DOJ Reaches Settlement with Michigan Hospital on Allegedly Unlawful Marketing Agreement

On Friday, the U.S. Division of Justice (“DOJ”) Antitrust Division introduced a settlement with Henry Ford Allegiance Well being (“Allegiance”) of claims that Allegiance and sure different hospitals unlawfully agreed to not market to one another’s healthcare clients in central Michigan. Below the alleged conspiracy, Allegiance and three different well being programs agreed to not market their providers or to conduct affected person outreach in one another’s counties. See our alert on the Grievance right here.

Three of the 4 hospitals named within the unique swimsuit reached settlements with the DOJ and the Michigan Legal professional Normal (“AG”) in 2015. Allegiance was the ultimate defendant standing, and after motions for summary judgment were denied in May 2017, a bench trial was set to start March 6, 2018. As usually occurs in litigation, the looming prospect of trial introduced the events to the settlement desk.

Below the phrases of the proposed settlement, Allegiance is prohibited from coming into into any agreements with competing healthcare suppliers to limit its advertising and marketing practices or to allocate providers, clients, or geographic markets amongst opponents. Allegiance can be prohibited extra typically from speaking with competing healthcare suppliers in its geographic market, besides as could relate to the joint provision of providers or within the technique of potential mergers/acquisitions.

The settlement additionally requires Allegiance to undertake affirmative compliance duties, such because the hiring of an Antitrust Compliance Officer to watch for potential antitrust violations and to report back to the DOJ. Allegiance should undergo periodic information inspections by the DOJ or the Michigan AG and is required to pay $40,000 for litigation prices to the US and the State of Michigan. Below the Tunney Act, the proposed settlement shall be open for public remark for 60 days as soon as it’s revealed within the Federal Register.

Many events had hoped {that a} trial would offer much-needed steerage relating to the bounds of selling and referral agreements and their potential interpretation as market allocation agreements. As an alternative, advertising and marketing and referral preparations nonetheless represent a gray space of antitrust regulation and have to be designed with antitrust compliance in thoughts.

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