HARRISBURG, PA — Pennsylvania Attorney General Dave Sunday’s office secured court approval for a settlement imposing access, contracting and competition safeguards on Allegheny Health Network’s acquisition of Heritage Valley Health Systems, aiming to protect patients, doctors and health plans in western Pennsylvania.
The settlement, approved June 26 by the U.S. District Court for the Western District of Pennsylvania, follows an antitrust review by the Office of Attorney General’s Antitrust Section.
The agreement places conditions on AHN and Heritage Valley tied to hospital operations, health plan contracting, physician access and patient choice.
Under the settlement, the parties must continue providing healthcare services in Beaver and Allegheny counties and maintain Beaver Hospital and its services as long as there is sufficient demand. Sewickley Hospital must remain open for at least five years.
The agreement also bars termination of the UPMC/HVHS Cancer Center joint venture, which provides radiation oncology services, except for cause.
The settlement restricts certain contracting practices with health plans, including provisions that prohibit tiering or steering to lower-cost providers, most-favored-nation clauses, all-or-nothing contracting, limits on price transparency and fees not historically charged.
The parties must negotiate in good faith with health plans over existing and new contracts and submit to single last best offer arbitration if negotiations fail.
The agreement also requires open medical staff access, allowing qualified physicians to seek staff privileges and operating room access.
Physician referrals must be based on a patient’s medical interests and preferences, rather than financial incentives, according to the settlement terms.
The parties must honor existing employment agreements with Heritage Valley healthcare providers. For 30 days after closing, providers who choose not to remain employed must be released from restrictive covenants so they can continue practicing in the community.
The settlement also prohibits discrimination based on a patient’s method of payment and requires annual compliance reports to the Attorney General’s Office.
“When hospital systems change ownership, there is always the potential for impacts on access to care,” Sunday stated. He said the agreement is designed to ensure services remain available in the affected communities for at least the next decade.
The settlement was filed June 24 and approved two days later.
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