DOJ Sues NewYork-Presbyterian Over Anticompetitive Contracts Driving Up Healthcare Costs

Every New Yorker enrolled in a commercial health plan may have been paying more for hospital care than a competitive market would allow, the Justice Department argued Thursday, as it filed a federal antitrust lawsuit against the city's largest hospital system.

The Justice Department's Antitrust Division, together with the U.S. Attorney's Office for the Southern District of New York, filed a civil antitrust complaint charging NewYork-Presbyterian with violating Section 1 of the Sherman Act. In the 21-page complaint filed in the Southern District of New York, the DOJ claims NewYork-Presbyterian has "chosen to prevent competition from rival providers" for the past several decades.

The government's lawsuit describes NewYork-Presbyterian, which disclosed about $10.7 billion of operating revenue in its most recently reported fiscal year, as "the largest and most powerful hospital system in Manhattan and throughout New York City." It owns and operates eight hospitals and many outpatient facilities in the New York City area.

The core allegation is a contracting strategy designed to make NewYork-Presbyterian impossible to exclude. According to the complaint, NewYork-Presbyterian imposes plan restrictions in its contracts with payors that prevent payors from offering plans that do not include NewYork-Presbyterian or do not feature it in the most favored tier of the plan; it even forbids payors from offering lower copays when patients choose to receive care at its often lower-priced rivals. The DOJ contends that NewYork-Presbyterian has substantially higher prices than its competitors, even though its major competitors offer similarly high-quality healthcare.

Competitors named in the complaint include Mount Sinai, NYU Langone, and Northwell. The practical effect, according to the government, is that any insurer wanting to build a narrow or tiered network plan that steered patients toward lower-cost providers faced a contractual wall. As the DOJ wrote in the complaint: "NYP's restrictions deter the emergence and development of money-saving health insurance plans and reduce competition among hospitals and other providers on both price and quality. The result is reduced choice of insurance plans, higher healthcare costs, and less competition for high-quality healthcare for employers and patients who purchase healthcare in New York City."

Acting Assistant Attorney General Omeed A. Assefi framed the conduct as a deliberate choice. "New York-Presbyterian has known for years that the American consumer wants budget-conscious health plans that reduce healthcare costs. But rather than offer consumers choice, New York-Presbyterian uses its market power to protect its margins, impede competition from rival hospitals, and prevent employers and unions from creating these plans," Assefi said.

The suit seeks to enjoin NewYork-Presbyterian from imposing contractual restrictions that preclude insurers and employers from offering New Yorkers budget-conscious health insurance plans. The DOJ also asked the court to bar any anticompetitive substitutes the system might attempt in place of the challenged provisions.

The investigation had an unlikely origin inside the labor movement. The DOJ investigation followed a 2024 complaint from Local 32BJ of the Service Employees International Union, which claimed NewYork-Presbyterian used restrictive insurance agreements to block patients from lower-cost competitors.

The claims echo those made by the government last month in similar litigation against 16-hospital nonprofit OhioHealth. In February, the DOJ brought a lawsuit against OhioHealth, the largest health care system in central Ohio, similarly scrutinizing deals with insurers. The Justice Department characterized Thursday's filing as the second case the Division has brought this year to ensure that Americans can access healthcare markets with robust competition and receive high-quality, affordable care.

NewYork-Presbyterian pushed back sharply. A spokesperson told Courthouse News the system is disappointed in the DOJ's decision to file the lawsuit, "which we think is without merit," and noted that it had begun what it thought "were productive discussions with the department's leadership." In a fuller statement, the health system said it "complies fully with all applicable federal and state laws and regulations," adding: "We do not seek to exclude any other hospital from any insurer's network. Nor do we require more favorable treatment than any other hospital. In our contract negotiations with insurers, we seek to maximize access to the highest quality of care. Insurance companies hold the market power and use it to restrict patient choice."

The DOJ's position is that the unlawful restrictions insulate NewYork-Presbyterian from price competition, limiting its rival hospitals from competing for patients based on lower prices or better value, and prevent the development of budget-conscious plans for New Yorkers that are available in other parts of the United States. The case now sits before the U.S. District Court for the Southern District of New York, where the government is pressing for an injunction that could reshape how the city's dominant hospital system writes its insurer contracts.