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The legal action centers on a series of controversial "exclusionary" contract provisions that have become a focal point for antitrust regulators nationwide. Specifically, the DOJ highlights the use of "anti-steering" and "anti-tiering" clauses, as well as "all-or-nothing" requirements. In the complex world of healthcare economics, these terms serve as invisible barriers that prevent the free market from functioning. Under an anti-steering clause, a hospital system prohibits an insurer from creating incentives—such as lower co-pays or deductibles—to encourage patients to seek care at a competing hospital that might offer lower prices or higher quality. Anti-tiering clauses work similarly, forcing insurers to place all of a system’s hospitals in the most favorable "tier" of a health plan, regardless of whether individual facilities are cost-effective.
The "all-or-nothing" provision is perhaps the most coercive of the tactics cited in the lawsuit. This clause requires an insurance company that wants to include any of OhioHealth’s premier, must-have facilities—such as Riverside Methodist Hospital—in its network to also include every other facility in the OhioHealth system, regardless of price or location. This prevents insurers from "cherry-picking" the most efficient providers, effectively forcing them to accept a package deal that inflates the overall cost of the insurance product.
"Competition for healthcare is vital to all Americans," said Omeed Assefi, acting assistant attorney general of the Justice Department’s Antitrust Division. "This lawsuit challenges anticompetitive contract restrictions that prevent consumers from choosing lower-cost health plans and severely limit consumers’ access to price information. When dominant hospital systems use their power to dictate terms that eliminate choices, the entire community pays the price through higher premiums and reduced access to innovative care models."
OhioHealth, a $5 billion-plus enterprise, operates 15 hospitals and more than 200 ambulatory sites across 47 Ohio counties. As a nonprofit organization, it enjoys significant tax exemptions in exchange for providing community benefits. However, the DOJ’s complaint paints a picture of a system that functions more like a predatory commercial monopoly. By controlling a vast plurality of the inpatient beds in the Greater Columbus area and surrounding regions, OhioHealth has become a "must-have" system for any insurer wishing to sell health plans to local employers. The lawsuit argues that OhioHealth has used this "must-have" status as a cudgel during negotiations, threatening to pull its entire network from an insurer unless the insurer agrees to the restrictive clauses.
The economic implications of these practices are profound. According to research from the Kaiser Family Foundation and various health economists, hospital consolidation and the subsequent use of restrictive contracting are primary drivers of the "affordability crisis" in American healthcare. When a dominant system blocks steering, it removes the only tool insurers have to reward low-cost providers with more volume. Without the threat of losing patients to cheaper competitors, dominant systems have little incentive to lower their prices or improve efficiency.
Industry analysts point out that this lawsuit is part of a broader, more aggressive stance taken by federal regulators over the last several years. The Biden-Harris administration’s 2021 Executive Order on Promoting Competition in the American Economy specifically called out the healthcare industry as an area requiring increased scrutiny. The OhioHealth case follows in the footsteps of the landmark 2019 settlement involving Sutter Health in California. In that case, Sutter Health paid $575 million to settle allegations that it used similar anticompetitive tactics to drive up prices in Northern California. The Sutter settlement was a watershed moment, resulting in a court-ordered injunction that prohibited the system from using all-or-nothing and anti-steering clauses for a decade.
The Ohio Attorney General’s involvement adds a layer of state-level urgency to the proceedings. "Ohioans deserve a fair shake when they shop for health insurance," the Attorney General’s office stated in a supplemental brief. "When a hospital system uses its size to bully insurers into silence regarding costs, it isn’t just a business dispute; it is an assault on the financial well-being of every family in the state."
The lawsuit also delves into the concept of "price transparency." While federal rules now require hospitals to publish their negotiated rates, the DOJ argues that OhioHealth’s contracts effectively render this transparency moot. If an insurer is contractually forbidden from telling a patient that a neighboring hospital is 20% cheaper for the same MRI or knee replacement, the availability of that data on a website does little to change consumer behavior. The DOJ asserts that OhioHealth’s contracts create a "black box" environment where the true cost of care is shielded from the competitive pressures that govern almost every other sector of the economy.
From a defensive standpoint, large hospital systems like OhioHealth typically argue that these contract terms are necessary to ensure the stability of their integrated care networks. They often contend that "all-or-nothing" clauses allow them to subsidize less profitable rural hospitals or money-losing services like behavioral health and emergency departments with the margins earned at their flagship urban centers. They argue that "steering" disrupts the continuity of care, potentially moving a patient away from a system where all their electronic health records and specialists are integrated.
However, health policy experts are increasingly skeptical of these justifications. "The ‘continuity of care’ argument is often a shield for ‘market share protection,’" says Dr. Elena Rodriguez, a health economist not involved in the case. "If a system is truly providing superior, integrated care, they shouldn’t need to legally prohibit insurers from suggesting alternatives. Patients would stay because the value is there. When you have to mandate loyalty through a contract, it’s usually because your prices wouldn’t survive a side-by-side comparison."
The data surrounding hospital prices in Ohio supports the government’s concern. A 2024 study by the RAND Corporation found that Ohio has some of the highest hospital price disparities in the country, with private insurers paying significantly more than Medicare for the same services at large systems. In Columbus, the concentration of market power among a few large players—primarily OhioHealth and the Ohio State University Wexner Medical Center—has led to a situation where employer-sponsored insurance premiums have outpaced inflation for over a decade.
As the legal battle unfolds, the outcome could have national ramifications. A victory for the DOJ would send a clear signal to other massive nonprofit systems—such as UPMC in Pennsylvania, Advocate Health in the Midwest, and HCA Healthcare—that the era of restrictive contracting is under existential threat. It could lead to a fundamental shift in how health insurance is designed, allowing for the rise of "narrow network" plans that offer significantly lower premiums in exchange for using a curated list of high-value providers.
The lawsuit seeks a permanent injunction against OhioHealth, which would legally bar the system from including anti-steering, anti-tiering, and all-or-nothing clauses in any future contracts with insurers. It also seeks to void such clauses in existing agreements. If successful, the DOJ believes this will pave the way for insurers to introduce "tiered" products in Ohio, where consumers who choose lower-cost facilities see the savings reflected directly in their own wallets through lower co-pays.
For the business community in Ohio, the lawsuit is a welcome development. Small and medium-sized businesses have long complained that they are price-takers in a market where they have no leverage against giant hospital systems. "Every dollar that goes into an unjustified healthcare premium is a dollar that doesn’t go into employee wages or business expansion," said a spokesperson for a Columbus-based chamber of commerce. "We need a competitive landscape where hospitals compete on price and quality, just like we do."
As the case moves toward discovery, the healthcare industry will be watching closely for internal documents and communications that might reveal the intent behind these contract terms. In previous antitrust cases, internal emails showing executives’ desire to "crush" competition or "lock in" insurers have proven devastating. For OhioHealth, the stakes are not just financial but reputational. As a nonprofit "community" asset, defending practices that are alleged to have systematically increased the cost of living for that very community presents a difficult public relations challenge.
Ultimately, this lawsuit represents a pivotal moment in the fight for healthcare affordability. It moves the conversation beyond simple price transparency and into the structural mechanics of how healthcare is bought and sold. By targeting the "secret" clauses in hospital contracts, the DOJ and the Ohio Attorney General are attempting to dismantle the hidden architecture of high healthcare costs, aiming to restore a measure of balance to a market that many believe has been tilted in favor of large providers for far too long. The proceedings in Columbus may very well dictate the future of hospital-insurer relations across the United States for the next generation.