N.J. Hospitals File Antitrust Lawsuit Against RWJ Barnabas Health

On Tuesday, several northern New Jersey Hospitals filed a complaint in the District of New Jersey against RWJ Barnabas Health, Inc. alleging violations of the Sherman Antitrust Act and the New Jersey Antitrust Act. 

The plaintiffs include CarePoint Health Management Associates, LLC, Carepoint Health – Christ Hospital, CarePoint Health – Bayonne Medical Center and CarePoint Health – Hoboken University Medical Center which are affiliated through overlapping ownership of entities and trust associated with their founders. The complaint states that although the three hospitals are operated by CarePoint Health Management Associates, the hospitals are independent competitors providing medical care which benefits Hudson County, New Jersey. 

The plaintiffs allege that RWJ, along with its co-conspirators, has for years attempted to systematically destroy competition and to monopolize the provision of general acute care hospital services and related health care services in northern New Jersey. The complaint purports that RWJ’s goal was to force the plaintiffs into insolvency and acquire Hoboken University Medical Center and shutdown the remaining plaintiff hospitals. The plaintiffs argue that RWJ’s goal disregards the needs of the poor, underinsured and charity care patients which CarePoint serves in its role as the safety net hospital system in Jersey City.

Specifically, the complaint alleges that RWJ established preferred relationships with the state’s largest health insurer and political figures in the state and engaged in improper efforts to drive emergency room traffic to its competing hospitals without the legally required approval by the New Jersey Department of Health (NJDOH) at the expense of the plaintiffs and New Jersey patients. The plaintiffs allege that RWJ asserted undue influence on the NJDOH and state officials to prevent the plaintiffs from receiving government funds including the American Rescue Plan Act. 

Further, the complaint alleges that RWJ issued a phony letter of intent to acquire Christ Hospital and Hoboken University Medical Center with the real intent of gaining market knowledge and competitive intelligence to freeze programmatic growth and any significant hiring or construction at Christ Hospital. Additionally, the complaint alleges that RWJ began spreading rumors of closure and consolidation of Christ Hospital and Hoboken University Medical Center to cause a material adverse effect on Christ Hospital’s operations, leading to attrition of physicians, employees and patients.

The plaintiffs allege that RWJ’s and its co-conspirators’ anti-competitive and predatory business activities have created a stalemate in the progress of health care in Hudson County jeopardizing the health of the community. 

Accordingly, the plaintiffs filed the present suit alleging violations of Sections 1 and 2 of the Sherman Antitrust Act and the New Jersey Antitrust Act seeking declaratory and injunctive  relief, treble damages and attorneys fees. The plaintiffs are represented by Dilworth Paxson LLP