisions,
partnerships, and joint ventures, and their directors,
commissioners, officers, managers, agents, and employees; and
any Person on whose behalf Defendant negotiates contracts
with, or consults in the negotiation of contracts with,
Insurers. For purposes of this Final Judgment, an entity is
controlled by Defendant if Defendant holds 50% or more of the
entity's voting securities, has the right to 50% or more
of the entity's profits, has the right to 50% or more of
the entity's assets on dissolution, or has the
contractual power to designate 50% or more of the directors
or trustees of the entity. Also for purposes of this Final
Judgment, the term “Defendant” excludes MedCost
LLC and MedCost Benefits Services LLC, but it does not
exclude any Atrium Health director, commissioner, officer,
manager, agent, or employee who may also serve as a director,
member, officer, manager, agent, or employee of MedCost LLC
or MedCost Benefit Services LLC when such director,
commissioner, officer, manager, agent, or employee is acting
within the course of his or her duties for Atrium Health.
MedCost LLC and MedCost Benefits Services LLC will remain
excluded from the definition of “Defendant” as
long as Atrium does not acquire any greater ownership
interest in these entities than it has at the time that this
Final Judgment is lodged with the Court.
G. “Healthcare Provider” or
“Provider” means any Person delivering any
H. “Healthcare Services” means all inpatient
services (i.e., acute-care diagnostic and
therapeutic inpatient hospital services), outpatient services
(i.e., acute-care diagnostic and therapeutic
outpatient services, including but not limited to ambulatory
surgery and radiology services), and professional services
(i.e., medical services provided by physicians or
other licensed medical professionals) to the extent offered
by Defendant and within the scope of services covered on an
in-network basis pursuant to a contract between Defendant and
an Insurer. “Healthcare Services” does not mean
management of patient care, such as through population health
programs or employee or group wellness programs.
I. “Insurer” means any Person providing
commercial health insurance or access to Healthcare Provider
networks, including but not limited to managed-care
organizations, and rental networks (i.e., entities
that lease, rent, or otherwise provide direct or indirect
access to a proprietary network of Healthcare Providers),
regardless of whether that entity bears any risk or makes any
payment relating to the provision of healthcare. The term
“Insurer” includes Persons that provide Medicare
Part C plans, but does not include Medicare (except Medicare
Part C plans), Medicaid, or TRICARE, or entities that
otherwise contract on their behalf.
J. “Narrow Network” means a network composed of a
significantly limited number of Healthcare Providers that
offers a range of Healthcare Services to an Insurer's
members for which all Providers that are not included in the
network are out of network.
K. “Penalize” or “Penalty” is broader
than “prohibit” or “prevent” and is
intended to include any contract term or action with the
likely effect of significantly restraining steering through
Steered Plans or Transparency. In determining whether any
contract provision or action “Penalizes” or is a
“Penalty, ” factors that may be considered
include: the facts and circumstances relating to the contract
provision or action; its economic impact; and the extent to
which the contract provision or action has potential or
actual procompetitive effects in the Charlotte Area.
L. “Person” means any natural person,
corporation, company, partnership, joint venture, firm,
association, proprietorship, agency, board, authority,
commission, office, or other business or legal entity.
M. “Reference-Based Pricing” means a feature of a
Benefit Plan by which an Insurer pays up to a
uniformly-applied defined contribution, based on an external
price selected by the Insurer, toward covering the full price
charged for a Healthcare Service, with the member being
required to pay the remainder. For avoidance of doubt, a
Benefit Plan with Reference-Based Pricing as a feature may
permit an Insurer to pay a portion of this remainder.
N. “Steered Plan” means any Narrow Network
Benefit Plan, Tiered Network Benefit Plan, or any Benefit
Plan with Reference-Based Pricing or a Center of Excellence
as a component.
O. “Tiered Network” means a network of Healthcare
Providers for which (i) an Insurer divides the in-network
Providers into different sub-groups based on objective price,
access, and/or quality criteria; and (ii) members receive
different levels of benefits when they utilize Healthcare
Services from Providers in different sub-groups.
P. “Transparency” means communication of any
price, cost, quality, or patient experience information
directly or indirectly by an Insurer to a client, member, or