DOJ v. NewYork-Presbyterian - Hospital Antitrust Contract Restrictions

April 1, 2026

DOJ Continues Scrutiny of Health System Contracting in Second 2026 Antitrust Case

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The US Department of Justice Antitrust Division (DOJ) in March 2026 brought an antitrust action against NewYork-Presbyterian (NYP), alleging that the health system’s contracts with commercial payors restrict “budget-conscious plans” and are anticompetitive under the federal antitrust laws. The suit follows a similar recent action against OhioHealth and demonstrates DOJ’s commitment to challenging certain payor-provider contract restrictions that it believes limits the availability of more cost-effective healthcare plans for employers and patients.

On March 26, 2026, DOJ filed a civil lawsui t against NYP in the US District Court for the Southern District of New York, alleging violations of Section 1 of the Sherman Act. DOJ alleges that NYP unlawfully restrains competition in the market for inpatient general acute care hospital services by contracting with payors on an “all-or-nothing basis” and requiring that NYP be featured at the most favored level of benefits in each plan. According to DOJ, these “illegal contractual plan design restrictions” protect NYP’s market share, prevent rivals and potential entrants from competing on price to attract patients, result in fewer insurance plans for consumers to choose from, and increase costs for employers and patients.

DOJ further alleges that these restrictions prevented payors from using the following “tools” to develop “budget-conscious plans”:

• Narrow network plans: Healthcare plans with a relatively limited set of cost-effective providers
• Tiered network plans: Lower out-of-pocket expenses for members in broad networks who choose cost-effective providers in the preferred tier within the network
• Centers of excellence: Programs that incentivize members to obtain certain healthcare services from designated groups of providers that offer better value
• Site of service steering: Incentives for members to choose lower-cost locations, such as ambulatory surgery centers, over higher-cost locations, such as hospitals DOJ’s complaint defines two geographic markets—(1) a Manhattan market and (2) a combined Manhattan-Queens-Brooklyn-Bronx (Four-Borough) market—and alleges that NYP has market shares exceeding 30% and 25% in those alleged markets, respectively. These alleged market shares are relatively low for establishing market power in antitrust litigation. However, DOJ claims that NYP’s size, brand, and reputation give it market power because a payor selling health insurance plans to individuals or employers in these alleged geographic markets must have NYP as a participant in at least some of its provider networks to have successful health insurance products.

DOJ’s complaint against NYP closely resembles the lawsuit it and the Ohio Attorney General filed against an Ohio health system just last month. In its suit against OhioHealth, DOJ similarly alleges that the health system’s contracting practices with payors prevented payors from offering the tools discussed above. Both the suit against NYP and the suit against OhioHealth represent a revival of interest in challenging health systems’ allegedly restrictive contracting practices—last seen in 2016, when DOJ and the North Carolina Attorney General sued Carolinas HealthCare System (now Atrium Health). DOJ ultimately resolved its suit against Carolinas HealthCare System through a negotiated settlement requiring modifications to Carolinas’ contracting practices.

KEY TAKEAWAYS

• This is DOJ’s second action in 2026 challenging contractual restrictions that may inhibit the development of “budget-conscious plans,” such as narrow and tiered network plans. Healthcare provider networks and hospital systems—particularly those with substantial market shares—should consider whether provisions in their contracts with payors could expose them to potential antitrust risk.
• The complaints against NYP and OhioHealth allege relatively modest market shares (25–35%) and signal increased aggressiveness by DOJ to challenge potentially anticompetitive conduct even in the absence of traditionally high market shares alleged in prior litigation. Accordingly, healthcare systems should be aware that the contract restriction described above may be challenged—even when the healthcare system lacks a traditionally high market share.
• Alongside the Federal Trade Commission’s announcement this week that it is establishing a Healthcare Task Force, these cases signal that healthcare is a high priority for the federal antitrust agencies in this administration. [View source.]

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• DOJ Lawsuit Against OhioHealth Alleges Anticompetitive Contract Restrictions with Payors
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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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Morgan Lewis
2026

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