AG Tong: Plaintiffs have standing in Hartford HealthCare antitrust case

On Monday, Attorney General William Tong’s office urged the court to reject the basis of part of Hartford HealthCare’s argument to dismiss an antitrust case filed against the hospital system.

The original proposed class-action lawsuit filed in February 2022 alleged the network uses its market dominance to charge higher prices to the state’s commercially insured residents. 

“As one of Connecticut’s major hospital networks, the result of HHC’s anticompetitive conduct has been a dramatic increase in prices on acute care and in the cost of commercial health insurance for commercially insured individuals and their employers,” stated the lawsuit.

Hartford HealthCare deemed the complaint “without merit” and, in December, filed a motion to dismiss it, arguing that among other points, the plaintiffs can’t sue under the Connecticut Antitrust Act because they are “indirect purchasers” of the hospital’s services. The motion stated that patients don’t qualify as “direct purchasers” because they are paying for hospital services through an insurer or an employer.

But, in the brief filed Monday, the AG’s office disagreed with that interpretation.

The brief explains that, in 2018, Connecticut passed a state law affirming the right of indirect purchasers to sue under the Connecticut Antitrust Act. Connecticut is one of thirty-six states that have passed such a law.

“In his recently filed brief, the Attorney General wrote for the limited purpose of addressing Conn. Gen. Stat. § 35-46a and explicitly took no position on any other factual or legal issues in the case,” wrote Hartford HealthCare spokesperson Rebecca Stewart in emailed comments. “We continue to believe that this lawsuit has no merit, and we await the court’s action.”

“As a member of the class, I’m very encouraged by the filing and hope that we as Connecticut consumers will get our day in court,” said Joshua Pawelek, one of the plaintiffs named in the case and the reverend at Unitarian Universalist Society: East in Manchester, which has struggled to provide health coverage for its employees in the face of increasing premiums. 

“Connecticut consumers ultimately pay the price for anticompetitive actions by health care conglomerates, and the General Assembly gave those consumers access to the Connecticut court system,” stated Jamie Crooks, partner at Fairmark Partners LLP, one of the law firms representing the plaintiffs.

Hospitals in the hot seat

The move by the attorney general’s office comes in the midst of a legislative session where Gov. Ned Lamont has made hospital costs and competition a priority.

A pair of cost containment bills proposed by the governor include a proposed ban on what health care advocates call anticompetitive contract language in negotiating with insurance agencies, including “all-or-nothing contracts,” “anti-steering and anti-tiering” and gag clauses. Lawmakers considered a similar proposal last year. 

The antitrust suit against Hartford HealthCare alleges that the company employed these tactics to stifle competition, which in turn drove up prices for patients.

In submitted written testimony, the Connecticut Hospital Association said that banning all-or-nothing contracts and anti-steering clauses could impact patient access and continuity of care. 

“Hospitals and health systems are still facing the extreme aftershocks of a staggering once-in-a-century public health crisis, and this is not the time to consider the significant changes to the health care delivery system that are proposed in SB 983,” stated the testimony.

Other measures proposed by the governor include a ban on outpatient facility fees that cost Connecticut consumers $400 million annually, a cap on out-of-network patient costs and a commitment to join a multi-state program that offers lower prices through the bulk purchase of generic drugs.

“The system is broken,” said Lamont at a press conference last month.