Case Description
The United States and Michigan filed suit in federal court against four Michigan hospital systems, alleging that for years they unlawfully agreed to allocate territories for marketing. The complaint alleged Hillsdale, Allegiance, Branch and ProMedica’s Bixby and Herrick Hospitals, the only hospitals in their respective counties, each competed through marketing to attract patients, including advertising, direct mailings to patients, outreach to physicians and employers, conducting health fairs and offering free health screenings. The complaint alleges that Hillsdale curtailed this competition for years by entering into agreements with Allegiance, Branch and ProMedica to limit the marketing of competing healthcare services. Three of the systems, Hillsdale Community Health Center, Community Health Center of Branch County, Michigan, and ProMedica Health System Inc., agreed to settle the charges in 2015. The settlement prohibits Hillsdale, Branch and ProMedica from agreeing with other healthcare providers, including hospitals and physicians, to limit marketing or to divide any geographic market or territory, prohibits communications among the defendants about their marketing activities and requires the hospitals to implement compliance measures tailored to prevent the recurrence of these types of anticompetitive practices in the future. The parties paid $5,000 each to Michigan for costs and attorneys’ fees. W.A. Foote Memorial Hospital, doing business as Allegiance Health, settled in 2018. The Allegiance settlement expands on the terms of the previous settlements, specifically, the proposed settlement prevents Allegiance from engaging in improper communications with competing providers regarding their respective marketing activities and entering into any improper agreement to allocate customers or to limit marketing. It explicitly prevents Allegiance from continuing to carve out Hillsdale County from its marketing and business development activities. Allegiance must report any violations and must annually certify compliance with the terms of the final judgment. Allegiance must also submit to compliance inspections at the Department’s request. Allegiance must also pay $40,000 to the state and the US to reimburse costs.
