NewYork-Presbyterian is reportedly facing a federal Department of Justice (DOJ) investigation to determine whether private contracts it makes with insurers include anticompetitive restrictions.
The probe was reported Monday morning by The New York Times, which said it reviewed a subpoena addressed to labor union Local 32BJ of the Service Employees International Union. The group had requested the DOJ launch such an investigation last year amid a public campaign against the health system.
Specifically, the subpoena references “potential unlawful agreement between NewYork Presbyterian Health Care System and health insurance companies relating to steering restrictions and contracting conduct,” according to the NYT. Such agreements would require insurers to include NewYork-Presbyterian in the provider networks offered to employers, reducing the health system’s need to maintain competitive prices for services that could be obtained elsewhere.
Fierce Healthcare has reached out to NewYork-Presbyterian, the DOJ and Local 32BJ for comment and will update this story with any response.
News reports as far back as 2018 have put a spotlight on NewYork-Presbyterian’s use of private contracts with payers, which employer groups, payers and other critics have said can make it difficult to avoid including higher-cost hospitals and systems. Several health systems have been alleged to use their market dominance to drive similar arrangements over the years, leading to some high-profile legal cases and multimillion-dollar settlements.
Local 32BJ’s case against NewYork-Presbyterian picked up steam last year when an attempt to change over to a new third-party administrator that excluded the health system from its provider network triggered a demand for $25 million over past medical services, according to a report from The Wall Street Journal.
The union has said that such a bill as outlined in payer contracts is not legitimate and “was intended as a penalty for excluding NewYork-Presbterian from the union’s network of providers,” according to an NYT summary of the memo Local 32BJ sent the DOJ last year requesting its civil investigation. That 2024 memo also referenced negotiations with insurers in which the union was told it was prohibited from placing NewYork-Presbyterian “in a non-preferred tier with higher copays,” a tactic the union could use to push members toward cheaper providers.
Local 32BJ has since gone on to bankroll a public relations campaign against the health system in which it contrasts higher-than-average service rates with the nonprofit’s tax breaks.