City Files Antitrust Suit Against HCA, Claiming "Monopoly" Has Led to Skyrocketing Costs

The suit says HCA Healthcare Inc., which owns Transylvania Regional Hospital, has used its market dominance to drive up prices to the highest levels in the state.

BREVARD — The city of Brevard filed a federal class-action antitrust lawsuit Friday that says HCA Healthcare Inc.’s monopoly in Western North Carolina has caused skyrocketing medical costs and “dramatically worsened facility conditions and patient service.”

The arguments in the suit mirror those in a class-action claim filed last August in Buncombe County Superior Court on behalf of six local residents. But the city’s lawsuit, the document says, focuses on the burdens HCA’s “unlawful restraint of trade and monopolization” has placed on self-insured entities such as Brevard. The suit was filed in US District Court in Asheville rather than Superior Court, said City Attorney Mack McKeller, because it relies on federal antitrust laws.

Mission Health, which owns Mission Hospital in Asheville as well as smaller facilities throughout Western North Carolina, acquired Transylvania Regional Hospital in 2012.

Mission Health was purchased for $1.5 billion in 2019 by HCA, which the suit calls “the world’s largest for-profit hospital chain.”

The Mission system dominates the market for inpatient care throughout the region, the lawsuit says, and holds a 79 percent market share in Transylvania County. 

The claim, like the one filed in August, provides a window on the prices charged throughout the system and at its Asheville flagship, Mission Hospital — prices HCA has failed to disclose in violation of a 2021 federal rule requiring healthcare pricing transparency, the suit said.

“Were HCA to comply and reveal to consumers and regulators the true prices that it charges, the public would know that HCA’s prices in the relevant markets are by far the highest in North Carolina,” the complaint says.

Citing a private database, it says “Mission Hospital-Asheville (has) charged commercial insurers 305% above the Medicare price” for inpatient services compared to a statewide average of 211 percent more than Medicare.

One of several examples listed in the suit was the cost of a shoulder arthroscopy: “The Mission-Asheville price for this procedure was $2,419 — nearly three times the statewide average of $897.”

Though the 2021 suit also documents the resulting higher prices of private medical insurance in the region, the city’s action addresses direct costs to self-insured entities, which can include cities, counties and some large private companies, McKeller said.

Though Brevard has paid “significantly more” for employee medical care in recent years, he said, it has not established the amount of these increases that can be attributed to HCA’s practices.

Once the city’s burden is tallied, however, the suit seeks a three-fold reimbursement of this amount, as well as an end to the conditions that allow HCA to charge “artificially inflated supracompetitive prices.”

“If HCA has increased the amount we have to pay because of monopolistic practices, the damages will be tripled as a way of punishing it for being a monopoly,” McKeller said.

One of the two law firms representing the city is Berger Montague, which has offices in several major cities and “is one of the nation’s most experienced and successful complex litigation firms,” a city press release said.

The claim also requests a reimbursement of legal fees, but McKeller said that even if the city loses the suit “we are not liable to the attorneys to pay them anything.”

The City Council agreed to go forward with the suit in a closed session about two months ago, McKeller said.

Nancy Lindell, Mission Health’s media relations director, said in an email the company had not been served with the suit and would “respond appropriately through the legal process.” But she did push back on the suit’s contention that it had neglected care at Transylvania Regional, where the company has invested more than $14 million in equipment and “infrastructure projects,” she wrote.

HCA has also recently added five primary care doctors locally and “renovated the primary care practices,” she wrote.

Mayor Maureen Copelof, who is the city’s designated liaison with HCA and, in the past, a harsh critic of its management of Transylvania Regional, said in the press release that the city has a responsibility to ensure quality healthcare for its residents.

“Over the past few years, our community has repeatedly expressed concerns over the degradation of health services, the difficulty in obtaining services, and the high cost of these services,” she said in the release. “Our attempts to address these concerns directly with HCA have been rebuffed.” 

In a recent interview she praised HCA Chief Executive Officer Sam Hazan for traveling to Brevard to meet with her and former members of the hospital board. She also said the meeting had left her cautiously optimistic the company will be more responsive to residents’ concerns.

On Friday, she said the suit shouldn’t derail that progress.

“There’s really two separate sides to this,” she said. The issues raised in the lawsuit are “completely different from the disconnect that exists between the community and HCA on delivering health services.”

That’s not the way HCA sees it, Lindell wrote, calling the lawsuit “beyond disappointing . . . We (had) hoped that meeting would be the beginning of a thoughtful and ongoing dialog about healthcare in the City of Brevard.”

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