Memorial Hermann Healthcare System, Houston, entered an agreement with the Texas attorney general resolving antitrust allegations that the system pressured managed-care companies to refuse contracts with a physician-owned hospital that opened near its 319-bed Memorial City Hospital in 2005.
In the agreement, eight-hospital Memorial Hermann denies engaging in any conduct intended to restrain competition in violation of state antitrust laws. Under the terms of the settlement reached, Memorial Hermann agreed to a five-year injunction prohibiting certain contracting practicespractices Memorial Hermann has never employed, the system said in a news release.
The allegations involve Houston Town and Country Hospital, a physician-owned hospital that went out of business in 2007. According to a petition that Texas Attorney General Greg Abbot filed in Harris County District Court, Memorial Hermann threatened to drop its contract with Cigna Corp. after learning the insurer signed a contract with Town and Country and also told Aetna that doing business with Town and Country would lead to a rate hike for Memorial Hermanns services.
The settlement does not include any fine or penalty but requires Memorial Hermann to pay $700,000 to reimburse the attorney generals office for the two-year investigation.