Federal lawsuit against Advocate Aurora claims health care provider suppresses competition, hikes prices

Advocate Aurora Health's Milwaukee headquarters in Walker's Point.

A little over two weeks since a merger between Milwaukee-based health care provider Advocate Aurora Health (AAH) and Charlotte, North Carolina-based Atrium Health was announced, a federal antirust lawsuit has been filed against Advocate Aurora.

The lawsuit was filed by Uriel Pharmacy Health and Welfare Plan and Uriel Pharmacy, located on a small farm near East Troy. The business, which has a self-funded health plan, alleges that Advocate Aurora has “abused its dominant status” to suppress competition and raise prices to levels that are unsustainable to Wisconsin employers.

“Our complaint alleges that Advocate Aurora’s anticompetitive conduct has unlawfully taken huge sums of money from the pockets of Wisconsin employers to fund the hospital system’s never-ending expansion across the country,” said Jamie Crooks, managing partner of Fairmark Partners, LLP, which represents the plaintiffs. “Advocate Aurora’s actions in recent years look more like that of a ruthless Wall Street institution that happens to own Wisconsin hospitals instead of a non-profit charity focused on the delivery of health care.”

The complaint also alleges that despite claiming charitable non-profit status and paying no taxes, Advocate Aurora has paid its executives tens of millions a year and designed an acquisition strategy that allows it to take over facilities and then raise prices for the exact same services.

“We are already mounting what will be a vigorous defense as all of our decisions are guided by a relentless pursuit to provide the highest quality, affordable care for our patients,” said Advocate Aurora in a statement. “Our data continues to demonstrate the added value we provide for our patients, communities and team members by growing as a system. Through our population health model, we drive efficiency and quality improvements, enhance health outcomes and bend the cost curve.”

The suit asks for Advocate Aurora to refund the money it has allegedly overcharged businesses, unions, and local governments and seeks to ban Advocate Aurora from engaging in specific kinds of anticompetitive conduct.

“Without intervention, AAH will continue to use anticompetitive contracting and negotiating tactics to raise prices on Wisconsin employers and use those funds for aggressive acquisitions and executive compensation. This will reduce economic growth in Wisconsin, harm patients and taxpayers, and drive employers out of Wisconsin,” reads the lawsuit.

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Ashley covers startups, technology and manufacturing for BizTimes. She was previously the managing editor of the News Graphic and Washington County Daily News. In past reporting roles, covering education at The Waukesha Freeman, she received several WNA awards. She is a UWM graduate. In her free time, Ashley enjoys watching independent films, tackling a new recipe in the kitchen and reading a good book.

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