DOJ Prioritizes Antitrust Enforcement Against Large Health Systems For Payor Contracting Practices

In what is now a trend, on March 26, 2026, the United States Department of Justice Antitrust Division (DOJ) filed an antitrust lawsuit against The New York and Presbyterian Hospital challenging its contracting practices with commercial health insurers (or payors). The lawsuit alleges that the hospital system used its market power to contractually restrict payors from offering health plans featuring lower-cost rival hospitals. The complaint is very similar to one filed by the DOJ and the State of Ohio against OhioHealth, the largest hospital system in central Ohio, in February. Both cases allege that the defendant hospital system’s restrictions prevent payors from introducing “budget-conscious plans” to the relevant markets, including through narrow networks and tiering. These enforcement actions make clear that the DOJ Antitrust Division is focused on certain payor contracting practices of large health systems, including “all or nothing” and anti-steering provisions, even when those systems face meaningful local competition. 

This Advisory analyzes the allegations in both complaints and provides takeaways for health systems as they navigate the current antitrust enforcement environment.

The New York and Presbyterian Hospital Case

The government alleges that The New York and Presbyterian Hospital (NYP), which operates eight hospitals in the New York area, is the largest and most powerful hospital system in Manhattan and throughout New York City.¹ The complaint asserts that NYP uses its market power over payors to extract high reimbursement rates and that NYP’s prices are substantially higher than those of its competitors, even though its major competitors offer similarly high-quality healthcare.²

The Contractual Restrictions: The complaint asserts that NYP leverages its market power to effectively force the major payors offering commercial insurance to patients in New York City to contract with it on an “all-or-nothing” basis. This, the government explains, means that the payor must include all of NYP’s hospitals (including associated outpatient facilities and other healthcare services) in its networks if it wants to have any NYP facilities or services in its network.³ The complaint further asserts that NYP requires that it be featured at the most favored level of benefits in each plan, regardless of how NYP’s prices compare to its competitors.⁴ These restrictions, the government alleges, deter payors accounting for a dominant majority of commercial health insurance business in New York City from introducing budget-conscious plans that exclude or charge more for access to NYP’s hospitals.⁵ The complaint’s allegations describe the tools that payors can use to create such plans, including narrow networks, tiering, centers of excellence, and site-of-service steering.⁶

Relevant Markets: As is typical in antitrust cases involving hospital markets, the alleged relevant product market is the sale of inpatient general acute care (GAC) hospital services to commercial payors and their members.⁷ The government claims two relevant geographic markets: the borough of Manhattan and the area comprising the boroughs of the Bronx, Brooklyn, Manhattan, and Queens (the Four-Borough Market).⁸ The government alleges that NYP, with six hospitals in New York City and four in Manhattan, including its two flagship facilities, is by far the largest hospital system in both markets.⁹ The government alleges that NYP’s competitors in Manhattan and New York City include three academic medical centers: Mount Sinai (with six hospitals in NYC, including four in Manhattan); NYU Langone (with three hospitals in NYC, including two in Manhattan); and Northwell (with six hospitals in NYC, including two in Manhattan).¹⁰ The complaint assesses the alleged relevant geographic markets using the hypothetical monopolist test (HMT) and asserts that both markets satisfy the HMT.¹¹ The government argues that in hospital markets, this means that payors would be forced to accept a price increase from a theoretical owner of all hospitals in the alleged relevant market for at least one hospital, since payors would not be competitive selling commercial health plans to area individuals and employers that did not include any hospitals in that market.¹²

Market Power: The complaint alleges that NYP has market power in both relevant markets and that its 2024 share of inpatient GAC hospital discharges was over 30% in Manhattan and over 25% in the Four-Borough Market.¹³ The government asserts that payors must have NYP as a participant in at least some of their provider networks to have successful health insurance products and that NYP exerts this leverage in payor negotiations to impose the contractual restrictions at issue (despite payors’ attempts to negotiate their removal).¹⁴ The government further asserts that the plan restrictions insulate NYP from price competition and NYP is therefore unconcerned by rivals’ offering lower prices, as evidenced by testimony from NYP’s most senior contracting executive that its rivals’ offering of lower prices to payors “has no relevance to me.”¹⁵

Anticompetitive Effects: The government asserts that the plan restrictions help NYP maintain supracompetitive prices for inpatient GAC services and make it difficult for other hospitals to win patients and market share from NYP by offering lower prices or better value.¹⁶ The complaint alleges that NYP’s restrictions deter the emergence of innovative and money-saving health insurance products, resulting in reduced choice of plans, higher healthcare costs, and less competition for high-quality healthcare.¹⁷ The government asserts that NYP recognizes that the plan restrictions benefit its bottom line, pointing to additional testimony from NYP’s most senior contracting executive that “[n]otwithstanding national and local trends to the contrary, [NYP] retained the Hospitals’ … terms and conditions that protect against administrative erosion of rates of payment or steerage away from the Hospitals.”¹⁸ The government also highlights an NYP analysis, which allegedly concludes that the introduction of tiered plans alone would reduce profits by hundreds of millions of dollars, and other forms of steerage would also cause that same outcome.¹⁹ In addition, the complaint separately details the alleged effects of the plan restrictions on outpatient services, providing examples of how the restrictions prevent rival providers from competing on price and protect NYP’s high prices for such services.²⁰

Causes of Action and Relief Sought: The government is seeking a declaration that NYP’s contractual restrictions violate Section One of the Sherman Act. It is also seeking to enjoin NYP from (1) enforcing any provision in any agreement that restricts a payor from informing members about financial incentives to use any healthcare provider;²¹ (2) engaging in other conduct replicating the effects of its plan restrictions; or (3) retaliating against payors for offering budget-conscious plans.²²

The OhioHealth Case

The government alleges that OhioHealth, which owns or manages 16 hospitals in the state, is the dominant hospital system in Columbus.²³ The complaint asserts that OhioHealth’s market power, evidenced in part by its “high market share,” allows it to charge payors much higher rates than its competitors despite the fact that it does not generally provide higher quality services.²⁴

The Contractual Restrictions: Similar to the NYP complaint, the government asserts that OhioHealth restricts payors accounting for at least 85% of commercial health insurance in the Columbus area from offering budget-conscious plans by effectively forcing them to include OhioHealth in all networks for all commercial insurance products and requiring that it be featured at the most favored level of benefits in each network regardless of price.²⁵ Unlike the NYP complaint, the government alleges that OhioHealth’s contractual restrictions prevent payors from providing patients with truthful information about the prices of healthcare services by limiting the dissemination of such information or setting other burdensome requirements on its disclosure. The government alleges that these price transparency restrictions act “effectively as gag rules.”²⁷

The Relevant Markets: As in the NYP case, the government alleges that the relevant product market is the sale of inpatient general acute care (GAC) hospital services to commercial payors and their members.²⁸ The government again claims two relevant geographic markets, which it alleges pass the HMT: the Central Columbus area, which comprises two counties and most of the city of Columbus, and a broader 10-county area not larger than the Columbus Metropolitan Statistical Area.²⁹ In the Central Columbus area, the government alleges there are only three systems: OhioHealth, with six area hospitals, including its flagship hospital; Ohio State, which operates a “leading regional academic medical center” and another area hospital; and Mount Carmel, which operates five area hospitals and holds a majority joint-venture interest in a sixth.³⁰

Market Power and Anticompetitive Effects: The government alleges that OhioHealth has market power in GAC services in both markets. In the broader Columbus MSA, the government asserts these three systems control more than 85% of inpatient GAC discharges.³¹ The complaint alleges that OhioHealth’s share of inpatient GAC discharges and hospital beds in both markets is over 35%.³² As in the NYP case, the government asserts that payors must include OhioHealth in at least some of their provider networks to have viable insurance products and are therefore forced to agree to the alleged contractual restrictions.³³ The complaint alleges anticompetitive effects similar to those alleged in the NYP case, including that the restrictions deter rival hospitals from competing for patients by lowering rates or investing in quality improvements.³⁴ Additionally, the government alleges that the price transparency restrictions prevent payors “even from informing patients that lower-cost options are available.”³⁵

Causes of Action and Relief Sought: The government is seeking essentially the same relief as in the NYP case. However, the case against OhioHealth also alleges a claim under Ohio’s antitrust statute, the Valentine Act, and seeks a declaration that this state law has also been violated.

Takeaways and What to Watch

• These cases show that the DOJ Antitrust Division is prioritizing enforcement regarding the payor contracting practices of large health systems, including “all or nothing” or anti-steering provisions, even when such systems face significant local competition. Indeed, as the NYP complaint states, NYP’s competitors include three major health systems, all of which are academic medical centers and operate multiple hospitals in the alleged relevant markets. Similarly, the complaint against OhioHealth describes it as the dominant area system while alleging that it faces competition from two area systems that appear to collectively account for a much larger share of the Central Columbus market than OhioHealth.³⁶
• Similar to the Federal Trade Commission’s (FTC) approach to analyzing hospital mergers, the complaints focus on bargaining dynamics between local hospitals and payors.³⁷ A key allegation in both cases is that payors “must have” NYP and OhioHealth, respectively, as participants in at least some of their provider networks to sell viable health insurance products. This, according to the government, is what enables the defendants to impose the contractual restrictions at issue. As the cases go forward, evidence regarding payors’ ability to construct marketable provider networks in the relevant areas with or without NYP or OhioHealth and their respective significant competitors is likely to be an important issue in assessing the competitive effects of the challenged conduct. The “must have” issue is particularly notable in the case against NYP where the defendant’s market shares in both relevant markets are alleged to be below the 35% threshold usually required to show market power in a rule of reason case.
• As is often the case in antitrust enforcement actions, ordinary course business documents and party testimony can play a central role in litigation. In the complaint against NYP (and unlike the complaint against OhioHealth), the DOJ prominently featured such evidence in support of its allegations regarding the contractual restrictions, market power, and anticompetitive effects.
• These lawsuits are significant developments, but not the first of their kind. Federal and state antitrust enforcers have brought antitrust actions in the past relating to similar contracting practices of alleged dominant health systems. For example, in 2016, the DOJ and the State of North Carolina sued Atrium Health (then Carolinas HealthCare System) challenging alleged “anti-steering” and price transparency provisions.^{38</sup The matter resulted in a 2018 settlement barring Atrium’s use of such provisions in the market at issue.39 Also in 2018, the California Attorney General filed a suit against Sutter Health on the basis of alleged restrictions, including purported “all-or-nothing” contracting, and “anti-incentive” provisions punishing plans for placing Sutter facilities on inferior tiers or otherwise incentivizing away from them.40 The consolidated settlement of that action and a related class action involved a $575 million payment.41}
• In other contexts, anti-steering provisions have been upheld by the courts. Perhaps most notably, in Ohio v. American Express, the Supreme Court found, when analyzing alleged restraints in the credit card market, that “there is nothing inherently anticompetitive about Amex’s antisteering provisions,” noting that such provisions stem negative externalities and can promote interbrand competition.⁴² As these cases proceed, it will be important to watch how the courts evaluate the instant alleged restrictions in the context of the healthcare industry.
• State Attorneys General are continuing to occupy an increasingly prominent and active role in the antitrust landscape, including through enforcement actions, new pre-merger notification laws, and pending legislation. However, states have long prioritized antitrust matters involving healthcare providers, particularly since these matters focus on local markets. While the number of state laws requiring notification for healthcare transactions is increasing,⁴³ there is nothing new about states partnering with the FTC or DOJ to challenge a merger or conduct in the hospital setting (as was done in the OhioHealth matter).

Footnotes

^{1 United States v. The New York and Presbyterian Hospital, Complaint ¶¶ 3, 8, No. 26-cv-2480 (S.D.N.Y. Mar. 26, 2026).}

^{2 Id. ¶¶ 10-11.}

^{3 Id. ¶ 11. In another paragraph in the complaint, the government alleges that NYP effectively forces payors to include NYP in “almost all”}

^{networks for commercial insurance products. Id. ¶ 25.}

^{4 Id. ¶ 25.}

^{5 Id. ¶ 26.}

^{6 Id. ¶¶ 19-23. As alleged in the complaint, narrow network plans incentivize providers to offer competitive prices in exchange for the}

^{added patient volume from being in a more limited network; tiered network plans use broad networks but reward members with lower}

^{out-of-pocket expenses if they choose cost-effective providers in a preferred tier; centers of excellence incentivize patients to seek specific}

^{services from designated providers that offer better value within a broad network; and site of service steering encourages patients to have}

^{procedures done at a lower-cost facility like an ambulatory surgery center rather than a hospital.}

^{7 Id. ¶ 27.}

^{8 Id. ¶¶ 31, 33.}

^{9 Id. ¶¶ 3, 8, 37. (“Its two flagship facilities are New York-Presbyterian/Columbia University Irving Medical Center and New}

^{York-Presbyterian/Weill Cornell Medical Center.”)}

^{10 Id. ¶ 9.}

^{11 Id. ¶¶ 32, 36.}

^{12 Id. ¶¶ 32, 36.}

^{13 Id. ¶ 37.}

^{14 Id. ¶¶ 39-40.}

^{15 Id. ¶ 38.}

^{16 Id. ¶¶ 42, 55.}

^{17 Id. ¶¶ 7, 55.}

^{18 Id. ¶ 43.}

^{19 Id. ¶ 44.}

^{20 Id. ¶¶ 47-48.}

^{21 The complaint (unlike the OhioHealth case) does not contain any allegations that NYP restricts payors from informing members about}

^{the price of healthcare services.}

^{22 Id.}

^{23 United States v. OhioHealth Corp., Complaint ¶¶ 7-8, 11, No. 2:26-cv-207 (S.D. Ohio Feb. 20, 2026).}

^{24 Id. ¶¶ 9-11.}

^{25 Id. ¶¶ 31-33.}

^{26 Id. ¶ 34.}

^{27 Id. ¶ 34.}

^{28 Id. ¶ 38. In both cases, the government alleges that defendants’ conduct also affects outpatient and other services, but neither asserts}

^{claims based on such other markets or defines a relevant market other than inpatient GAC services.}

^{29 Id. ¶¶ 42, 44-47.}

^{© Arnold & Porter Kaye Scholer LLP 2025 All Rights Reserved. arnoldporter.com}

^{30 Id. ¶ 8, ¶ 10, ¶ 44.}

^{31 Id. ¶ 48.}

^{32 Id. ¶ 49.}

^{33 Id. ¶¶ 50-51.}

^{34 Id. ¶¶ 31, 35.}

^{35 Id. ¶ 3. The government also alleges that the restrictions, which apply to all services it sells to payors (e.g., physician services, labs,}

^{imaging, etc.), also impact competition across those services. The complaint against NYP differs, though, in that it contains more detailed}

^{allegations regarding harm involving outpatient services. Id. ¶ 53.}

^{36 As referenced above, the complaint alleges that OhioHealth has a market share of over 35% in the Central Columbus market and there}

^{are only two other systems (which presumably account for all of the remaining share).}

^{37 While the FTC is the antitrust agency predominantly responsible for reviewing hospital mergers, including those involving non-profit}

^{health systems, the FTC does not generally have jurisdiction to pursue alleged anticompetitive conduct of non-profits. Accordingly, these}

^{actions are brought by the DOJ.} 

^{38 U.S. Dep’t of Justice,}

^{Justice Department and North Carolina Sue Carolinas Healthcare System to Eliminate Unlawful Steering Restrictions, June 9, 2016.}

^{39 United States v. The Charlotte-Mecklenburg Hosp. Auth., d/b/a Carolinas Healthcare System, Proposed Final Judgment, 83 Fed.}

^{Reg. 63,674 (Dec. 11, 2018).}

^{40 People of the State of California v. Sutter Health, Complaint, No. CGC-18-565398 (Cal. Super. Ct. Mar. 29, 2018).}

^{41 Att’y Gen. of Cal.,}

^{Attorney General Bonta Announces Final Approval of $575 Million Settlement with Sutter Health Resolving Allegations of}

^{Anti-Competitive Practices}

^{, Aug. 27, 2021.}

^{42 Ohio v. Am. Express Co., 585 U.S. 529, 553 (2018).}

^{43 At least 15 states have enacted healthcare transaction review laws requiring prior notice or approval of material healthcare}

^{transactions. See, e.g., Cal. Health & Safety Code § 127500 et seq.; Ind. Code § 25-1-8.5-1 et seq.; Mass. Gen. Laws ch. 6D, § 13; N.Y. Pub.}

^{Health Law §§ 4550-4552; Or. Rev. Stat. § 415.500 et seq.; Wash. Rev. Code § 19.390 et seq}

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