2.

Article 1, Section 34 of the North Carolina Constitution states: “Perpetuities and

monopolies are contrary to the genius of a free state and shall not be allowed.” However, from

1995 until 2019, Mission operated its hospital system as a monopoly. In January 2019, HCA

acquired Mission and to this day continues to operate it as a for-profit monopoly.

3. The original monopoly was created in 1995, when Mission merged with its only

significant competitor in the region, St. Joseph’s Hospital. As a result of that merger, Mission’s

flagship Asheville hospital (“Mission Hospital-Asheville”) effectively became the only provider

of inpatient general acute care (“GAC”) hospital services in Buncombe and Madison Counties.

From 1995 until 2016, Mission was immunized from antitrust liability by a state statute under

which it was issued a Certificate of Public Advantage (“COPA”). COPAs are a form of regulation

in which a hospital is permitted to operate as a monopoly in exchange for subjecting itself to state

oversight.

4. In 2016, after years of lobbying by Mission executives, the State repealed the

COPA, leaving in place an unregulated monopoly. Once that repeal occurred, both Mission and

any later purchasers of its assets, including HCA, lost any immunity from suit under the antitrust

laws.

5. After the COPA was repealed, and prior to when HCA purchased the assets,

Mission engaged in improper restraints on competition by enforcing unlawful terms and

arrangements with private payers, including commercial health plans, and third-party

administrators (“TPAs”) of self-insured plans. These improper restraints included tying, all-or-

nothing arrangements, gag clauses, and, on information and belief, other anticompetitive terms

and negotiating devices. Each of Mission’s anticompetitive acts, together and individually,

2
increased the prices of hospital services, insurance premiums, copays or deductibles paid by

residents of Mission’s overall 18-County Western North Carolina service area.

6. In 2019, Mission sold its assets to HCA, the world’s largest for-profit hospital

chain, and a company that has been subject to approximately 20 prior Federal Trade Commission

(“FTC”) antitrust proceedings. When HCA purchased Mission’s assets effective January 2019,

HCA did so precisely because of Mission’s outsized ability to dictate prices and other contract

terms to its customers.

7. Like Mission before it, HCA has used improper restraints in its agreements and

arrangements with commercial health plans and TPAs, including tying, all-or-nothing

arrangements, gag clauses, and on information and belief, other anticompetitive terms and

negotiating devices. HCA has also refused to fully comply with a rule enacted by President

Trump’s Administration to increase transparency in healthcare pricing. Were HCA to comply and

reveal to consumers and regulators the true prices that it charges, the public would know that

HCA/Mission’s prices for key services are by far the highest in North Carolina. For instance,

according to a large commercial dataset, HCA currently charges more than two times the State

average for a C-Section without complications. This price disparity—one matched and exceeded

by numerous other procedures—can only exist because of the system’s unbridled monopoly power

and its status as a “must have” system in Western North Carolina. As a result, individual insurance

premiums, which are primarily driven by healthcare costs, are significantly higher in Mission’s

service area than in surrounding counties and even North Carolina’s largest cities.

8. At the same time, to maximize profits, HCA has been cutting costs and staff at an

alarming rate, leaving Western North Carolinians with increasingly bad healthcare at an ever-

growing price. It has also taken steps to drive business to its more expensive flagship facility in

3
Asheville, reducing access and increasing travel times for citizens in affected areas. As stated in

a July 9, 2021, Executive Order by President Biden: “Hospital consolidation has left many areas,

particularly rural communities, with inadequate or more expensive healthcare options.”

HCA/Mission perfectly encapsulates this troubling trend and the harms consolidation inflicts on

the population a hospital purports to serve.

9. Within the applicable damages period commencing on August 10, 2017,

Defendants’ improper conduct has harmed consumers through higher health insurance premiums,

copays, deductibles, and coinsurance payments. Consumers have also lost access to preferred

physicians and healthcare providers and experienced worsening facility conditions and service.

10. Reduced quality and higher prices are the hallmark effects of an unregulated

monopoly. Today, HCA holds an approximate 90% market share in the market for inpatient

GAC hospital care in Buncombe County, the most populous county in Western North Carolina,

and in nearby Madison County. Because insurers and consumers in the region have no choice but

to use HCA, HCA has free rein to dictate the prices it charges insurers and consumers while at the

same time undermining quality to cut costs.

11. In fact, in the Outlying Regions Inpatient Services-Only Market (defined below),

HCA has monopoly (70%-plus)1 market power across seven Counties: Yancey – 90.9% market

share; Madison -- 90%; Buncombe -- 86.6%; Mitchell – 85.4%; Transylvania -- 78.7%; McDowell

-- 76.4%; and Macon -- 74.7%.

12. HCA cannot deny the negative effects that unregulated hospital monopolies inflict

on our Nation’s healthcare system. Indeed, in 2018—while it was negotiating its takeover of

1
“Generally speaking, a 70% to 75% market share is necessary to sustain a monopolization claim.” Sitelink Software,
LLC v. Red Nova Labs, Inc., No. 14 CVS 9922, 2016 NCBC 43, 2016 NCBC LEXIS 45, *29 (N.C. Super. Ct., Wake
County June 14, 2016).

4
Mission—HCA complained to an agency in Florida about a competitor’s “monopolistic

dominance,” stating that “patients suffer from lack of access to care in their community,” they

“have little to no healthcare provider choice,” and “[t]his type of monopolistic environment within

the healthcare market stifles innovation and breeds a culture that negatively impacts the cost and

quality of care.”

13. HCA’s behavior since taking over Mission, and Mission’s prior abuse of its

monopoly power, exemplify why healthcare in the United States costs so much more than

elsewhere.

14. Without this Court’s intervention, the future of healthcare in Western North

Carolina—traditionally a destination for many, including retirees, in part because of its reputation

for high-quality, low-cost healthcare—is at risk. Accordingly, Plaintiffs, who each have

commercial or self-funded health coverage and have been and continue to be injured by

Defendants’ practices, sue for class-wide damages and for equitable relief seeking to enjoin the

continuation of Defendants’ unlawful abuse of their monopoly power.

II. PARTIES

A. Plaintiffs

15. Plaintiff William Alan Davis is a citizen of North Carolina who resides in Clyde,

Haywood County. Mr. Davis is a participant in a private group healthcare plan and has had to pay

higher amounts due to Defendants’ conduct.

16. Plaintiff Richard Nash is a citizen of North Carolina who resides in Candler,

Buncombe County. Mr. Nash is a participant in a private group healthcare plan and has had to pay

higher amounts due to Defendants’ conduct.

5
 17. Plaintiff Will Overfelt, Ed.S BCBA is a citizen of North Carolina who resides in

Asheville, Buncombe County. Mr. Overfelt holds an individual Affordable Care Act policy

through Blue Cross and has had to pay higher amounts due to Defendants’ conduct.

18. Plaintiff Jonathan Powell is a citizen of North Carolina who resides in Morganton,

Burke County. Mr. Powell holds group health insurance with Blue Cross through his place of

employment and has had to pay higher amounts due to Defendants’ conduct.

19. Plaintiff Faith C. Cook, Psy.D. is a citizen of North Carolina who resides in

Asheville, Buncombe County. Dr. Cook holds group health insurance with Blue Cross through an

Affordable Care Act plan and has had to pay higher amounts due to Defendants’ conduct.

20. Plaintiff Katherine Button is a citizen of North Carolina who resides in Asheville,

Buncombe County. Ms. Button is a member of a self-funded health insurance plan, and has had

to pay higher amounts due to Defendants’ conduct.

B. Defendants

21. Defendant HCA Healthcare, Inc. is a Delaware corporation with a principal place

of business in Nashville, Tennessee. It may be served with process through its principal office

address of One Park Plaza, Nashville TN 37203, or through its registered agent, The Corporation

Trust Company, at Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801.

22. HCA Healthcare, Inc. is the ultimate parent company of the HCA enterprise and

was directly and materially involved through its officers and directors in making the pertinent

decisions and undertaking the pertinent actions herein. It is publicly held and listed with the

Securities and Exchange Commission (“SEC”). HCA Healthcare, Inc. or its predecessors in

interest have been named as respondents in prior antitrust proceedings brought by the FTC and/or

6
the U.S. Department of Justice (“DOJ”), including with regard to hospital acquisitions and

divestments of improper mergers.

23. HCA is the world’s largest for-profit hospital chain. It owns and operates over 180

hospitals in 21 states. HCA’s revenues were over $51 billion for 2020.2 Its net income was over

$3.7 billion in 2020.

24. Defendant HCA Management Services, LP is a Delaware limited partnership with

its principal place of business in Nashville, Tennessee. It may be served with process through its

principal office address of One Park Plaza, Nashville TN 37203, or through its North Carolina

registered agent, CT Corporation System, 160 Mine Lake Court Suite 200, Raleigh, NC 27601.

25. HCA Management Services, LP was formed in 1999. It applied for a certificate of

authority to do business in North Carolina on December 28, 2005. It is currently registered to do

business in North Carolina. It is listed on the HCA Healthcare website3 as being the entity

responsible for that website.

26. HCA Management Services, LP entered into a confidentiality and nondisclosure

agreement with Defendant ANC Healthcare, Inc. f/k/a Mission Health System, Inc. in or about

July 11, 2017. At that time, MH Master Holdings, LLLP which was only first organized on August

23, 2018 did not yet exist. Pursuant to negotiations conducted under that nondisclosure agreement,

various Mission and HCA entities entered into an Asset Purchase Agreement (“APA”) dated

August 2018, and an amended Asset Purchase Agreement (“Amended APA”) dated January 2019,

facilitating the asset sale of relevant Mission system assets to HCA.

2
By comparison, according to the National Association of State Budget Officers , North Carolina’s total
expenditures in fiscal year (FY) 2020 were $60.2 billion, including general funds, other state funds, bonds, and
federal funds. HCA Healthcare is at number 62 on the Fortune 500.
3
https://hcahealthcare.com.

7
 27. Defendant HCA, Inc. is a Delaware corporation with its principal place of business

in Nashville, Tennessee. It may be served with process through its principal office address of One

Park Plaza, Nashville TN 37203.

28. HCA, Inc. is the plan sponsor of a defined contribution plan established January 1,

1983, which provides retirement benefits for all eligible employees of HCA, Inc. or its affiliates.

It is the sponsor of the HCA 401(k) Plan, with employer identification number 75-2497104, and a

total number of participants of 387,421 as of 2019. On information and belief, HCA, Inc. is the

plan sponsor of a retirement benefit plan for numerous employees associated with the North

Carolina Division of HCA Healthcare, Inc. It has been a party to prior proceedings challenging

various aspects of HCA’s business practices. E.g., US DOJ press release dated June 26, 2003.

29. Defendant MH Master Holdings, LLLP is a Delaware limited liability limited

partnership. HCA has stated in press releases that “Mission Health, an operating division of HCA

Healthcare, is based in Asheville, North Carolina, and is the state’s sixth largest health system.”

On information and belief, the “Mission Health” entity to which HCA refers as being “based in

Asheville” is MH Master Holdings, LLLP. Accordingly, MH Master Holdings, LLLP has a

principal place of business in Asheville, North Carolina. It may be served with process at its

registered office address, c/o CT Corporation System, 160 Mine Lake Ct Ste 200, Raleigh, NC

27615, or, at its principal office at 509 Biltmore Avenue, Asheville, NC 28801, or, c/o HCA

Healthcare, Inc., One Park Plaza, Nashville, TN 37203.

30. MH Master Holdings, LLLP is listed as the buyer in the asset sale documented by

the APA and Amended APA. It purchased the Mission system assets via the Amended APA and

is the current owner of the former Mission system assets.

8
 31. MH Master Holdings, LLLP applied for a certificate of authority to do business in

North Carolina on August 23, 2018. It filed its most recent annual report with the North Carolina

Secretary of State, Department of Corporations (“NC SOS”), on or about April 6, 2021, describing

itself as being engaged in the “healthcare related business.”

32. MH Master Holdings, LLLP’s general partner is MH Hospital Manager LLC. MH

Master Holdings, LLLP is a 99% limited partner in MH Mission Hospital, LLLP. Under the

Amended APA, MH Master Holdings, LLLP is authorized to do business under brand names

including “Mission Health,” “Mission Health System” and the “HCA” brand.

33. The “corporate bio” used at the end of many HCA NC press releases, opens, under

the header “ABOUT MISSION HEALTH,” by stating that “Mission Health [is] an operating

division of HCA Healthcare [and] is based in Asheville, North Carolina….”

34. On information and belief, MH Master Holdings, LLLP identifies itself as and

holds itself out as being a part of the North Carolina Division of HCA Healthcare, Inc. See, e.g.,

job postings on websites like “Health Careers,” listing open positions at “HCA Healthcare -- North

Carolina Division.”

35. HCA states in public website content that its “North Carolina Division,” also known

as, “Mission Health,” is “based in Asheville, North Carolina.”

36. Per HCA press releases, since February 2019, Greg Lowe has been “president of

the newly created Asheville-based North Carolina Division, which comprises the recently

purchased Mission Health system of six hospitals in western North Carolina.” Upon information

and belief, Mr. Lowe resides in North Carolina.

37. Defendant, MH Hospital Manager, LLC, is a Delaware limited liability company

with a principal place of business in Tennessee or North Carolina. It may be served with process

9
through its registered agent, c/o CT Corporation System, 160 Mine Lake Court Suite 200, Raleigh

NC 27615, or, at its office at 509 Biltmore Avenue, Asheville, NC 28801, or c/o HCA Healthcare,

One Park Plaza, Nashville, TN 37203.

38. MH Hospital Manager, LLC applied for a certificate of authority to do business in

North Carolina on August 22, 2018. Its annual report dated April 6, 2021, describes the nature of

its business as “healthcare related business.”

39. MH Hospital Manager uses the assumed business name, “North Carolina Division,”

pursuant to an assumed name certificate dated April 22, 2019, filed with the Buncombe County

Register of Deeds. It described the counties where the assumed business name will be used to

engage in business as “All 100 North Carolina counties.”

40. Defendant, MH Mission Hospital, LLLP is a Delaware limited liability limited

partnership. According to Defendants, it is “located in Asheville, North Carolina” and has a

principal place of business in North Carolina. It may be served with process at its registered office

address, c/o CT Corporation System, 160 Mine Lake Ct Ste 200, Raleigh, NC 27615, or, at its

principal office at 509 Biltmore Avenue, Asheville NC 28801, or c/o HCA Healthcare, One Park

Plaza, Nashville, TN 37203.

41. Effective July 2019, Chad Patrick became the Chief Executive Officer of what

HCA describes as “HCA Healthcare’s North Carolina Division’s flagship 763-bed Mission

Hospital” and resided in Asheville since Summer 2019. On information and belief, the HCA

corporate entity employing Mr. Patrick is MH Mission Hospital, LLLP.

42. Defendant ANC Healthcare, Inc. f/k/a Mission Health System, Inc. is a North

Carolina nonprofit corporation which had its principal place of business in Asheville, North

Carolina through 2019. It remains an active corporation incorporated under North Carolina law.

10
In or about February 2019, its principal office was moved to Florida. It may be served with process

through its registered agent, c/o Corporation Service Company, 2626 Glenwood Avenue Suite 550,

Raleigh NC 27608, or at its current office address of 425 West New England Avenue Suite 300,

Winter Park, FL 32789.

43. ANC Healthcare, Inc. f/k/a Mission Health System, Inc. was incorporated in 1981

as a North Carolina nonprofit corporation. As of the date of the filing of this lawsuit, it remains a

nonprofit corporation incorporated under North Carolina law. See Articles of Restatement for

Nonprofit Corporation filed February 1, 2019. The corporation is not defunct nor has it been

dissolved and in its most recent Articles of Restatement it describes its duration as “unlimited.”

44. As of 2015, it described itself as an “integrated healthcare system” which provided

“medical care, hospital care” and “the delivery of health care services to persons resident in

Western North Carolina and surrounding areas.”

45. During the time period commencing in or about 2010 and continuing through and

including January 2019, Ronald Paulus (“Paulus”) was the President and Chief Executive Officer

of ANC Healthcare, Inc. f/k/a Mission Health System, Inc.

46. Defendant Mission Hospital, Inc. is a North Carolina nonprofit corporation which

had its principal place of business in Asheville, North Carolina through 2019. It remains an active

corporation incorporated under North Carolina law. In or about February 2019, its principal office

was moved to Florida. It may be served with process through its registered agent, c/o Corporation

Service Company, 2626 Glenwood Avenue Suite 550, Raleigh NC 27608, or at its current office

address of 425 West New England Avenue Suite 300, Winter Park, FL 32789.

47. Defendant Mission Hospital, Inc. was incorporated in 1951 as a North Carolina

nonprofit corporation. As of the date of the filing of this lawsuit, it remains a nonprofit corporation

11
incorporated under North Carolina law. See Articles of Restatement for Nonprofit Corporation

filed February 1, 2019. The corporation is not defunct nor has it been dissolved and in its most

recent Articles of Restatement it describes its duration as “unlimited.”

48. Defendants ANC Healthcare, Inc. f/k/a Mission Health System, Inc. and Mission

Hospital, Inc. are each identified as sellers under the Amended APA. See Amended APA, p. 1.

Under the Amended APA’s terms, ANC Healthcare, Inc. f/k/a Mission Health System, Inc. and

Mission Hospital, Inc. remain liable for pre-asset sale ownership or operations of the hospital

business. See Amended APA, § 2.4 (in which the HCA entities who function as the buyers under

the Amended APA purported to exclude from their liability “any Liabilities related to the

ownership or operation of the Business or the Purchased Assets prior to the Effective Time”).

49. Under the Amended APA, the sellers represented and warranted that they “have

operated, and are operating, the Business… and their properties in compliance in all material

respects with all applicable Laws,” up through the sale date. Amended APA, § 4.11(a)(i). In fact,

they did not comply with the laws, as alleged herein.

III. JURISDICTION AND VENUE

50. The Court has subject matter jurisdiction over Plaintiffs’ claims under N.C. Const.

Art. 1, § 34 and N.C.G.S. § 75-1 et seq.

51. The Court has personal jurisdiction over Defendants because they are domiciled in

the State or they have transacted business in the State relevant to this antitrust action.

52. Venue is proper in this Court because a substantial part of the events giving rise to

Plaintiffs’ claims occurred in Buncombe County.

12
 53. The case falls under the local controversy exception to federal jurisdiction under

the Class Action Fairness Act. 28 U.S.C. § 1332(d)(4)(A)4 and (B).5

54. The case is properly designated a mandatory complex business case. Under

N.C.G.S. § 7A-45.4(a)(3), the case involves disputes under antitrust law, including disputes arising

under Chapter 75 of the General Statutes that do not arise solely under G.S. 75-1.1 or Article 2 of

Chapter 75 of the General Statutes. Under N.C.G.S. § 7A-45.4(b)(2), the amount in controversy

computed in accordance with G.S. 7A-243 is at least five million dollars ($5,000,000) when the

claims of the putative class are taken into account.

55. Under the Amended APA, a choice of forum provision specifies the Business

Court. Amended APA § 13.2, entitled, Choice of Law and Forum. While Plaintiffs are nonparties

to the Amended APA, the Business Court remains the appropriate venue for the instant matter.

56. All Defendants during the pertinent times have participated in significant interstate

commerce and the relevant hospital operations have affected interstate commerce.

4
“A [federal] district court shall decline to exercise jurisdiction … (A) (i) over a class action in which— (I) greater
than two-thirds of the members of all proposed plaintiff classes in the aggregate are citizens of the State in which the
action was originally filed; (II) at least 1 defendant is a defendant— (aa) from whom significant relief is sought by
members of the plaintiff class; (bb) whose alleged conduct forms a significant basis for the claims asserted by the
proposed plaintiff class; and (cc) who is a citizen of the State in which the action was originally filed; and (III)
principal injuries resulting from the alleged conduct or any related conduct of each defendant were incurred in the
State in which the action was originally filed; and (ii) during the 3-year period preceding the filing of that class
action, no other class action has been filed asserting the same or similar factual allegations against any of the
defendants on behalf of the same or other persons….” 28 U.S.C. § 1332(d)(4)(A).
5
A “district court shall decline to exercise jurisdiction” [where] “two-thirds or more of the members of all proposed
plaintiff classes in the aggregate, and the primary defendants, are citizens of the State in which the action was
originally filed.” 28 U.S.C. § 1332(d)(4)(B).

13
IV. RELEVANT HISTORICAL BACKGROUND

A. Mission acquires monopoly power under the COPA

57. Mission Hospital was originally formed over a century ago as a local Asheville

charitable institution. When founded in the 1880s, the Dogwood Mission, also known as the

Flower Mission, provided charity care to Asheville’s sick and poor.

58. After World War II, Mission Hospital joined with other Buncombe County

hospitals to become a major medical center in western North Carolina. In 1951, Mission Hospital

was incorporated as a nonprofit. Although it was a nonprofit, it was not under the patronage or

the control of the State nor was it a local health authority.

59. As of the early 1990s, the two private acute care hospitals in Asheville were

Mission Hospital-Asheville and St. Joseph’s Hospital. Mission had 381 beds. St. Joseph’s

Hospital had 285 beds. The two hospitals sought to partner and lobbied the General Assembly to

enact an initial version of the COPA law to facilitate a partnership in 1993.6

60. The hospitals claimed that their plans did not call for a merger and that each hospital

would maintain its corporate identity, governance structure and assets. Nonetheless, in 1994 the

FTC opened an antitrust investigation out of a concern that the combination of St. Joseph’s and

Mission would result in a single large hospital dominating upwards of 80% or 90% of the market,

an undeniable monopoly under the concentration metric the FTC uses.

61. In response, the hospitals lobbied the North Carolina General Assembly to amend

the COPA7 to further immunize them from antitrust scrutiny. The General Assembly did so in

December 1995. Mission and St. Joseph’s then entered into their partnership.

6
Hospital Cooperation Act of 1993, Session Law 1993-529.
7
See N.C.G.S. §§ 131E-192.1 through 131E-192.13 (repealed).

14
 62. Subsequently, in 1998, Mission determined that it desired to buy St. Joseph’s,

acquire all of its assets, and combine operations under one license as Mission Health System. The

COPA was amended in October 1998 to facilitate the merger which then occurred.

63. The COPA statute contemplated that Mission would “limit health care costs” and

“control prices of health care services.”8 Effectively, the government and Mission had a deal: If

Mission accepted regulation to prevent it from charging monopoly prices or otherwise abusing its

monopoly market power, North Carolina would exempt Mission from the antitrust laws.

64. The COPA law acknowledged that the same conduct that may be lawful under the

COPA may be unlawful without it, noting that “federal and State antitrust laws may prohibit or

discourage” the “cooperative arrangements” that the COPA allowed.9

65. When the COPA was amended in 1998 to allow the Mission-St. Joseph’s merger,

the State accepted the hospitals’ representations that the merger “will not likely have an adverse

effect on costs or prices of health care.”10

66. The 1998 amended COPA documented the dominant market share of the merged

Mission institution: “The two Hospitals dominate the market share in two counties. 91% of

Madison County admissions and 87% of Buncombe County admissions are either Memorial

Mission or St. Joseph’s Hospital. Memorial Mission and St. Joseph’s are located in Buncombe

County. Madison County, which has no hospital, is closer to the two Asheville hospitals than to

any other acute care hospital.”11

8
See former N.C.G.S. §§ 90-21.24, 90-21.28 (enacted by Physician Cooperation Act of 1995, SL 1995-395 (1995));
recodified at N.C.G.S. §§ 131E-192.1 through 131E-192.13 (repealed by Session Laws 2015-288, s. 4, as amended
by Session Laws 2016-94, s. 12G.4(a), effective Sept. 30, 2016).
9
See former N.C.G.S. §§ 90-21.24(5).
10
1998 COPA, p. 13. See also id. at p. 14 (reciting that merger will “not likely have an adverse impact on … price of
health care services”).
11
Id., pp. 7-8.

15
 67. A second amended COPA dated June 2005 stated: “Mission Health dominates the

market share in two counties. 93.8% of Madison County admissions and 90.6% of Buncombe

County admissions are at Mission Hospitals’ facilities, which are located in Buncombe County.

Madison County, which has no hospital, is closer to Mission Hospitals in Asheville than to any

other acute care hospital.”

68. In 2011, a hospital protesting Mission’s anticompetitive practices publicized

comments by Mission’s Communications Director at a conference in which the Director said,

“There was a lot of talk about the fact that we are a monopoly, and we are.... We’re kinda the 500-

pound gorilla in Western North Carolina.” The Director was subsequently terminated.

69. As of 2016, Mission continued to have a 93% market share in its primary service

area—Buncombe and Madison Counties—for inpatient GAC hospital services. Under modern

antitrust law, generally a market share of over 60% constitutes a monopoly. And HCA itself has

described a competitor’s 85% inpatient market share as a monopoly in another state.

B. Mission engages in anticompetitive conduct under the COPA

70. While the COPA was in effect, it had provisions that sought to limit the ability of

Mission to charge supracompetitive monopoly prices for healthcare or otherwise engage in

anticompetitive behavior.

71. However, Mission evaded the COPA’s substantive restrictions, to the detriment of

competition and consumer welfare. Between 1995 and 2016, Mission engaged in anticompetitive

conduct by using its monopoly income from Mission Hospital-Asheville to pressure smaller

hospitals in the counties surrounding Buncombe and Madison Counties to allow Mission to

manage or acquire their businesses. Each time Mission managed to acquire one of the smaller

hospitals in the counties surrounding its Buncombe and Madison County primary service area, this

16
eliminated a potential competitor and expanded the scope of Mission’s dominance. Between 1995

and 2016-17, Mission successfully acquired five of the hospitals in those counties.

72. During the same period, Mission acquired and associated with many physician

groups and eliminated many of them.

73. From time to time, Mission executives admitted that the purpose of these

acquisitions was to reduce competition in those regions. For example, in 2004, when Mission

acquired McDowell Hospital, CEO Bob Burgin was quoted as saying that the acquisition would

“prevent another provider from entering a local market.”

74. In 2004, a group of four large employers in Western North Carolina issued a report

on rising medical prices, which noted that Mission refused to cooperate and threatened to sue. The

employers expressed their concern that the COPA was “allowing Mission to negotiate

reimbursement rates that are higher than in other major counties....” Mission denied that any of

this was occurring.

75. In 2011-12, with the COPA coming up for renewal, physicians and other hospitals

publicly protested Mission’s business practices. One physician described “Mission’s abuse of the

COPA,” which was “a law that was enacted at their request to protect the citizens of [Western

North Carolina] from monopolies and high medical prices.” He described that by using its

Asheville monopoly to charge “higher payments from insurers,” Mission was able to “build an

unprecedented empire,” buying so many practices and other hospitals that competitors, including

“those of us in private practice will not be able to survive.” This physician described that when he

met with Mission executives to try to protect his practice, Mission’s response was that they would

“crush us.”

17
 76. During this period, Mission was publicly claiming that its costs and prices were

low. In fact, its prices were high, but they were concealed from regulators and the public due to

Mission’s use of gag clauses with commercial health plans.

77. A 2011 report by economist Greg Vistnes (“Vistnes Report”) commissioned to

study the efficacy of the COPA confirmed that a potential for regulatory evasion existed and that

“[t]he incentive problems associated with the COPA regulation appear to be consistent with MHS’

[Mission Hospital System] observed conduct and complaints about MHS’ conduct that have been

voiced by certain parties.” The report found in part that the COPA created an incentive for Mission

to acquire facilities outside of Asheville, because while the COPA limited Mission’s ability to raise

costs and margins, the cost increase cap was tied only to Mission Hospital-Asheville—meaning

that if Mission increased costs by acquiring outlying facilities it could raise prices without

technically violating the COPA’s margin cap. Evidence presented at an FTC workshop in 2019

indicated that this was in fact what Mission appeared to have done.

C. The COPA is repealed in 2016

78. In 2010, Paulus became the new President and CEO of Mission. Paulus almost

immediately began an effort to reduce or lift the COPA restrictions while retaining its immunity

protection.

79. Paulus claimed that the Mission system could not survive unless the COPA

restraints were repealed. These representations were false.

80. In a 2012 video, Paulus criticized the anticompetitive effect of “much larger out-

of-area health systems that have entered our region.” Paulus claimed that the COPA prevented

Mission from competing with these predatory for-profit out-of-state multi-market systems.

18
 81. After years of pressure by Paulus and other Mission executives, the Legislature

obliged and passed a bill that repealed the COPA, terminating state oversight effective September

30, 2016.

82. While Mission prices had risen under the COPA, after its repeal they grew even

more substantially, as described below.

83. On information and belief, within a year of the COPA’s repeal, Mission executives

had begun meeting with HCA about selling the system to HCA, an out-of-state system. Upon

information and belief, Paulus anticipated the sale to a for-profit chain at the time he lobbied to

repeal the statute. However, he did not inform Legislators about that fact.

D. Mission assets are sold to HCA

84. By 2017, Mission’s executives had entered secret negotiations to sell assets from

the Mission system to HCA, a multi-state health system that has been subject to at least 20 antitrust

proceedings brought by the FTC. The negotiation process was conducted without any public

notice or input, despite both companies’ purported commitment to transparency and Mission’s

status as a charitable nonprofit with a fiduciary duty to the citizens of Western North Carolina.

Non-executive doctors and staff were excluded from the negotiation process and the decision to

sell to HCA.

85. Upon information and belief, there were inadequate efforts made to solicit other

bidders and any other bids submitted were not taken seriously, resulting in an undervaluation of

Mission.

86. Mission and HCA announced the deal on March 21, 2018. It was followed by

execution of the 2018 APA on August 30, 2018, and the Amended APA in January 2019. The

19
purchase price was approximately $1.5 billion. Mission’s annual income was estimated to be in

the same range, at approximately $1.75 billion, reflecting the undervalued nature of the deal.

87. From approximately 2017 through January 2019, HCA and Mission negotiated the

terms of the asset purchase which would form the new North Carolina Division of HCA

Healthcare. On information and belief, HCA was interested in the transaction primarily because

of the built-in monopoly power Mission had as a result of the COPA.

88. The HCA takeover was hugely beneficial to Mission’s executives. In his last four

months as CEO of Mission—which, at that point, was still technically a nonprofit—Paulus was

paid $4 million in compensation from Mission’s 501(c)(3) arm (i.e., its charity). He also secured

a contract for himself as a consultant with HCA, under terms that have been kept secret and has,

on information and belief, secured other lucrative business related to HCA that is ongoing.

E. HCA engages in post-acquisition conduct that adversely affects physicians,

staff, consumers, and the community

89. Defendants’ monopolistic practices have caused reduced quality of service in

HCA/Mission hospitals. After the sale to HCA, there have been numerous news reports, public

protests, over 100 citizen complaints sent into the Attorney General, and statements from area

politicians protesting declining quality at the system.

90. Because the asset sale involved the sale of a nonprofit to a for-profit business, it

was necessary for Defendants to obtain regulatory approval from the North Carolina Attorney

General.

91. Between August 2018 and January 2019, the Attorney General required Mission

and HCA to include certain provisions in the Amended APA to secure his approval. Under these

provisions, Defendants promised to uphold certain commitments set forth in the Amended APA.

20
The Amended APA affords the Attorney General the authority to enforce the commitments in the

Business Court.

92. The scope of the Amended APA commitments is narrow and is not coextensive

with this lawsuit. The Amended APA agreement with the negotiated HCA commitments did not

cover quality of care or pricing. However, some of the commitments do cover relevant ground

and have been the subject of multiple public complaints:

• HCA promised that until January 2029 it would maintain the same level of charity
care coverage for poor patients as before. However, HCA has a) reduced coverage
for non-emergency services, b) implemented a threshold such that out-of-pocket
expenses must exceed $1,500 to qualify for charity care coverage, and c) ended pre-
approval for charity care coverage such that patients are forced to risk taking on
substantial debt or forgo needed care.

• Section 7.13(a) and Schedule 7.13(a) require HCA to provide until January 2029
numerous defined services at Mission Hospital-Asheville. However, patients and
staff have publicly noted that HCA has reduced budgets and staffing, making it
more difficult for medical staff to provide the same quality of service as before.

• Section 7.13(b) and Schedule 7.13(b) required HCA to provide until January 2029
numerous services at its five smaller regional hospitals. HCA has cut budgets,
staffing and quality there too. Nurses were so outspoken about their concerns that
they voted to unionize, a drastic and effectively unprecedented step.

• Under Section 7.13(j), Defendants asserted they had “no present intent to
discontinue any of the community activities, programs or services provided” prior
to the buyout. Less than a year later in October 2019, however, HCA closed
outpatient rehabilitation clinics in Candler and Asheville. In 2020, it closed
primary care practices in Candler and Biltmore Park, and ended chemotherapy
services at Mission Medical Oncology locations in Franklin, Brevard, Marion, and
Spruce Pine.

93. These cutbacks and profit-driven decisions drew criticism from regulators. Among

other things, the Attorney General wrote in February 2020 that the Defendants’ “decision to focus

on emergent care appears inconsistent with the Asset Purchase Agreement” and that the

Defendants’ website incorrectly claimed its charity care policy covered “non-elective” services.

The Attorney General’s office also said they had received a “surge” of complaints after the HCA

21
sale, including “harrowing” complaints about quality of care and staffing cuts. Other officials,

such as the Mayor of Asheville and Buncombe County officials, also publicly expressed “deep

concern” about HCA’s dramatic cuts and the pressure put on doctors and nurses. Doctors, nurses,

and patients have also called the situation created by HCA’s cost cutting “dangerous,” and have

noted that HCA’s policies force doctors and nurses to see more patients to maximize profit at the

expense of patient care.

94. After the HCA purchase, leading national agencies that assess quality of care

factors such as safety, accidents, injuries, infections, and readmissions lowered their ratings for the

hospital system. The Leapfrog Group, an independent agency, downgraded Mission Hospital-

Asheville to a “B” from an “A.” According to Leapfrog, the hospital fell short in various measures,

including infections, high-risk baby deliveries, some cancer treatment procedures, and the patient

experience regarding elective surgeries.

95. The Centers for Medicare & Medicaid Services (“CMS”) also downgraded

Mission. CMS uses surveys of patients’ experiences, including how responsive hospital staff were

to their needs and the cleanliness of the hospital environment. In 2020, CMS even threatened to

terminate its contract with HCA/Mission over patient safety concerns, a rare and particularly

serious step given Mission’s large share of Medicare and Medicaid patients.

96. The Mission Health System HCA now controls has quickly gone from one of the

most respected hospitals in the Nation and a “crown jewel” of North Carolina’s healthcare system

to a facility known for declining, dangerous conditions. Amid the decline, HCA’s profits are at an

all-time high, driven by the new addition of Mission Hospital-Asheville as the HCA chain’s second

highest revenue hospital out of all 100-plus ones in the chain.

22
V. HOSPITAL/INSURANCE MARKETS AND EFFECTS OF CONSOLIDATION

A. Hospital/insurance negotiations in a competitive market.

97. The market for hospital services is different from other product/services markets

because the person consuming the hospital services (the patient) does not negotiate—and in many

cases, does not even know beforehand—the costs of the services they are consuming.

98. Instead, commercial health plans, such as Blue Cross and Aetna, purchase medical

services for the benefit of their insured members, the consumers. Commercial health plans

negotiate with hospitals for the price the plans will pay for medical services, known as the “allowed

amount,” before services are consumed by members.

99. Commercial health plans generally do not negotiate with hospitals on a service-by-

service basis; rather, commercial health plans negotiate with hospitals for bundles of services that

the health plan will offer to members as “in-network” benefits. If the commercial health plan and

hospital reach a deal for a bundle of services (for instance, all acute inpatient hospital services),

the hospital will be considered in-network for every service in that bundle. This means that for

any service in that bundle, if a commercial health plan’s member receives that service from the

hospital, the commercial health plan will pay the hospital the allowed amount those two parties

negotiated for that service.

100. In competitive markets—markets with multiple hospitals—commercial health

plans will enter into a contract with a hospital for a bundle of services when the hospital offers

competitively priced and sufficiently high-quality services. In competitive markets, commercial

health plans may choose to include as in-network some bundles of services at a hospital but not

others; for instance, the commercial health plan may choose to have one hospital be in-network

for all acute inpatient hospital services, but the plan may choose not to include that hospital in-

23
network for some acute outpatient hospital services (visits not requiring an overnight stay) because

the plan could purchase higher quality versions of those outpatient services from a nearby

competing hospital or other outpatient provider at a lower price. Similarly, in a competitive

market, a commercial health plan may decline to purchase any services from a hospital if that

hospital’s price or quality of care are not competitive with other nearby providers.

101. If a commercial health plan wishes to be a viable product that consumers wish to

purchase for themselves (or employers wish to purchase for their employees), the plan must

include a comprehensive bundle of services that members can access in their region. A commercial

health plan that does not offer in-network services that individuals commonly desire or that

individuals may need in the case of unforeseen health problems will not be a viable insurance plan.

Similarly, if a commercial health plan only offers certain services (such as acute inpatient hospital

services) in-network at a hospital that is a long distance from many individuals’ residences, that

plan will not be viable, because individuals may not be able or willing to travel so far to receive

those services.

102. The costs that commercial health plans pay hospitals for the in-network services

they offer members are ultimately passed onto their members, such as the Plaintiffs, in the form

of commercial health insurance premiums. Thus, the insurance premiums paid by commercial

health plan members increase when the plans are forced to purchase services from hospitals at

higher rates. Health plan members also pay directly for the costs of medical services provided by

hospitals in the form of co-insurance payments and other out of pocket payments, such as co-pays.

103. In a competitive market, hospitals compete to be selected for inclusion in

commercial health plans. Then, commercial health plans compete to be selected by employers to

offer to their workers, or they compete to be selected by individuals.

24
 B. Hospital/Insurance negotiations in the absence of competition.

104. The unique mechanics of the healthcare market described above provide an

opportunity for hospital conglomerates with significant market power to illegally restrain trade

through unduly restrictive negotiations and agreements with commercial health plans that extract

supracompetitive prices. Supracompetitive prices are rates that are higher than what would be

found in the context of normal competition. In the market for hospital services, supracompetitive

prices come in the form of inflated allowed amounts, which directly lead to higher insurance

premiums and coinsurance payments.

105. When a commercial health plan seeks to offer a plan in a region where a significant

area is controlled by a single hospital, that hospital is in effect a “must have” hospital for that

health plan: Individuals and employers seeking insurance will not choose any health plan that

does not include necessary services provided by that hospital.

106. If a “must have” hospital decides to engage in anticompetitive behavior, it can cause

significant financial harm to both commercial health plans as well as employers and individuals

purchasing such plans. First, a “must have” hospital can demand from commercial health plans

allowed amounts that are grossly above what the hospital could obtain if it faced competition. This

is true both by virtue of the hospital’s extant market power, as well as the enormously high barriers

to entry when it comes to many services hospitals provide. These barriers to entry, which include

the costs of building facilities and hiring skilled staff (such as surgeons and anesthesiologists) as

well as regulatory hurdles such as obtaining a certificate of need from the State before opening a

new facility, prevent new entrants from entering the market and reining in the price the “must

have” hospital can charge. Second, if the “must have” hospital is part of a system that has other

facilities that do face competition, the hospital system can refuse to offer medical services at the

25
“must have” facility unless commercial health plans also agree to purchase medical services from

the system’s other facilities at high prices dictated by the hospital system.

107. These factors and others have led to a consensus in the field of healthcare

economics that monopolization of hospital markets significantly increases prices for hospital

services paid by commercial health plans and by employers and individuals, in the form of higher

direct payments to hospitals and higher insurance premiums. And the economic literature strongly

suggests that there are no concomitant improvements in quality from such monopolization. HCA

itself stated in a regulatory filing in Florida, “there is documented empirical evidence of the

negative aspects of lack of competition in a healthcare market on charges, costs, and quality of

care” and that “economic studies consistently demonstrate that a reduction in hospital competition

leads to higher prices for hospital care.”

C. Relevant markets

108. Judgment may be entered against Defendants for the illegal conduct described in

this complaint without defining the particular economic markets that Defendants’ conduct has

harmed. Defendants’ ability to impose anticompetitive contract terms in all, or nearly all, of its

agreements with commercial insurers and their ability to persistently charge supracompetitive

prices are direct evidence of Defendants’ market power that obviates any need for further analysis

of competitive effects in particular defined markets. Moreover, market definitions are unnecessary

because Defendants’ anticompetitive behavior is a per se violation of N.C.G.S. § 75-1 et seq.

109. Notwithstanding the foregoing, the relevant markets at issue in this case are defined

herein. For each, the product market includes only the purchase of medical services by commercial

health plans, including individual, group, fully insured, and self-funded health plans, as well as

related payments by patients directly to providers through coinsurance or otherwise. The relevant

26
product markets do not include sales of such services to government payers, e.g., Medicare,

Medicaid, and TRICARE (covering military families), because a healthcare providers’

negotiations with commercial health plans are separate from the process used to determine the

rates paid by government payers.

110. The three markets that are relevant to the illegal conduct described in this complaint

are properly defined as follows:

1. Primary Relevant Market: Asheville Region Inpatient Services

111. A relevant market in which Defendants have unlawfully maintained and leveraged

their monopoly power is the sale of inpatient general acute care hospital services to insurers (or

self-funded TPAs) in Buncombe and Madison Counties (the “Asheville Region Inpatient Services

Market”). Defendants participate in the Asheville Region Inpatient Services Market

predominately through their flagship facility, Mission Hospital-Asheville.

112. The sale of acute inpatient general acute care (previously defined as GAC) hospital

services is a relevant product market. Acute inpatient hospital services consist of a broad group

of medical and surgical diagnostic and treatment services that include a patient’s overnight stay

in the hospital. Although individual acute inpatient hospital services are not substitutes for each

other (e.g., orthopedic surgery is not a substitute for gastroenterology), commercial health plans

typically contract for various individual acute inpatient hospital services as a cluster in a single

negotiation with a hospital system. That is how Defendants negotiate with insurers with respect

to acute inpatient hospital services at Mission Hospital-Asheville. Moreover, non-hospital

facilities, such as outpatient facilities, specialty facilities (such nursing homes), and facilities that

provide long-term psychiatric care, substance abuse treatment, and rehabilitation services are not

viable substitutes for acute inpatient hospital services. Consequently, commercial health plans’

27
 and consumers’ demand for acute inpatient hospital services is generally inelastic because such

services are often necessary to prevent death or long-term harm to health. Thus, such services

can be treated analytically as a single product market.

113. The relevant geographic market for this product market is Buncombe and Madison

Counties (the “Asheville Region”). Defendants themselves have specified Mission Hospital-

Asheville’s service area to include Buncombe and Madison Counties.12 The Dartmouth Atlas of

Health Care—a well-established industry authority that defines geographic hospital markets—

defines the “Health Referral Region” for all of the Mission System hospitals as “NC-

ASHEVILLE.”13 The 2010 census reported the population of Buncombe County was 238,318 and

the population of Madison County was 20,764.

114. Commercial health plans contract to purchase acute inpatient hospital services from

hospitals within the geographic area where their enrollees are likely to seek medical care. Such

hospitals are typically close to their enrollees’ homes or workplaces. Insurers who seek to sell

commercial health plans to individuals and employers in the Asheville Region must include

hospitals in that region in their provider networks, because people who live and work in the

Asheville Region strongly prefer to obtain acute inpatient hospital services in that area and it could

be medically inappropriate and unfeasible to require them to travel farther. Consumers in the

Asheville Region have little or no willingness or practical ability to enroll in a commercial health

plan that provides no network access to acute inpatient hospital services located in the Asheville

Region.

12
E.g., Mission Hospital Implementation Strategy, 2013-15, p. 1 (“Our community, defined for the purposes of
community health needs assessment and this related implementation strategy, is comprised of Buncombe and
Madison Counties.”), https://missionhealth.org/wp-content/uploads/2018/04/2013-Mission-Hospital-
Implementation-Strategy.pdf (accessed June 2, 2021). See also IRS Form 990 for period ending September 2019,
Schedule H, supplemental information (“Mission Hospital primarily serves Buncombe and Madison Counties”).
13
Dartmouth Atlas of Health Care, https://www.dartmouthatlas.org/about/ (accessed July 12, 2021).

28
 115. For these reasons, there are no reasonable substitutes or alternatives to acute

inpatient hospital services in the Asheville Region for insurers wishing to offer commercial health

plans in that area. Nor is it viable for patients to seek acute inpatient hospital services elsewhere.

Consequently, competition from providers of acute inpatient hospital services located outside the

Asheville Region would not likely be sufficient to prevent a hypothetical monopolist provider of

acute hospital services located in the Asheville Region from profitably imposing small but

significant price increases for those services over a sustained period of time.

116. Defendants have a market share of approximately 80% to 90% for acute inpatient

hospital services in Buncombe County and Madison County, primarily due to the regional

dominance of Mission Hospital-Asheville. Defendants’ market share in this market is significant

enough to stifle competition and restrict freedom of commerce, and, during the relevant period,

Defendants have had the ability to control the price for this market.

2. Other Relevant Markets

a. Asheville Region Outpatient Services

117. A second relevant market is the sale of outpatient medical services to insurers in

Buncombe and Madison Counties (“Asheville Region Outpatient Services Market”). In general,

outpatient medical services encompass all the medical services a hospital provides that are not

inpatient medical services (i.e., services that do not require an overnight stay). Defendants

participate in this market through their flagship facility, Mission Hospital-Asheville, and other

HCA/Mission outpatient facilities in Buncombe and Madison counties.

118. The sale of outpatient medical services is a relevant product market. Outpatient

medical services consist of a broad group of medical, diagnostic, and treatment services that do

not include a patient’s overnight stay in the hospital. Although individual outpatient medical

29
services are not substitutes for each other (e.g., a CT scan is not a substitute for an annual

physical), commercial health plans typically contract for various individual outpatient medical

services as a cluster in a single negotiation with a hospital system, and that is how Defendants

negotiate with insurers with respect to outpatient hospital services at Mission Hospital-Asheville.

119. Unlike for acute inpatient hospital services, non-hospital facilities—such as

independent primary care providers, specialty facilities, ambulatory surgical centers, nursing

homes and facilities that provide long-term psychiatric care, substance abuse treatment, and

rehabilitation services—can be substitutes for outpatient medical services provided at a hospital.

Consequently, insurers’ and consumers’ demand for outpatient medical services from a hospital

is generally more elastic because, if given the opportunity, they could obtain some of these

services from non-hospital providers. But demand for outpatient medical services in general is

inelastic because such services are often necessary to prevent illness, loss of physical mobility, or

long-term harm to health. Thus, outpatient medical services can be treated analytically as a single

product market.

120. As with the primary relevant market described above, Asheville Region Inpatient

Services, the relevant geographic market for this market is the Asheville Region.

121. Insurers contract to purchase outpatient medical services from hospitals and non-

hospital providers within the geographic area where their enrollees are likely to seek medical care.

Such providers are typically close to their enrollees’ homes or workplaces. Insurers who seek to

sell insurance plans to individuals and employers in the Asheville Region must include providers

in that Region in their provider networks, because people who live and work in the Asheville

Region strongly prefer to obtain outpatient medical services in that area, and it could be medically

inappropriate to require them to travel farther. Consumers in the Asheville Region have little or

30
no willingness or practical ability to enroll in an insurance plan that provides no network access to

outpatient medical services located in the Asheville Region.

122. For these reasons, there are no reasonable substitutes or alternatives to outpatient

medical services in the Asheville Region for insurers wishing to offer insurance plans in that area.

Nor is it viable for patients to seek outpatient medical services elsewhere. Consequently,

competition from providers of outpatient medical services located outside the Asheville Region

would not likely be sufficient to prevent a hypothetical monopolist provider of outpatient medical

services located in the Asheville area from profitably imposing small but significant price increases

for those services over a sustained period of time.

123. The Asheville Region Outpatient Services Market is a separate market from the

Asheville Region Inpatient Services Market because they are not interchangeable and can be sold

separately. Commercial health plans can and often do purchase outpatient services from different

providers (i.e., non-hospital providers) than they purchase acute inpatient hospital services, which

can only be purchased from hospitals. The existence of non-hospital competitors would, in a

competitive market absent any anticompetitive behavior, reduce the price commercial health plans

would pay a hospital for outpatient medical services, but those competitors would not affect the

price a hospital could charge for acute inpatient hospital services. The markets are therefore

distinct.

b. Outlying Regions Inpatient and Outpatient Services

124. Other relevant markets at issue in this case involve the markets for (a) acute

inpatient hospital services, and (b) outpatient medical services, in Outlying Regions in Western

North Carolina in which or near where Defendants operate five Outlying Facilities. (“Outlying

Regions Inpatient and Outpatient Services Market”).

31
 125. The relevant products in these markets—acute inpatient hospital services and

outpatient medical services—are defined the same as for the Asheville Region, and those

definitions in the preceding paragraphs are realleged here.

126. The relevant geographic markets for these markets include the regions inclusive of

Macon, McDowell, Mitchell, Transylvania and Yancey Counties (the “Outlying Regions”) in

which, or near which, Defendants’ five outlying facilities (the “Outlying Facilities”) operate:

• Transylvania Regional Hospital, Transylvania County

• Angel Medical Center, Macon County
• Highlands-Cashiers Hospital, Macon County
• Mission Hospital McDowell, McDowell County
• Blue Ridge Regional Hospital, Mitchell County

127. Unlike Mission Hospital-Asheville, several of these Outlying Facilities face some

competition for acute inpatient hospital services and compared to Mission Hospital-Asheville

they face more significant competition for outpatient medical services, from other hospitals and

non-hospital providers in the geographic regions in which they operate. Thus, due to this

heightened level of competition, commercial health plans seeking to build a viable insurance

network may not, absent Defendants’ anticompetitive conduct, be required to include all these

facilities in-network in order to be viable. Or commercial health plans would be able to negotiate

a lower price for acute inpatient hospital services or outpatient medical services at these facilities.

128. The Outlying Regions Inpatient and Outpatient Market is a separate market from

the Asheville Region Inpatient Services Market because they are not interchangeable and can be

sold separately. Despite some geographic overlap, the two markets involve different facilities,

operating primarily in different regions, and they offer different types of service. For instance, in

the Asheville Region, Defendants offer acute trauma care, whereas this service is not offered by

any of the Outlying Facilities. Moreover, some of Defendants’ Outlying Facilities face more

32
competition from other providers than Defendants’ facility at Mission Hospital-Asheville faces,

particularly for acute inpatient hospital services. Commercial health plans can and often do

purchase outpatient services from different providers (i.e., non-hospital providers) than they

purchase acute inpatient hospital services from, which can only be purchased from hospitals. The

competition the Outlying Facilities face from both other hospitals and non-hospital facilities

would, in a competitive market absent any anticompetitive behavior, reduce the price commercial

health plans would pay the Outlying Facilities for inpatient and outpatient services, but those

competitors would not have an effect on the price a hospital could charge for acute inpatient

hospital services in the Asheville Region. The markets are therefore distinct.14

D. Defendants’ Market Power

129. Since the repeal of the COPA in 2016, Defendants have operated an unregulated

monopoly in the Asheville Region, particularly with respect to acute inpatient hospital services.

Defendants have likewise leveraged their monopolistic market power to increase their dominance

and pricing in the markets for Asheville Region Outpatient Services and the Outlying Regions

Inpatient and Outpatient Facilities. This has resulted in a situation where, both within the Asheville

Region and its surrounding areas, Defendants are able to control the prices paid by commercial

health plans and patients.

130. Defendants have a market share of 80 to 90% for acute inpatient hospital services

in both Buncombe County and Madison County, i.e., the Asheville Region Inpatient Services

Market. The Medicare Hospital Market Service Area File for the calendar year ending December

31, 2019, reflects that, with regard to inpatient origin for the top three zip codes, Mission Hospital-

Asheville’s market share was as follows: market share of 88.9% for zip code of residence 28806;

14
See also alternative market allegations under Count I.

33
market share of 86.5% for zip code of residence 28803; and market share of 87% for zip code of

residence 28715.15

131. While sometimes not as high as in Asheville, Defendants also have significant

market share in certain surrounding geographic regions, in part because they can exert control over

referrals in those regions through their dominance at Mission Hospital-Asheville. Outside of

Asheville, Defendants’ market share often exceeds 75% in areas where Defendants have only a

small hospital with less than 30 beds but where a large portion of patients are also directed to the

more distant Mission Hospital-Asheville. Defendants have used their monopoly in acute inpatient

hospital services in Buncombe and Madison Counties to attempt to monopolize inpatient and

outpatient services in other counties like Macon, McDowell, and Mitchell—each of which where

they now hold above 70% market share for inpatient hospital services when combining inpatient

referrals to Asheville and their small regional hospitals’ inpatient services. Alternatively,

Defendants have established additional monopolies in each of these counties where they hold over

a 70% market share (See Count I below).

132. Defendants have maintained this market share since the COPA’s repeal because of

the anticompetitive negotiating and contracting practices at issue in this suit. These

anticompetitive practices, described in more detail hereafter, have led directly to significant price

increases at all of Defendants’ facilities, for both inpatient and outpatient care, and these higher

prices have led directly to severely increased premiums paid by Plaintiffs and the putative class.

15
See American Hospital Directory, available at https://www.ahd.com/free_profile/340002/Mission_Hospital_-
_Memorial_Campus/Asheville/North_Carolina/ (accessed June 26, 2021).

34
VI. DEFENDANTS’ ANTICOMPETITIVE PRACTICES HAVE HARMED
COMPETITION, RESULTING IN HIGHER PRICES AND WORSE QUALITY

133. During the pertinent times and within the last four years, Defendants have engaged

in anticompetitive negotiating tactics with commercial health plans and/or have insisted on

contract terms including one or more anticompetitive provisions with insurers. These negotiating

tactics and contract clauses have included: tying arrangements and all-or-nothing arrangements,

gag clauses, and, on information and belief, non-participating provider rate clauses and anti-tiering

or anti-steering arrangements. The use of anticompetitive provisions and arrangements is

consistent with the areas of regulatory evasion identified in the Vistnes Report and with HCA’s

documented use of similar provisions and negotiating tactics in other states.

134. Individually and in combination, these contract provisions are designed to suppress

competition and transparency in the market for the sale of acute hospital services and increase the

prices Defendants can charge commercial health plans. Defendants use their market power to

force insurers to accept these restrictions which have the following anticompetitive effects:

• protecting Defendants’ market power and enabling Defendants to raise prices and
reduce quality of acute inpatient hospital services substantially beyond what would
be tolerated in a competitive market, to the detriment of consumer welfare;

• substantially lessening competition among providers in their sale of acute inpatient

hospital services;

• preventing the entry of potential competitors into the market by forcing insurers to
agree to terms that bar them from sharing competitive pricing information;

• preventing the entry of potential competitors into the market by forcing insurers to
agree to terms that bar them from directing consumers to lower cost providers;

• restricting the introduction of innovative insurance products that are designed to

achieve lower prices and improved quality for acute inpatient hospital services;

• reducing consumers’ incentives and ability to seek or even be aware of acute

inpatient hospital services from more cost-effective providers; and

35
 • depriving consumers of the benefits of a competitive market for their purchase of
inpatient hospital services.

135. These types of arrangements and agreements have been found to be illegal even in

markets with more robust provider competition than exists here, due to their inherent harm to

consumer welfare and competition. However, because Defendants have an unregulated monopoly

(instead of a built-out market power in a free market), the illegal anticompetitive impacts on

consumers are much more severe. Most obviously, healthcare costs in the Western North Carolina

market area that Defendants control are now dramatically higher than the North Carolina average

and still rising while quality is declining.

136. Anticompetitive contract provisions and negotiating tactics are particularly

problematic when a provider controls a “must have” hospital, as HCA acquired here when it

acquired Mission Hospital-Asheville. It is not practically possible to assemble a commercially

viable insurance plan in Western North Carolina that excludes Mission Hospital-Asheville. In a

market with a “must have” hospital, even the limited use of these contract provisions or negotiating

tactics causes much greater harm to consumers and potential competitors than the use of such

practices and provisions in a competitive market.

137. On information and belief, HCA/Mission has been among the most intransigent of

all systems in North Carolina during contract renewals and other negotiations with insurers.

Defendants have continued to insist on higher prices for declining quality of service because they

are aware of their “must have” status for commercial health plans and TPAs.

138. An insurance official summed up the problem with HCA/Mission in two words:

“their price.” The excessive price increases being billed directly and indirectly to Plaintiffs and

other patients would have been unlawful under the COPA, unsustainable in a competitive market,

and unrealistic before the HCA takeover.

36
 A. Defendants willfully and unlawfully acquired and/or maintained monopoly
power

139. Neither Mission nor HCA acquired monopoly power by outcompeting rivals on

price and quality as our antitrust laws envision. Instead, Mission became a monopoly solely by

virtue of a merger that would have been unlawful under the antitrust law but that was shielded

from suit by the protection the COPA gave from antitrust scrutiny.

140. Once Mission became so large as to be both indispensable to commercial health

plans and insulated from any meaningful competition, particularly for acute inpatient hospital

services, Mission’s executives sought and obtained the COPA’s repeal, freeing it from any relevant

government restrictions. HCA then purchased the monopoly in a cross-market merger and has

further exploited the system’s market dominance by raising prices and cutting costs in ways that

have harmed quality of care. Now and for the last several years, neither Mission nor HCA has

immunity from antitrust liability, meaning their unlawful acquisition and maintenance of this

monopoly is properly the subject of this lawsuit.

1. While the COPA was in effect, Mission circumvented its restrictions to

gain additional market power and raise prices

141. The COPA did not directly regulate the prices Mission could charge for services,

but it sought to do so indirectly through several limitations on the way Mission could do business.

Most notably, the COPA imposed three purported caps on Mission’s operations: a margin cap, a

cost cap, and an employed-physician cap.

142. The COPA’s margin cap on Mission was systemwide—Mission as a whole was not

allowed to raise its profit margin by more than a certain amount compared to comparable hospitals.

But the cost cap was specific only to Mission Hospital-Asheville: That facility could only increase

37
its costs at the same rate as a national index, but there was no limit on how much Mission could

increase its costs at other facilities.

143. In 2011, the Vistnes Report concluded that this structure gave Mission an incentive

to increase spending on Outlying Facilities—including by purchasing new ones—so as to push its

overall costs up, thereby allowing it raise prices to earn a higher profit while still meeting the

percentage margin cap.

144. Under the COPA, Mission grew its market share in Western North Carolina. It did

so by acquiring the five smaller Outlying Facilities, each time eliminating a competitor in the

process. In doing so, Mission could increase its costs without affecting the cost cap, thereby

allowing it to increase prices at all of its facilities without violating the COPA’s margin cap.

145. Thus, while the COPA was designed to ensure Mission’s recognized monopoly

power in the market for acute inpatient hospital services did not harm consumers in the region,

Mission grew substantially more dominant by acquiring competing practices, expanding its

geographic reach, and moving costs from Mission Hospital-Asheville to its Outlying Facilities.

This caused Mission’s prices to raise across the board, including for acute inpatient hospital

services.

146. In 2019, after the COPA was repealed, two FTC economists, Lien Tran and Rena

Schwarz, concluded that the COPA’s margin and caps did not prevent Mission from raising prices

20 percent more than similarly situated hospitals: “The evidence suggests that, despite the

margin/cost regulations, the COPA oversight did not prevent [Mission] from raising prices.”

147. As a result of these findings, the FTC in 2020 held up the example of the Mission

Hospital COPA as a reason why a COPA proposed for another State, Texas, should not be allowed:

In 2015, the North Carolina legislature repealed the state’s COPA statute as a result
of lobbying efforts by Mission Health, and the Mission Health COPA was

38
 terminated as of September 2016 – leaving no meaningful competitive or regulatory
constraint on Mission Health’s monopoly market power. In February 2019,
Mission Health was acquired by HCA Healthcare.

At the FTC COPA Workshop, empirical research was presented on the price effects
of the Mission Health COPA for inpatient hospital services from 1996 to 2008. The
study showed that Mission Health increased its prices by at least 20% more than
the control hospitals during the COPA period, suggesting that despite the margin
and cost regulations, state COPA oversight did not prevent Mission Health from
raising prices….

Kip Sturgis, from the North Carolina Attorney General’s office, was responsible
for overseeing the Mission Health COPA for nearly 20 years. Mr. Sturgis explained
that in hindsight, he would have implemented more quality metrics and financial
incentives for the hospital to control costs. He does not recommend that states use
COPAs due to the potential for regulatory evasion during the COPA period, and
the ability of hospitals to eventually be freed of COPA oversight, which leaves the
community with an unregulated monopoly.

2. HCA purchased Mission in order to acquire a monopoly system and

exploit that market power

148. After the COPA was repealed, HCA acquired Mission precisely because of its (now

unregulated) monopoly power, and with the knowledge that, as a larger national for-profit chain,

it would be better positioned to exploit Mission Health’s monopoly power in Western North

Carolina. As noted at the time:

• A former HCA executive remarked: “[I]t is a high growth market where they have
no competition and their margins are already strong” and “HCA is parachuting into
Asheville and getting the benefit of a COPA without any restrictions.” (Emphases
added).

• A leading healthcare finance reporter observed that the Mission acquisition “fits
with HCA’s longstanding strategy of scooping up facilities that dominate their
markets, which helps the company negotiate better rates with health insurers.”

• HCA in communicating with Wall Street analysts has called Mission a “market
maker” that “need[ed] to be a part of something bigger,” citing the acquisition as a
“model” for acquiring market power. Shortly after the acquisition, HCA executives
told Wall Street analysts that the company’s “market share has reached an all-time
high using the most recently available data. But we are pushing for more.”
(Emphasis added).

39
 149. Prior to the HCA acquisition of the Mission system, HCA owned hospitals in a

variety of important markets across the country, but not in North Carolina. Thus, when HCA

acquired Mission, it was not the case of one competitor in the same town or region acquiring

another. Rather, a dominant hospital owner in many other markets (HCA) acquired the dominant

hospital system in the Western North Carolina market (Mission).

150. According to peer-reviewed published studies, one effect of a cross-market or

multi-market merger is to cause an increase in healthcare prices.

151. On information and belief, HCA uses its market power via its ownership of

hospitals in other markets to leverage insurance companies to agree to higher prices at

HCA/Mission hospitals, and vice versa.

152. The FTC has on multiple occasions challenged in-market mergers due to the

anticompetitive effect of such mergers.

153. A cross-market merger of the type that has occurred here likewise has an

anticompetitive effect.

154. In 2019, 61 percent of US workers with employer-sponsored health coverage were

enrolled in self-insured plans, including 17 percent in small firms and 80 percent in large firms.16

155. Large firms likely have territories extending beyond the 18-county scope of the

Western North Carolina region identified by HCA as Mission’s extended service area.

156. When large self-funded employers negotiate with HCA, it becomes relevant to the

negotiation that HCA not only owns hospitals in NC but also in many other states.

16
Kaiser Family Foundation, 2019 Employer Health Benefits Survey, Sept. 25, 2019, https://www.kff.org/report-
section/ehbs-2019-summary-of-findings/ (accessed Aug. 3, 2021).

40
 157. Large self-funded employers are currently unable to restrain increases in healthcare

prices caused by the concentration of market power into large for-profit hospital chains like

HCA.17

158. Allowing HCA to join into its national network the monopoly in Western North

Carolina increases the anticompetitive effect of the monopoly far beyond where it was when only

local nonprofit Mission owned it.

159. Large self-funded employers and their TPAs pay more for access to the Mission

hospital monopoly as part of HCA’s Western North Carolina region than they would pay for that

access if Mission was only part of a western North Carolina hospital network.

160. The antitrust law restrains mergers to the extent that such combinations may tend

to lessen competition.

161. The asset sale of the Mission Hospital monopoly from old owner Mission to new

owner HCA was an unlawful merger or acquisition because it resulted in a lessening of

competition.

B. Defendants abuse their monopoly power by unreasonably negotiating with

commercial health plans and charging supracompetitive prices

1. Mission unreasonably withheld essential services from commercial health

plans and raised prices to supracompetitive levels after the COPA’s repeal

162. As noted above, Mission raised prices much more than regulators anticipated—or

were even aware about—while the COPA was in effect. These high prices were the result of

regulatory evasion by Mission and they were concealed by gag clauses. Mission’s public

statements regarding its costs and prices were inaccurate, unfair, and deceptive.

17
Matthew D. Eisenberg, Mark K. Meiselbach, Ge Bai, Aditi P. Sen, Gerard Anderson, Large Self-insured
Employers Lack Power to Effectively Negotiate Hospital Prices, The American Journal of Managed Care, July 13,
2021, Volume 27, Issue 7, https://www.ajmc.com/view/large-self-insured-employers-lack-power-to-effectively-
negotiate-hospital-prices (accessed Aug. 3, 2021).

41
 163. But the situation got worse after the COPA was repealed and Mission was free from

any semblance of State oversight. Specifically, after the COPA was repealed, two things relevant

to healthcare cost and quality in Western North Carolina happened almost immediately: (1)

Mission negotiated with insurers for price increases in aggressive ways the COPA would have

prevented, and (2) Mission executives began secretly negotiating a sale to HCA.

164. In 2017, Mission engaged in its first major post-COPA negotiation with Blue Cross,

the State’s largest health plan, over reimbursement rates. While details of the negotiations were

kept secret, on information and belief Mission asked for exorbitant increases in the prices Blue

Cross and its members were paying. When Blue Cross did not agree, Mission took its entire system

“out of network,” meaning that the 260,000 people in Western North Carolina insured by Blue

Cross could not seek care at Mission facilities unless they paid much higher prices out of their own

pocket. While hospital systems and insurers regularly negotiate over rates, a hospital system

taking an insurer out of network is considered “go[ing] nuclear.” This disrupted the administration

of healthcare in the region, requiring Blue Cross members to switch doctors, forgo medical care,

or drive long distances to receive care at a non-Mission facility. Mission remained out of network

for Blue Cross for two months, until the two parties reached an agreement in which on information

and belief Mission still received a rate increase but not as high as originally demanded. On

information and belief, Mission’s aggressive and unreasonable stance in these negotiations would

not have occurred under the COPA.

165. While the resolution of that dispute was kept secret, available data confirms that

Mission got much of what it wanted: significantly higher prices for GAC services. After the COPA

was repealed, the allowed amount Mission received from commercial health plans increased

substantially, beyond what would be found in a competitive market. For example, within a large

42
commercial claims dataset, the average allowed amount paid by most commercial insurers to

Mission, and later HCA, for knee replacements, was higher than for the rest of North Carolina,

and stayed higher, with the gap the same or growing over time:

166. For a shoulder arthroscopy, the rest of North Carolina’s costs have stayed relatively

stable with allowed amounts averaging just under $1,000 from 2016 to 2020. However, Mission’s

average allowed amount in the same dataset went up from about $1,000 in the last year of the

COPA to about $2,400 in 2020—an increase of close to 150% in four years:

43
 167. According to the same large claims commercial dataset, these allowed amount

increases were consistent across most services lines, particularly (but not exclusively) at Mission

Hospital-Asheville and for acute inpatient hospital services. Thus, while Mission could move

costs around under the COPA and increase prices, the data show that once freed from the COPA’s

restrictions Mission could effectively dictate the prices it charged in a manner that no other system

in North Carolina could.

2. HCA increased prices substantially after acquiring the hospital from

Mission while cutting staff and reducing quality

168. Once the nonprofit Mission became the for-profit HCA, prices rose at an even

higher rate than the State average, while at the same time HCA cut staffing to dangerously low

44
levels to further increase its profit. This resulted in more expensive and lower quality care for

Plaintiffs and other members of the putative class.

169. HCA/Mission is currently one of the most expensive hospitals in the State, and for

many procedures—including “plausibly undifferentiated” procedures for which quality does not

meaningfully vary by provider—it is the most expensive provider in the State.

170. A recent RAND analysis of nationwide hospital pricing data compared the prices

negotiated between hospitals and commercial health plans to the fee schedule set by Medicare,

with the Medicare price acting as a relative baseline (given the federal government’s regulatory

power). RAND reported this data analysis at the hospital systemwide level, without revealing the

prices charged for specific procedures.

171. According to RAND data, at Mission Hospital-Asheville Defendants charged

commercial insurers 372% above the Medicare price, on average, for inpatient and outpatient

services, and 393% above the Medicare price, on average, for inpatient services alone. That

compares with a mean of 262% and a median of 277% above Medicare for all hospitals in North

Carolina for which RAND released metrics (including Mission).

172. Defendants could not charge this much more than other North Carolina hospitals if

they were not (1) unlawfully leveraging monopoly power to force insurers to accept rates they

would not accept in a competitive market and (2) using anticompetitive means to prevent new

entrants from competing.

173. In much the same way that Mission in 2017 took Blue Cross out of network as part

of a price dispute, a similar fight unfolded two years later, this time with HCA in control. In 2019,

HCA used aggressive contract negotiating tactics to attempt to force Cigna, another major insurer,

to accept significant price increases. Cigna said that HCA/Mission’s “excessively high rates they

45
are demanding from our clients and customers” would “put affordable healthcare at risk.”

HCA/Mission’s price demands were so excessive that, once again, there was the risk of all

customers of a large insurer losing access to the only hospital in their area. Two contract disputes

of this level within two years are rare for almost any hospital system and would have been barred

by the COPA.

174. HCA itself stated in recent regulatory filings in Florida that, in a county with a

monopoly hospital system, insurers have “limited ability” to “negotiate market-driven rates for

hospital services” and that, “A large and growing body of literature suggests that health care

providers with significant market power can (and do) negotiate higher-than-competitive payment

rates.”

175. Data analysis of specific procedures comports with the systemwide RAND results.

For example, within a large commercial claims dataset, HCA’s average allowed amount earned

from commercial health plans for C-sections without complications at Mission Hospital-Asheville

was approximately $9,764 in 2019 and $10,077 in 2020. By contrast, the average allowed amount

at all other North Carolina hospitals was $4,287 in 2019 and $4,373 in 2020. The HCA price is

over 2.2 times greater than the rest of North Carolina. And while the price of C-sections at all

other North Carolina hospitals was relatively stable from 2016 to 2020 near $4,000, the prices at

Mission/HCA rose from $8,621 to over $10,000 for service at the Asheville hospital. The data

may be visualized as follows:

46
 176. Similarly, within that same claims data, HCA’s average allowed amount for a

coronary bypass is nearly double the North Carolina average and, after the repeal of the COPA,

Mission Hospital-Asheville has been the most expensive major hospital in the entire State for

coronary bypasses.

177. Likewise, with regard to cardiovascular stress tests, an average allowed amount for

this procedure at HCA was roughly double that of the average allowed amount in the rest of North

Carolina in 2020. While the cost for this procedure slightly declined in the rest of North Carolina

from 2016 to 2020, the cost at Mission increased about 30% from the last year of the COPA to

2020:

47
 178. Even low cost but high-volume procedures like a lipid panel have seen significant

price increases after the repeal of the COPA. Within a large commercial insurance claims dataset,

Mission’s average allowed amount for lipid panels increased by about a third while the allowed

amount in the rest of the state declined:

48
 179. As prices for these services and others have risen, HCA has reduced the quality of

its care by aggressively cutting staff and budgets and by encouraging those doctors who have

stayed to focus on maximizing the volume of patients they see so as to maximize profits.

180. As of March 2021, at least 79 doctors had left or planned to leave the system since

HCA’s takeover. Other doctors describe new employment contracts with HCA in which the

compensation equations remove quality of care metrics and focus almost entirely on the number

of patients seen and amount billed. As one departing doctor explained, “The change in ownership

has shifted this system’s priority away from the health of Western North Carolina to the health of

the stockholders.” A significant number of patients have lost their preferred family doctors either

due to doctors leaving the system or from HCA’s clinic restructurings and closures.

181. Similarly, nurses working at HCA have described their units as “inhumanely

understaffed,” with conditions so bad that even travel nurses hired to fill in gaps were leaving

before their contracts expired. Patients and families describe situations where, for example, their

49
nurse told them, “… she cries every single night because she knows she is not giving appropriate,

competent patient care.”

182. Were Defendants operating in a competitive market for acute care services, they

would not have been able to take these anticompetitive actions. However, commercial health plans

and patients have no choice but to endure the worsening quality of service.

183. As noted, on February 10, 2020, the Chairman of the Buncombe County

Commissioners Brownie Newman, Asheville Mayor Esther Manheimer, and most of the

delegation of Buncombe County’s elected officials in the North Carolina statehouse lambasted

these conditions, finding that “numerous, aggressive staff cuts over the past year, put[] patient

safety at risk” and that “HCA has aggressively pursued contract renegotiations with multiple

physician practices, resulting in unfortunate outcomes.”

184. Both anecdotal reports and expert watchdogs have confirmed that these actions

have led directly to a decrease in the quality of care. As noted, the Leapfrog Group dropped

Mission Hospital’s patient safety rating from an “A” to a “B” after HCA’s takeover, and CMS also

downgraded Mission per surveys of patients’ experiences regarding, among other things,

responsiveness of hospital staff and the cleanliness of the hospital.

3. HCA abuses its market power by charging for costly, unnecessary

procedures

185. After the repeal of the COPA, Defendants began more frequently billing for

procedures that academic literature has determined are ineffective and are nearly always

considered overuse. In fact, Mission Hospital-Asheville now ranks 88 out of 89 hospitals in North

Carolina for unnecessary procedures and is in the highest 2% of all hospitals nationwide for billing

for unnecessary procedures.18 It has a “Value of Care” rating of “D-minus.”

18
https://lownhospitalsindex.org/hospital/memorial-mission-hospital-and-asheville-surgery-center/.

50
 186. But at the same time, Mission Hospital-Asheville is one of HCA’s most profitable

in the country, and in fact has immediately become the second largest revenue hospital in the entire

HCA chain.19 HCA revenues from Mission Hospital-Asheville were recently reported to be over

$1.2 billion, ahead of all but one of the other 100-plus hospitals in the HCA chain and second only

to HCA’s Methodist Hospital (Texas) which has over twice as many beds.

187. In a competitive market, insurers contracting with a hospital can discipline such

behavior by threatening in their next negotiation not to cover certain services, to negotiate for caps

on particular procedures likely to be unnecessary, or to threaten to take the hospital out of network

and purchase services from a competitor. But because of Defendants’ unregulated monopoly

status, the all-or-nothing tying schemes described herein, and the lack of any significant competitor

for inpatient hospital services, insurance plans and consumers are forced to pay for some of the

highest rates of unnecessary procedures anywhere in the country.

188. Because HCA controls the only hospital in the Asheville market and because

consumers generally do not question provider recommendations while in the hospital, HCA’s

practice of adding costly and unnecessary procedures to a consumer’s bill represents a clear abuse

of market power.

189. For example, routine blood tests are a frequent source of price disparities and

overbilling by providers with both the volume of tests per patient and the cost of tests per patients

varying dramatically by provider. However, in competitive markets, insurers can incentivize

providers who do not overuse or overcharge for tests.

19
Top 50 HCA Hospitals by Net Patient Revenue, https://www.definitivehc.com/blog/top-hca-hospitals-nationwide
(accessed Aug. 4, 2021) (reflecting that Mission Hospital-Asheville has the second-highest revenues of all of the
HCA hospitals, at $1,209,452,518).

51
 190. On information and belief, Defendants have exploited the lack of competition in

the market to charge a substantially higher price than both the North Carolina average and the price

that would be tolerated in a hypothetically competitive Asheville market. Defendants have

increased prices for routine blood tests, despite no evidence that the actual cost of providing such

tests has increased at all. In fact, based on available data, for one routine blood test, Defendants

have increased the allowed amount charged to many insurers for the test by about 20% since they

acquired Mission Hospital. This leads directly to Plaintiffs and other putative class members

paying higher co-insurance for these unnecessary procedures, and it leads to their paying higher

insurance premiums because commercial health plans are also liable for their share of the payments

for the unnecessarily costly procedures as well.

191. In a competitive market, such overpricing would be aggressively policed by

insurers, patients, and competing providers. In this case, since the COPA’s repeal left the system

unregulated, Defendants have increased prices for often overbilled procedures knowing that

commercial health plans and patients have no meaningful choice but to accept these practices.

These practices have led directly to the increased costs of commercial insurance for affected

consumers.

192. Finally, HCA has charged exorbitant rates for forensic exams such as rape kits,

which should be free. Assistant Director of victim advocacy organization REACH of Macon

County, Jennifer Turner-Lynn explained that “prior to the [HCA-Mission] merger, we never had

an issue with rape victims being charged for the use of the emergency room.... The last victim that

I took over received a bill for $1,000. The only services that she received in the emergency room

was to have the rape kit performed.” Billing a sexual assault victim for a forensic exam is

prohibited under state and federal law. Under N.C.G.S. § 143B-1200, a medical facility cannot

52
bill a sexual assault victim or commercial health plan for a forensic medical exam. Additionally,

the Violence Against Women Act mandates that states must cover the “full out-of-pocket costs of

forensic medical examinations for victims of sexual assault” to maintain eligibility for funding.

The full cost is defined as “any expense that may be charged to a victim in connection with a

forensic medical examination for the purpose of gathering evidence of a sexual assault.”20

4. HCA abuses its trauma center monopoly

193. HCA has shown a pattern of using emergency care, and especially trauma centers,

to saddle patients with unnecessary, exorbitant charges. Trauma centers employ specialists

equipped to deal with major traumatic injuries and receive substantially higher reimbursements for

the theoretically complex care. However, in what appears to be a business practice across the

nation documented by investigative reporting,21 HCA has been shown to be significantly more

likely than other providers to admit patients with only mild injuries to trauma centers in order to

obtain higher reimbursement rates.

194. In competitive markets, this costly practice can be policed by competitor providers

or by insurers who can pressure providers to reduce deceptive trauma center admissions with the

threat of taking a provider out-of-network for non-compliance. In a monopoly market with a “must

have” hospital and one monopoly trauma center, like the one HCA intentionally acquired from

Mission, such policing effectively cannot take place. Absent HCA’s unlawful monopoly power,

it would not be able to carry on this practice.

195. As the only state-designated trauma center in Western North Carolina, HCA can

set prices far above the market rate. In Asheville, HCA’s trauma center “activation fees”—the

20
28 C.F.R. § 90.13(b)
21
Jay Hancock, In alleged health care ‘money grab,’ nation’s largest hospital chain cashes in on trauma centers,
Kaiser Health News, June 14, 2021, https://khn.org/news/article/in-alleged-health-care-money-grab-nations-largest-
hospital-chain-cashes-in-on-trauma-centers/ (accessed Aug. 3, 2021).

53
charges applied automatically when a patient is routed to the trauma center—are about twice as

high as the North Carolina average, costing consumers over $9,000 for every unnecessary

admission, before they even incur procedure charges.

196. Similarly, Defendants have a history of pushing patients into more expensive

Emergency Department (“ED”) care. Nationally, a recent study sponsored by shareholders of

HCA found that HCA’s Medicare ED admissions were “well-above the national average, growing

over time, and not explained by patient case mix,” which resulted in excess Medicare payments of

$1.1 billion over five years.22

197. On information and belief, HCA engages in this practice in North Carolina,

regularly running patients, including those with commercial health plans, through the ED for tests

that do not require such an admission and thus charging commercial health plans and patients

significantly more. In North Carolina specifically, HCA’s ability to push patients into more

expensive ED care is even more unrestrained due to Mission Hospital-Asheville’s effective total

control over the market.

198. In a competitive market, a provider that pushed individuals towards higher cost ED

care would face strong pressure from commercial health plans and local governments to reduce

the practice. In a market with only one hospital, HCA is able to push individuals towards higher

cost ED care while simultaneously reducing the quality of the ED. Because of HCA’s market

power and use of anti-competitive contract clauses, insurers are less able to push back and may

even be contractually blocked from informing consumers about the full extent of the ED practices.

22
Notice of exempt solicitation, CtW investment group, April 1, 2021,
https://www.sec.gov/Archives/edgar/data/860730/000137773921000007/hca21shletter.htm (accessed Aug. 3, 2021);
Oct. 16, 2020 letter from CtW to Charles O. Holliday, Chairman, audit & compliance committee, HCA Healthcare,
Inc., https://s3-prod.modernhealthcare.com/2021-03/CtW%20to%20HCA.pdf (accessed Aug. 3, 2021).

54
 C. Defendants have engaged in illegal tying of services through all-or-nothing
contracting practices and other anticompetitive contracting terms

199. Both Mission and HCA have engaged in unlawful tying agreements, through which

they have used their monopoly in one market—acute inpatient hospital services in Buncombe and

Madison Counties—to extract profits in other markets.

200. Under antitrust law, tying occurs when an entity that has market power in one

market leverages that market power in order to reap profits in another market. The market in which

the defendant has an existing monopoly is called the “tying” market, and the separate market in

which the defendant extracts profits is called the “tied” market. Under a tying arrangement, the

entity will sell one product (the tying product) only under the condition that the purchaser buy a

second product (the tied product). Where the defendant has significant market power or a

monopoly in the tying market, such tying arrangements are considered anticompetitive and

unlawful under the antitrust laws.

201. One way tying occurs in hospital markets is through a dominant hospital’s use of

“all-or-nothing” practices in their negotiations with insurers. When a hospital system is the only

entity in a given region to offer a product or service that commercial health plans must include in

their network to be viable, that hospital system can refuse to sell that product or service to insurers

unless insurers also agree to purchase other services from the hospital system, including services

that the insurer would otherwise purchase from a different hospital system for a lower price. Either

orally during negotiations or in the contracts themselves, the hospital system gives the insurer an

“all-or-nothing” choice: Take everything the hospital wants to sell at the price the hospital dictates,

or get nothing at all. This paradigm was apparent in Mission’s 2017 contract dispute with Blue

Cross, where it responded to Blue Cross’ specific concern about proposed price increases at

55
Mission Hospital-Asheville by making the entire Mission system unavailable to Blue Cross—

across multiple geographic markets and both inpatient and outpatient markets.

202. Here, Defendants offer a product that any commercial insurer operating in Western

North Carolina needs: the only acute inpatient hospital services in Buncombe and Madison

Counties. Due to Mission Hospital-Asheville’s dominant market share for acute inpatient hospital

care in Buncombe and Madison Counties, a commercial health plan could not offer a plan that

does not include these services and remain commercially viable. Thus, insurers functionally do

not have a choice: They must purchase from Defendants acute inpatient hospital care at Mission

Hospital-Asheville. Thus, this is the “tying” product. And Mission and HCA have tied it to two

different products over which they have less market power: (1) outpatient medical care at Mission

Hospital-Asheville and the rest of Buncombe and Madison Counties, and (2) inpatient and

outpatient care at Mission’s and HCA’s Outlying Facilities.

1. Tying inpatient services at Mission Hospital-Asheville to outpatient

services at Mission Hospital-Asheville

203. One way in which Defendants engage in anticompetitive tying is by only offering

acute inpatient hospital services at Mission Hospital-Asheville to commercial health plans if those

insurers will also contract to purchase outpatient medical services at Mission Hospital-Asheville

from Defendants at supracompetitive rates (the “Inpatient/Outpatient Tying Scheme”). When

Defendants engage in all-or-nothing contracting in this manner, acute inpatient hospital services

at Mission Hospital-Asheville is the “tying” product, and outpatient services at Mission Hospital-

Asheville are the “tied” product.

204. While Defendants’ Mission Hospital-Asheville has a 80 to 90 percent market share

in the market for acute inpatient hospital services in Buncombe and Madison Counties,

Defendants’ face somewhat more competition for outpatient medical services in those markets.

56
This competition comes from, for example, ambulatory service centers, rehabilitation facilities,

and independent physicians. On information and belief, insurers negotiating with Defendants

would, absent Defendants’ Inpatient/Outpatient Tying Scheme, choose either not to contract for

certain outpatient hospital services from HCA at Mission Hospital-Asheville and its other facilities

in Buncombe and Madison Counties, or those insurers would negotiate a lower price for those

services, given the competition from other outpatient providers in the region. But because

Defendants can threaten to withhold their must-have acute inpatient hospital services as part of the

same negotiation, commercial health plans must acquiesce to Defendants’ demands related to

outpatient care.

205. Defendants’ Inpatient/Outpatient Tying Scheme has resulted directly in higher

costs, both in terms of allowed amounts paid for services at that facility and increased co-pays,

premiums, and deductibles for Plaintiffs and the putative class. The Scheme has also harmed

competition for outpatient medical services in Buncombe and Madison Counties, because

independent providers of outpatient services are unable to fairly compete with Defendants on price

or quality. When independent providers cannot compete, they eventually go out of business, which

leads to even less competition. On information and belief, because of Defendants’

Inpatient/Outpatient Tying Scheme, outpatient facilities have closed or relocated to more

competitive markets and would-be competitors for outpatient care have declined to operate in

Buncombe and Madison Counties, which has decreased the quantity of outpatient care and

increased prices paid by insurers, ultimately, patients for outpatient care.

2. Tying inpatient services at Mission Hospital-Asheville to inpatient and

outpatient services at HCA/Mission’s five outlying hospitals

206. A second tying scheme Defendants have engaged in is the tying of acute inpatient

hospital services in Buncombe and Madison Counties to inpatient and outpatient care at the

57
Outlying Facilities (“Asheville/Outlying Facilities Tying Scheme”). Because any insurer offering

a network that includes Western North Carolina must include in that network acute inpatient

hospital services at Mission Hospital-Asheville, Defendants are able to force those insurers to also

include inpatient and outpatient services at Defendants’ Outlying Facilities in network, at

supracompetitive prices. As in the Inpatient/Outpatient Tying Scheme, the “tying” market in the

Asheville/Outlying Facilities Tying Scheme is the same: acute inpatient hospital care in Buncombe

and Madison Counties. The “tied” markets are both acute inpatient hospital services and outpatient

medical services at Defendants’ five Outlying Facilities.

207. As a direct and proximate result of Defendants’ Asheville/Outlying Facilities Tying

Scheme, a substantial amount of competition is foreclosed.

208. On information and belief, for each of the Outlying Facilities, Defendants in their

negotiations with commercial health plans generally condition the inclusion of Mission Hospital-

Asheville’s acute inpatient hospital services on those insurers also offering both inpatient and

outpatient services at the Outlying Facilities. Defendants generally insist on the Outlying

Facilities’ inclusion even if insurers would otherwise choose to put a different, competing hospital

in network, or even if insurers would not otherwise be willing to pay the allowed amounts

Defendants insist on for inpatient and outpatient care at the Outlying Facilities.

209. One example of how the Asheville/Outlying Facilities Tying Scheme works in

practice is Defendants’ hospital in McDowell County, Mission Hospital-McDowell. It is located

at 430 Rankin Drive, Marion, NC 28752, about 45 minutes driving time to the east of Asheville.

58
 210. Mission Hospital McDowell has significant market power, but not monopoly

power, in its region.23 Data reflects the following approximate market shares in the three most

proximate zip codes: in zip code 28752, 37.4%; in code 28761, 36.1%; and in code 28762, 35.3%.

211. A rival hospital, Carolinas HealthCare System Blue Ridge Morganton, is located

less than 30 minutes away to the east of Mission Hospital-McDowell. It is located at 2201 S

Sterling St, Morganton NC 28655.

212. Mission Hospital-McDowell has approximately 30 beds. Carolinas HealthCare

System Blue Ridge Morganton has approximately 184 beds. Mission Hospital-McDowell and

Carolinas HealthCare System Blue Ridge Morganton are competitors.

213. Cost data available in a large commercial dataset for Mission Hospital-McDowell

reflects that for a variety of procedures where there is a significant volume of those procedures for

each year, such as CT scans, Mission Hospital-McDowell is not only consistently one of the most

expensive in the State but is more than triple the average cost for some routine procedures.

214. For example, available price data reflects that the average allowed amount for a CT

scan of the abdomen and pelvis (CPT 74176) is about $2,000 at Mission Hospital-McDowell,

whereas the average in the State is just under $500. This divergence is particularly stark because

it is unable to be explained by a quality difference, as CT scans are relatively standard. Instead,

the cost differences are explained by contract negotiations between insurers and hospitals.

215. When the COPA was in effect, Mission Hospital-McDowell was well below the

State average with respect to prices for outpatient care. Today, Mission Hospital-McDowell

charges approximately 50% above the State average for outpatient care—corresponding with the

period in which HCA/Mission were free to engage in unregulated price increases and

23
But the combination of Mission McDowell and Mission Asheville might be enough to exceed 60 to 70% market
share, which may be viewed as a monopoly share. See allegations at paragraph 225 below.

59
anticompetitive contracting practices. Using an overall analysis of outpatient procedure costs,

Mission Hospital-McDowell has gone from being less expensive than 60% of facilities in the State

for outpatient medical service in 2016 to among the top 3% most expensive facilities in the entire

State now. This dramatic pricing shift coincides with the removal of COPA regulations in late

2016 that prevented excessive price increases or abusive contracting practices.

216. Mission Hospital-McDowell is not only significantly more expensive than the State

average for outpatient care—it is also significantly costlier than its only significant competitor,

Carolinas HealthCare System Blue Ridge Morganton, which is less than a 30-minute drive away.

Moreover, on information and belief, commercial health plans do not consider either hospital to

be of significantly higher quality than the other, particularly for “plausibly undifferentiated

procedures” such as a CT scan.

217. In a competitive market, commercial health plans would encourage members to

seek lower cost care just minutes away. However, on information and belief, because of the

Asheville/Outlying Facility Tying Scheme, Defendants have foreclosed real competition on price

or quality in other markets that appear competitive on paper. Furthermore, on information and

belief, Defendants use contracting provisions to prevent commercial health plans from fully

informing consumers of price differences or from directing consumers to the lower cost option.

Defendants are thereby using, or leveraging, their monopoly market power over acute inpatient

hospital services in the Asheville Region to anticompetitive effect in the Marion NC-area market.

218. Mission has similarly used its monopoly dominance in inpatient acute care at

Mission Hospital-Asheville in Buncombe and Madison County to attempt to monopolize several

outlying inpatient and outpatient markets where its other small regional hospitals are located,

60
namely, Angel Medical Center and Highlands-Cashiers Hospital (Macon County), Blue Ridge

Regional Hospital (Mitchell County), and Transylvania Regional Hospital (Transylvania County).

219. For example, according to the Medicare Hospital Market Service Area File for 2019

for inpatient origin, HCA has an 85.3% market share in zip code 28712 in Brevard, NC, the top

inpatient zip code for HCA’s Transylvania Regional Hospital in Brevard, Transylvania County.

This total HCA market share comes from Transylvania Regional Hospital’s 44.8% market share

in the zip code and Mission Hospital-Asheville’s 40.5% market share in the zip code. Pardee UNC

Hospital only holds 10.4% market share, despite being about half the driving distance from

Brevard and substantially lower cost than Mission Hospital-Asheville. This monopolization

cannot be explained in a competitive market without tying and/or contracting provisions that

prevent insurers from encouraging members to seek care at a closer and lower cost facility.

220. In total, HCA/Mission controls over 75% of the inpatient market share in

Transylvania County and charges significantly higher prices the closest non-HCA facilities.

221. Similarly, according to the Medicare Hospital Market Service Area File for 2019

for inpatient origin, HCA has a 92.4% market share in zip code 28741 in Highlands, NC, the top

inpatient zip code for HCA’s Highlands-Cashiers Hospital in Highlands, NC. This total HCA

market share comes from Highland-Cashiers Hospital’s 43.8% market share in the zip code and

Mission Hospital-Asheville’s 48.7% market share in the zip code. Northeast Georgia Medical

Center only holds 7.6% market share, despite being closer driving distance from Highlands and

substantially lower cost than Mission Hospital-Asheville.

222. In total, HCA/Mission controls over 70% of the inpatient market share in Macon

County despite charging significantly higher prices than the closest non-HCA facility. Similarly,

this monopolization cannot be explained in a competitive market without tying and/or contracting

61
provisions that prevent insurers from encouraging members to seek care at a closer and lower cost

facility, as discussed below.

223. Stated differently, at the time of the 1995 COPA, Mission only had a monopoly in

the Buncombe and Madison County markets.

224. By contrast, the HCA system in North Carolina now has a monopoly (above 70%)

market share both in Buncombe and Madison Counties, as well as in other Counties:

225. Now, because of the combined market power of the facilities it acquired in the asset

purchase from the former Mission system, HCA has a market share in the range which may be

considered monopoly market power (above 60 to 70%), in seven different counties:

• Yancey – 90.9%

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 • Madison -- 90%
• Buncombe -- 86.6%
• Mitchell – 85.4%
• Transylvania -- 78.7%
• McDowell -- 76.4%
• Macon -- 74.7%

3. Use of anti-steering, anti-tiering contracting practices

226. Steering arrangements are arrangements by which a commercial health plan is able

to steer plan subscribers to a lower-cost rather than a higher-cost facility. Commercial health plans

may seek to steer patients by including language in insurance plan documents encouraging

subscribers to choose one facility rather than another or conditioning the selection of a higher-cost

facility on a higher copay or deductible from the subscriber.

227. In addition, or alternatively, commercial health plans may seek to place providers

in tiers, with the insurance plan subscriber being encouraged through a variety of means to choose

the provider in the tier of better-value providers over a discouraged tier of more costly providers.

228. Steering is an important tool commercial health plans can use to control healthcare

costs, particularly in consolidated markets. President Trump’s Assistant Attorney General for

Antitrust criticized the type of contracting provisions and negotiating tactics HCA uses, saying,

“Without these provisions, insurers could promote competition by ‘steering’ patients to medical

providers that offer lower priced, but comparable or higher-quality services. Importantly, that

practice benefits consumers, but the anti-steering restrictions prevented it.” Likewise, Senator

Chuck Grassley, then chairman of the Senate Judiciary Committee said the anti-steering practices

of HCA and several other systems were, “restrictive contracts deliberately designed to prevent

consumers’ access to quality, lower cost care.”

63
 229. During the pertinent times, on information and belief, Defendants have required

one or more insurers not to use steering or tiering language, or to use weaker language or provisions

than the insurers would have desired to use, as a condition of obtaining access to Defendants’

“must have” Mission Hospital-Asheville for their commercial health plans.

230. Investigative reporting has shown that HCA has a history of using anti-steering or

similar contract language.

4. Use of gag clauses and lack of transparency.

231. For years, Defendants have obscured their price increases and anticompetitive

contracts from regulators and the public through use of gag clauses that prevent insurers from

revealing their agreements’ terms. The effect of this gag clause language is anticompetitive as it

prevents competitors, insurers, and consumers from understanding in a transparent manner the

pricing and other terms and arrangements being used by Defendants.

232. Moreover, HCA has continued to refuse to release the prices it charges for these

and other procedures in a fully transparent manner despite a recent change in federal law requiring

it to do so. Effective January 1, 2021, a new federal regulation required the public disclosure of

certain aspects of HCA’s negotiated price terms in agreements with private insurance companies.

See 45 C.F.R. § 180.50. HCA has however failed to fully disclose this information in a timely,

complete, and understandable manner.

233. By violating this price disclosure regulation, and by including gag clauses in

HCA/Mission’s provider agreements with insurers, Defendants have kept community members,

regulators, and the general public from learning of the grossly inflated, monopolistic prices that

are being charged.

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 234. This rule was first created by the Trump Administration over the opposition of

HCA’s lobbying and then proactively continued by the Biden Administration—signaling growing

bipartisan consensus that the lack of price transparency with regard to hospital services leads to

higher prices for consumers and employers.

D. Defendants’ unlawful course of conduct has led directly to substantially higher

insurance premiums and other costs for Plaintiffs and the putative class

235. Insurance premiums in the counties where Mission operates are substantially

higher than the state average and substantially higher than areas with higher costs of living. For

example, individual insurance premiums are now approximately 50% higher in Mission’s self-

defined service area than Winston-Salem; about 55% higher in Mission’s service area than

Durham, Raleigh, or Charlotte; and about 60% higher than Greensboro.

236. Mission’s anticompetitive impact on prices is perhaps most obvious for an

individual who simply moved across a county line outside of Mission’s 18 county service area.

For example, crossing the county line from Rutherford County (in Mission’s self-defined service

area) to Cleveland County (outside of Mission’s service area), an individual would see premiums

drop immediately by 29%. Similarly, driving East from Cherokee County or South from Macon

County (in Mission’s self-defined service area) into Tennessee or Georgia, an individual would

see an immediate premium decline of over 20% as visualized below:

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 237. These dramatic differences can be primarily attributed to market power, according

to academic studies. For example, a Harvard University analysis found that, “Variation in

spending in the commercial insurance market is due mainly to differences in price markups by

providers rather than to differences in the utilization of health care services . . . 70 percent of

variation in total commercial spending is attributable to price markups, most likely reflecting the

varying market power of providers.” And the US government’s official guide to shopping for

individual health insurance indicates that “differences in competition” are one of the primary

sources of variation in premiums.

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 238. During the pertinent times, Defendants’ anticompetitive practices have allowed

them to charge of supracompetitive prices to commercial health plans and TPA payers.

239. When private insurance and TPA payers have been obligated to pay these

supracompetitive prices to Defendants, the payers in turn have passed the prices along to their

insurance plan subscriber base.

240. Patients also are directly harmed by Defendants’ supracompetitive prices through

direct payments made by patients to Defendants, in the form of copays, coinsurance payments, and

deductibles. These direct payments are often calculated as a percentage of the allowed amount for

which the patient is responsible for, so when allowed amounts reach supracompetitive levels, as

they have at HCA/Mission, patients who must go to Defendants’ system for care suffer direct

financial injury.

241. As a result of Defendants’ supracompetitive prices, and the pass-through by

insurance and TPA payers of the amounts at issue, ordinary insurance and healthcare consumers

have been injured by having to pay higher premiums, copays, coinsurance payments, and

deductibles.

E. Antitrust Injury

242. As a result of the Defendants’ monopoly power, monopolization and attempted

monopolization, and the anticompetitive practices Defendants have used to increase negotiated

prices with insurers and self-funded TPAs, reduce provider competition, and reduce quality of

services, patients such as Plaintiffs and other putative class members throughout Western North

Carolina have paid within the last four years, and continue today to pay higher prices for health

insurance coverage (including premiums, employee contributions, copays, deductibles and out-of-

pocket payments) and pay higher coinsurance payments directly to Defendants for services than

67
they otherwise would, while receiving lower quality care than they would in a competitive market.

In addition, Defendants’ conduct has caused injury to competition for the reasons stated herein.

F. Additional facts regarding the named Plaintiffs

1. William Davis

243. William Alan Davis is a citizen and resident of North Carolina with a residence

address in Clyde, North Carolina, Haywood County. Mr. Davis resides to the west of Candler. In

the last several years, Mr. Davis received medical care from Timothy Plaut, M.D. in Candler. Dr.

Plaut worked for Mission MyCare Plus in Candler.

244. After HCA bought the Mission system, HCA announced that it was shutting down

the Candler primary care practice. Mr. Davis learned from Dr. Plaut about the shutdown. Pursuant

to a news article dated February 23, 2021,24 Dr. Plaut was described as stating that he was shocked

to learn that the clinic and job he loved would be gone in just 45 days. He stated that “[i]t created

a lot of hardship for our patients.” Dr. Plaut estimated that more than 7,000 patients total, many

without insurance, were treated at the two clinics. “Our practice in Candler was one of the original

safety nets through Mission and we took care of a lot of Medicaid and Medicare; we had homeless

folks and severe mental illness.”

245. Recently, when Mr. Davis visited his father at the hospital in Asheville, he noted

that the hospital environment and his father’s room was dirty. Mr. Davis and his wife noticed

there was a trash can which had not been emptied. When Mr. Davis’ father was in the hospital, it

appeared that the nurses who took care of him for the most part were all “travelling nurses,”

24
Karen Zatkulak, Clinics closed, dozens of doctors leave Mission Health since HCA takeover, Feb. 23, 2021,
https://wlos.com/news/local/clinics-closed-dozens-of-doctors-leave-mission-health-since-hca-takeover (accessed
June 28, 2021).

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including his main nurse and the phlebotomist who treated him. There appeared to be a shortage

of certified nurse assistants and unit coordinators.

246. When Mr. Davis himself was a Mission Hospital patient, he went to the emergency

room. It was his impression that one or more unnecessary tests were ordered.

247. Mr. Davis also received care at Mission WorkWell, located in Asheville, NC,

including in the time period from 2018 onward.

248. During the relevant period, Plaintiff paid premiums in order to be enrolled as a plan

member in the respective health plans. As a result of HCA’s anticompetitive conduct, he, and each

other Plaintiff described below, within the last four years paid artificially high premiums, co-

payments, deductibles, co-insurance payments, and/or out-of-pocket payments not covered by the

health plans.

2. Richard Nash

249. Richard Nash is a citizen and resident of North Carolina with a residence address

in Candler, North Carolina, Buncombe County. Mr. Nash was born in 1960.

250. Mr. Nash has health insurance with Blue Cross through his wife’s employment

which she has held for over 25 years.

251. Mr. Nash worked in construction for years and later worked in a plant. Mr. Nash

was injured on the job several years ago and has significant medical issues. During his time

working in the construction industry, Mr. Nash helped during the construction of the cardiology

ward at the Mission Asheville hospital during the time period of approximately 1991 until 1995.

252. In 2017, while covered by his insurance with Blue Cross, Mr. Nash was scheduled

to receive cataract surgery in both eyes. He was scheduled to receive the cataract surgery from a

physician he was assured was very renowned. Then, Mission allowed its contract with Blue Cross

69
to expire due to a dispute over Mission’s demand to increase the amount the insurance company,

and by extension its policyholders, would have to pay. When Mission fell out of the Blue Cross

network, Mr. Nash had to cancel his surgery. He subsequently had to reschedule the procedure

through a different facility.

253. During the relevant period, Plaintiff paid premiums in order to be enrolled as a plan

member in the health plan. As a result of HCA’s anticompetitive conduct, he paid additional

amounts similar to the other Plaintiffs.

3. Will Overfelt

254. Will Overfelt is a citizen and resident of Asheville, NC. Mr. Overfelt has lived in

the Asheville area for approximately 20 years.

255. In February 2020, Mr. Overfelt’s father was ill. He was sent to the Mission Hospital

Asheville emergency room by his primary care physician and was found to have advanced cancer.

256. Mr. Overfelt’s father was admitted to Mission Hospital Asheville for approximately

one week. During that time, Mr. Overfelt and his mother frequently visited Mr. Overfelt’s father

and noticed that the conditions at the hospital were deteriorated compared to how they had been

in years past when family members had gone to the hospital.

257. Mr. Overfelt noticed that the rooms were dirty. It was hard to get information. He

had trouble getting his father his pain medications timely.

258. He would push the call button and an excessive amount of time would lapse before

someone would come to his father’s room. The quality of care was clearly worse that it had been

in years past.

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 259. Mr. Overfelt recalls early on, he saw a napkin on the floor in his father’s hospital

room. He left it where it was, wondering if any cleaning was really being done. The napkin was

still there on the floor a week later when his father was discharged.

260. There were delays in getting help so his father could go to the bathroom. There

were delays in obtaining water and various other items of sustenance and comfort. His father

apparently was never bathed while there.

261. His father was discharged to go to a nursing home/rehabilitation facility, where he

passed away approximately three days thereafter from his cancer. The date of death was February

18, 2020.

262. Mr. Overfelt applied for an insurance policy under the Affordable Care Act

(“Obamacare”) in December 2020. He was approved for a policy through Blue Cross. The health

policy coverage began on January 1, 2021.

263. Since that time, Mr. Overfelt has paid a premium of approximately $168 per month.

He believes the total premium cost is approximately $480 / month but that part of it is covered by

a subsidy component of the Act.

264. During the relevant period, Plaintiff paid premiums in order to be enrolled as a plan

member in the health plan. As a result of HCA’s anticompetitive conduct, he paid additional

amounts similar to the other Plaintiffs.

4. Jonathan Powell

265. Jonathan Walton Powell is a citizen and resident of North Carolina who resides at

2960 Henderson Mill Rd, Morganton, NC 28655, in Burke County.

266. Mr. Powell has been employed as a machinist for a local company and has worked

at that company for approximately 28 years. He has been and continues to be a very good worker

71
at his job. In fact, his father worked in the same building that he works in today for many years.

Mr. Powell grew up in Burke County and most of his family continues to reside there.

267. Mr. Powell has been fortunate to be insured through his employer with group health

insurance. His insurance is with Blue Cross Blue Shield and he has had that insurance for over the

last 20 years.

268. For the last several years, Mr. Powell has had the need to seek medical care. His

primary care physician had always been associated with Mission Hospital and as a result, when he

has begun ill and needed additional care and testing, his primary care physician has sent him to the

Mission facilities. Mr. Powell had great confidence in his primary care physician as he had taken

very good care of Mr. Powell for over the last ten years.

269. Unfortunately, after the sale of Mission Hospital and the other Mission facilities,

his physician spoke to him about his inability to continue Mr. Powell’s care. He was told by his

physician that the new owner, HCA, overloaded him with so many patients, he could not continue

to provide the proper care for them and he had had enough. He shared with Mr. Powell that he

was going to work for another hospital. Since this past March, 2021, Mr. Powell’s former

physician has provided medical care for others in an adjoining town.

270. Mr. Powell believes that if HCA had not purchased Mission, his care would have

continued to be provided by the physician who was most knowledgeable about him and his

condition and who had treated him for years.

271. Since March, 2021, the former medical office that he went to in Morganton, which

was called Mission Community Medicine, Burke, was completely closed down by HCA.

272. Because he lost his physician and the practice was closed, Mr. Powell is now being

treated at Mission Health, Nebo Family Medicine, Nebo, N.C. He is being cared for by a

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Physician’s Assistant and he still has not had another physician assigned to him since his primary

care physician left.

273. Mr. Powell has been recently treated at Mission Hospital in Asheville, having last

been seen there on June 10, 2021, where he remained for over two hours.

274. Mr. Powell has been seen a number of times at the Urgent Care Office at Mission

McDowell Hospital. Numerous tests have been ordered on his behalf. He is scheduled for an

appointment at Mission McDowell Hospital this month on August 17, 2021.

275. Mr. Powell has lung problems and his pulmonologist at Asheville Pulmonology, a

clinic also associated with Mission Hospital, sends him to Mission McDowell Hospital, which is

closer than Mission Hospital, Asheville, for his CT scans.

276. During the pertinent times, Mr. Powell has received medical care both from HCA-

Mission facilities related to the Mission McDowell Hospital in Marion, NC, as well as from

facilities related to the Mission Asheville Hospital. Mr. Powell believes that while there is another

community hospital, Grace Hospital, in his county, he is being referred to the Mission hospitals

because his physicians are affiliated with those hospitals.

277. Mr. Powell has continued to and plans to continue to receive care from and

including at My Care Now-McDowell, 472 Rankin Drive, Marion NC 28752; from Mission

Hospital, Memorial Campus, 509 Biltmore Avenue, Asheville NC 28801; at Mission McDowell

Hospital, 430 Rankin Dr, Marion, NC 28752; and at Asheville Pulmonary & Critical Care

Associates, P.A., 30 Choctaw Street, Asheville NC 28801 who are affiliated with Mission

Asheville Hospital.

278. As a result of HCA’s anticompetitive conduct, Mr. Powell paid additional amounts

similar to the other Plaintiffs.

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 5. Faith C. Cook, Psy.D

279. Faith C. Cook, Psy.D. is a citizen and resident of North Carolina who resides in

Black Mountain, North Carolina, Buncombe County.

280. Dr. Cook is a Clinical Psychologist who received her Doctorate from the University

of Hartford and her Bachelor’s Degree from the University of Georgia. She practices with Sylva

Clinical Psychology in Sylva NC.

281. Dr. Cook has health insurance through a Blue Cross policy under the Affordable

Care Act.

282. As a dedicated health care provider, Dr. Cook has a great interest in ensuring that

her patients and others have access to very good and reasonably priced health care. She has

concerns regarding the Mission monopoly and the resulting increasing costs since HCA took over

Mission while simultaneously the quality of the patient care has been significantly deteriorating.

283. During the pertinent times, Dr. Cook has excessive amounts as a proximate result

of Defendants charging supra-competitive prices for healthcare, similar to the other Plaintiffs.

6. Katherine Button

284. Ms. Button is the executive chef and in a leadership role with a restaurant group.

The restaurant group has a self-insured plan through Roundstone.

285. During the pertinent times, Ms. Button and her family have had insurance through

a self-funded plan which includes Mission hospital in the plan. She and her family have received

medical care through Mission, including from Mission Hospital-Asheville.

286. One reason why her business switched over to a self-funded format was due to the

crushing costs of regular health insurance in the Asheville area, due to HCA/Mission. However,

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even with self-funding, the costs are still high. The self-funded administrator, Roundstone, has

advised that the reason why the costs are so high in the Asheville region is due to HCA/Mission.

287. During the pertinent times, Ms. Button has paid excessive amounts as a proximate

result of Defendants charging supra-competitive prices for healthcare, similar to the other

Plaintiffs.

VII. CLASS ALLEGATIONS

A. Class definition

288. Plaintiffs define the putative class in this litigation as follows:

Any individual or entity in the Relevant Region who is a North Carolina resident
and who, during all or part of the period beginning August 10, 2017 to the present,
with regard to Defendants’ acute care hospital services or ancillary products, paid
some portion of premiums, deductibles, copays or coinsurance for a self-insured or
fully-insured product offered by or administered by Aetna, Blue Cross Blue Shield,
BMS TPA, Cigna, Coventry, CWI Benefits, Crescent TPA, Humana, Healthgram
TPA, Key Benefits Administrators TPA, MedCost, MedCost Ultra, MultiPlan
PHCS, United Healthcare, Wellpath, and Western North Carolina Healthcare
Coalition.25

289. The “Relevant Region” in this case is the 18 Counties that comprise Defendants’

total service area: Avery, Buncombe, Burke, Cherokee, Clay, Graham, Haywood, Henderson,

Jackson, Macon, Madison, McDowell, Mitchell, Polk, Rutherford, Swain, Transylvania and

Yancey. This is identical to the 17-County western North Carolina geographic market known as

Rating Area 1 under the Affordable Care Act, except that Burke County is added.

290. Excluded from the class are the Presiding Judge, employees of this Court, and any

appellate judges exercising jurisdiction over these claims as well as employees of that appellate

court(s).

291. This class definition is subject to revision or amendment as the matter proceeds.

25
This class definition with regard to identities of insurers and TPAs relies on public information from Defendants.
Plaintiffs reserve the right to modify or amend this definition as they receive additional information.

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 B. Rule 23 requirements

292. This action is suitable for resolution on a class-wide basis under the requirements

of North Carolina Rule of Civil Procedure 23.

293. Numerosity: The class is composed of hundreds and thousands of class members,

the joinder of whom in one action is impractical. The class is ascertainable and identifiable from

Defendants’ records and documents.26

294. Commonality: Questions of law and fact common to the class exist as to all

members of the class and predominate over any questions affecting only individual members of

the class. These common issues include, but are not limited to:

a. Whether Defendants have a monopoly in a defined product market in Buncombe

County;

b. Whether Defendants have a monopoly in a defined product market in Madison

County;

c. Whether Defendants have a monopoly in a defined product market in the Counties

of Yancey; Mitchell; Transylvania; McDowell; and/or Macon.

d. Whether Defendants, including Mission, and HCA, whether either or both have
acted willfully or otherwise unlawfully to acquiring or maintaining their monopoly
or attempting to do so;

e. Whether Defendants have used their market power and anticompetitive means to
impose prices far above those that would be charged in a competitive market,
causing harm to Plaintiffs and others;

f. Whether Defendants have engaged in improper tying practices with regard to their
provider agreements with insurance companies and TPAs;

g. Whether Defendants have engaged in improper anticompetitive practices with

regard to the terms and provisions that they have required to be included in their
payer/provider agreements;

26
Populations per US Census information for the 18 Counties include: Avery (17,506), Buncombe (256,886),
Burke (89,968), Cherokee (27,969), Clay (10,946), Graham (8,509), Haywood (61,053), Henderson (114,913),
Jackson (42,938), Macon (34,813), Madison (21,499), McDowell (45,227), Mitchell (15,004), Polk (20,557),
Rutherford (66,599), Swain (14,260), Transylvania (33,775) and Yancey (17,760).

76
 h. Whether Defendants have willfully abused their monopoly power by reducing
output and quality, including by reducing budgets and staffing at facilities;

i. Whether Defendants’ conduct has violated the North Carolina State Constitution’s
prohibition on monopolies;

j. Whether Defendants’ conduct has violated N.C.G.S. § 75-1 et seq.;

k. Whether Defendants COPA immunity defense at most only applies to some period
of time for Buncombe County and Madison County, and does not apply to a
monopoly during some or all of the pertinent times in the Counties of Yancey;
Mitchell; Transylvania; McDowell; or Macon;

l. Whether Defendants COPA immunity defense does not even apply for Buncombe
or Madison Counties, due to regulatory evasion;

m. Whether Defendants’ breaches of state law caused antitrust injury to the Plaintiffs
and class members, injured competition and/or injured consumer welfare; and

n. Whether the Plaintiffs and the class members are entitled to an award of
compensatory damages and/or injunctive, declaratory or equitable relief.

295. Typicality: Plaintiffs’ claims are typical of the claims of the other class members.

Plaintiffs and the other class members have been injured by the same wrongful practices.

Plaintiffs’ claims arise from the same practices and course of conduct that give rise to the other

class members’ claims and are based on the same legal theories.

296. Adequate Representation: Plaintiffs will fully and adequately assert and protect the

interests of the other class members. Plaintiffs have retained class counsel who are experienced

and qualified in prosecuting class action cases. Neither Plaintiffs nor their attorneys have any

interests conflicting with class members’ interests.

297. Predominance and Superiority: This class action is appropriate for certification

because questions of law and fact common to the members of the class predominate over questions

affecting only individual members, and a class action is superior to other available methods for the

fair and efficient adjudication of this controversy, since individual joinder of all members of the

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class is impracticable. Should individuals be required to bring separate actions, courts would be

confronted with a multiplicity of lawsuits burdening the court system while also creating the risk

of inconsistent rulings and contradictory judgments. This class action presents fewer management

difficulties while providing unitary adjudication, economies of scale and comprehensive

supervision by a single Court.

298. Injunctive, Declaratory, Equitable Relief: The prosecution of the claims of the

putative class in part for injunctive relief, declaratory or equitable relief, is appropriate because

Defendants have acted, or refused to act, on grounds generally applicable to the putative class,

thereby making appropriate final injunctive relief, or corresponding declaratory relief, for the

putative class as a whole.

VIII. CLAIMS FOR RELIEF

COUNT ONE
MONOPOLIZATION IN VIOLATION OF STATE ANTITRUST LAW
(N.C. Const. Art. 1 § 34; N.C.G.S. § 75-1 et seq.)

299. The above-alleged paragraphs 1 through 299 are incorporated by reference.

300. Article 1, Section 34 of the North Carolina State Constitution states: “Perpetuities

and monopolies are contrary to the genius of a free state and shall not be allowed.”

301. N.C.G.S. § 75-2.1, entitled, “Monopolizing and attempting to monopolize

prohibited,” provides: “It is unlawful for any person to monopolize, or attempt to monopolize, or

combine or conspire with any other person or persons to monopolize, any part of trade or

commerce in the State of North Carolina.”

302. N.C.G.S. § 75-8, entitled, “Continuous violations separate offenses,” provides:

“Where the things prohibited in this Chapter are continuous, then in such event, after the first

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violation of any of the provisions hereof, each week that the violation of such provision shall

continue shall be a separate offense.”

303. N.C.G.S. § 75-16, entitled, “Civil action by person injured; treble damages,” states:

“If any person shall be injured or the business of any person, firm or corporation shall be broken

up, destroyed or injured by reason of any act or thing done by any other person, firm or corporation

in violation of the provisions of this Chapter, such person, firm or corporation so injured shall have

a right of action on account of such injury done, and if damages are assessed in such case judgment

shall be rendered in favor of the plaintiff and against the defendant for treble the amount fixed by

the verdict.”

304. N.C.G.S. § 75-16.1, entitled, “Attorney fee,” provides, in pertinent part: “In any

suit instituted by a person who alleges that the defendant violated G.S. 75-1.1, the presiding judge

may, in his discretion, allow a reasonable attorney fee to the duly licensed attorney representing

the prevailing party, such attorney fee to be taxed as a part of the court costs and payable by the

losing party, upon a finding by the presiding judge that: (1) The party charged with the violation

has willfully engaged in the act or practice, and there was an unwarranted refusal by such party to

fully resolve the matter which constitutes the basis of such suit….”

305. Defendants have monopolized, and continue to monopolize, the relevant market

alleged herein in violation of Article I, Section 34 of the North Carolina Constitution and North

Carolina General Statutes Section 75-2.1.

306. During the pertinent times including the last four years, Defendants possessed

monopoly power in the relevant market.

307. During the pertinent times, including after the 2016 repeal of the COPA but prior

to its 2019 asset sale to HCA, Mission possessed monopoly power in the relevant market. From

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August 10, 2017 onward, Mission possessed an approximate 80 to 90% market share in Buncombe

and Madison Counties. Mission’s market power was durable rather than fleeting and included the

ability to raise prices profitability above those that would be charged in a competitive market.

308. During the pertinent times, including after the asset sale from Mission, HCA

possessed monopoly power in the relevant market. From 2019 onward, HCA has possessed an

approximate 90% market share in Buncombe and Madison Counties. HCA’s market power was

durable rather than fleeting and included the ability to raise prices profitability above those that

would be charged in a competitive market.

309. During the pertinent times including the last four years, Defendants engaged in the

willful acquisition or maintenance of that power as distinguished from growth or development as

a consequence of a superior product, business acumen, or historic accident; and, Defendants

accompanied their possession of monopoly power with an element of anticompetitive conduct.

310. Regardless of whether Mission unlawfully acquired a monopoly in light of the

COPA, during the pertinent times, including after the COPA was repealed in September 2016,

Mission unlawfully maintained a monopoly.

311. Mission engaged in continuing violations within the meaning of N.C.G.S. § 75-8

while under the COPA and after the COPA was repealed in 2016.

312. From January 2019 forward, HCA has unlawfully created and maintained a

monopoly.

313. During the pertinent times, Defendants have engaged in the willful creation or

maintenance of their monopoly power.

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 314. In addition to or in the alternative to the above-stated monopolization claim, the

Plaintiffs also allege, as actionable monopolization: A relevant market in this case is the product

market for general acute care (GAC) inpatient hospital services in the Outlying Regions in Western

North Carolina where Defendants operate the Outlying Facilities. (“Outlying Regions Inpatient

Services-Only Market”).

315. The relevant product in this market—acute inpatient hospital services—is defined

the same as for Asheville Region Inpatient Services market, Asheville Region.

316. HCA today owns and controls monopoly market shares for inpatient care in seven

counties in Western North Carolina. In the Outlying Regions Inpatient Services-Only Market,

HCA has monopoly market power in the Counties of Yancey – 90.9%; Madison -- 90%; Buncombe

-- 86.6%; Mitchell – 85.4%; Transylvania -- 78.7%; McDowell -- 76.4%; and Macon -- 74.7%.

317. The geographic market for present purposes is defined as the Outlying Regions in

which or near where Defendants’ Outlying Facilities operate.

318. At the time of the performance of the COPA from 1995 to 2016, the State

reasonably relied on Mission’s representations that Mission had monopoly market power in

Buncombe and Madison Counties only. The scope of the COPA did not authorize monopolies in

any other Counties including in the Outlying Regions.

319. The COPA did not authorize Mission (or HCA) to monopolize the Outlying

Regions.

320. Defendants have unlawfully monopolized the Outlying Regions.

321. Defendants have willfully created or maintained a monopoly with regard to the

Outlying Regions Inpatient Services-Only Market.

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 322. Defendants’ conduct has had an anticompetitive effect including by acquiring and

closing down competitors. All five of the Outlying Facilities now in HCA’s Outlying Regions

counties once were owned by other owners who were actual or potential competitors of HCA

Mission Hospital-Asheville.

323. Wherefore, Plaintiffs and class members are entitled to an award of classwide

damages in excess of $25,000; and are entitled to award of reasonable costs and attorney’s fees to

the extent allowable by law.

COUNT TWO
ATTEMPTED MONOPOLIZATION

324. The above-alleged paragraphs 1 through 323 are incorporated by reference.

325. N.C.G.S. § 75-2.1, entitled, “Monopolizing and attempting to monopolize

prohibited,” provides, in pertinent part: “It is unlawful for any person to … attempt to monopolize

… any part of trade or commerce in the State of North Carolina.”

326. During the pertinent times, including within the last four years, Defendants

possessed monopoly power in markets including, but not limited to, the Buncombe and Madison

County market.

327. During the pertinent times, Defendants engaged in the willful and unlawful attempt

to obtain, create, maintain or expand their monopoly power.

328. During the pertinent times, Defendants attempted to acquire, maintain, or expand

their monopoly through illegitimate means.

329. During the pertinent times, Defendants had a specific intent to monopolize a

relevant market, including by attempting to monopolize the Asheville Region Outpatient Services

Market; the Outlying Regions Inpatient and Outpatient Services Market; and/or the Outlying

Regions Inpatient Services-Only Market.

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 330. During the pertinent times, Defendants engaged in predatory or anticompetitive

acts, as more specifically alleged above.

331. Absent Court intervention, due to the Defendants’ actions, there is a dangerous

probability of successful monopolization, specifically in the Asheville Region as to Asheville

Region Outpatient Services; and in the Outlying Regions as to Outlying Regions Inpatient and

Outpatient Services.

332. Wherefore, Plaintiffs and class members are entitled to an award of classwide

damages in excess of $25,000; and are entitled to award of reasonable costs and attorney’s fees to

the extent allowable by law.

COUNT THREE
RESTRAINT OF TRADE IN VIOLATION OF STATE ANTITRUST LAW
(N.C.G.S. § 75-1 et seq.)

333. The above-alleged paragraphs 1 through 332 are incorporated by reference.

334. N.C.G.S. § 75-1, entitled, “Combinations in restraint of trade illegal,” states:

“Every contract, combination in the form of trust or otherwise, or conspiracy in restraint of trade

or commerce in the State of North Carolina is hereby declared to be illegal. Every person or

corporation who shall make any such contract expressly or shall knowingly be a party thereto by

implication, or who shall engage in any such combination or conspiracy shall be guilty of a Class

H felony.”

335. N.C.G.S. § 75-2, entitled, “Any restraint in violation of common law included,”

states: “Any act, contract, combination in the form of trust, or conspiracy in restraint of trade or

commerce which violates the principles of the common law is hereby declared to be in violation

of G.S. 75-1.”

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 336. During the pertinent times, Defendants have engaged in the use of contracts and

agreements in restraint of trade as alleged hereinabove. Defendants have negotiated and enforced

contracts containing anticompetitive provisions restrictions with insurers or TPAs which are

contracts, combinations, and conspiracies within the meaning of North Carolina General Statutes

Sections 75-1 and 75-2.

337. The challenged contractual restrictions unreasonably restrain trade in violation of

North Carolina General Statutes Sections 75-1.1 and 75-2.

338. Wherefore, Plaintiffs and class members are entitled to an award of classwide

damages in excess of $25,000; and are entitled to award of reasonable costs and attorney’s fees to

the extent allowable by law.

COUNT FOUR
INJUNCTIVE, EQUITABLE, DECLARATORY RELIEF

339. The above-alleged paragraphs 1 through 338 are incorporated by reference.

340. The Court has authority to award declaratory, injunctive or equitable relief under

the Declaratory Judgment Act, which states at N.C.G.S. § 1-253: “Courts of record within their

respective jurisdictions shall have power to declare rights, status, and other legal relations, whether

or not further relief is or could be claimed. No action or proceeding shall be open to objection on

the ground that a declaratory judgment or decree is prayed for. The declaration may be either

affirmative or negative in form and effect; and such declarations shall have the force and effect of

a final judgment or decree.”

341. Further, under G.S. § 1-254: “Any person interested under a deed, will, written

contract or other writings constituting a contract, or whose rights, status or other legal relations are

affected by a statute, municipal ordinance, contract or franchise, may have determined any

question of construction or validity arising under the instrument, statute, ordinance, contract, or

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franchise, and obtain a declaration of rights, status, or other legal relations thereunder. A contract

may be construed either before or after there has been a breach thereof.”

342. Plaintiffs show that to the extent the facts and law allow for the imposition of

equitable, declaratory or injunctive remedies, they plead recourse to any and all such remedies.

343. Plaintiffs request that the Court order the reformation of Defendants’ practices,

and/or contractual and agreement terms, including, for example, to require greater pricing

transparency, express language against use of “all or nothing” arrangements, express provisions

committing not to use anti-tiering or anti-steering provisions, and other such remedies.

344. Plaintiffs in addition to their damages claims, request injunctive, declaratory or

equitable relief and show that the injunctive relief will prevent Defendants from imposing

anticompetitive all-or-nothing, anti-tiering, and anti-transparency provisions in their contracts,

thus allowing health plans to steer patients away from lower value providers.

345. Plaintiffs and the Class members have standing to and do seek equitable relief

against Defendants, including an injunction to prohibit Defendants’ illegal conduct as well as an

order of equitable restitution and disgorgement of the monetary gains that Defendants obtained

from their unfair competition.

IX. JURY DEMAND

346. Plaintiffs demand a trial by jury.

X. PRAYER FOR RELIEF

WHEREFORE, Plaintiffs pray that this Court enter judgment on their behalf and that of

the proposed class and adjudge and decree as follows:

A. certifying the proposed class, designating the named Plaintiffs as class

representatives and the undersigned counsel as class counsel, and allowing the
Plaintiffs and the class to have trial by jury;

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B. finding that Defendants have monopolized, and continue to monopolize, the
relevant market alleged herein in violation of Article I, Section 34 of the North
Carolina Constitution and North Carolina General Statutes Section 75-2.1, and that
Plaintiffs and the members of the class have been damaged and injured in their
business and property as a result of this violation;

C. finding that Defendants have engaged in a trust, contract, combination, or

conspiracy in violation of North Carolina General States Sections 75-1 and 75-2,
and that Plaintiffs and the members of the class have been damaged and injured in
their business and property as a result of this violation;

D. ordering that Plaintiffs and members of the class recover threefold the damages
determined to have been sustained by them as a result of Defendants’ misconduct
complained of herein, and that judgment be entered against Defendants for the
amount so determined;

E. entering judgment against Defendants and in favor of Plaintiffs and the class
awarding restitution and disgorgement of ill-gotten gains to the extent such an
equitable remedy may be allowed by law;

F. awarding reasonable attorney’s fees, costs, expenses, prejudgment and post-

judgment interest, to the extent allowable by law;

G. awarding equitable, injunctive and declaratory relief, including but not limited to
declaring Defendants’ misconduct unlawful and enjoining Defendants, their
officers, directors, agents, employees, and successors, and all other persons acting
or claiming to act on their behalf, directly or indirectly, from seeking, agreeing to,
or enforcing any provision in any agreement that prohibits or restricts competition
in the manner as alleged hereinabove; and

H. awarding such other and further relief as the Court may deem just and proper.

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