New York-Presbyterian Hospital Ruling Signals Widening Antitrust Exposure for Hospital Contracting Practices

On October 1, 2026, Judge Brian M. Cogan of the U.S. District Court for the Eastern District of New York denied NYP’s motion to dismiss a consolidated antitrust complaint brought by three self-funded union health plans. The ruling is significant for two reasons. First, it demonstrates that plaintiffs can successfully allege market power against hospital systems even in the absence of traditionally high market shares. Second, the court’s reasoning closely tracks the arguments advanced by the DOJ in its Statement of Interest filed in the case: that market power need not be established through market share alone and can be shown through direct evidence such as supracompetitive pricing, and that exclusionary conduct and rival foreclosure are not required elements of a Section 1 claim. The recent decision validates the government’s legal theories and could enhance the viability of the DOJ’s parallel action against NYP, which is currently proceeding in the Southern District of New York.

Background

In a consolidated class action complaint filed on June 5, 2026, the plaintiffs alleged that NYP leverages its market power to impose contractual restraints that block payors from employing cost-effective plan design tools, in violation of the Sherman Act, 15 U.S.C. § 1, and the Donnelly Act, N.Y. Gen. Bus. Law § 340.

Specifically, plaintiffs allege that NYP—the largest hospital system in New York City by net revenue, inpatient days, and certified beds, and a system with perceived prestige and dominant positions in critical service lines—leverages its market power to impose contractual restrictions on network vendors (i.e., insurance companies assembling provider networks), which in turn restrain payors’ ability to employ cost-effective plan designs such as narrow networks, tiered networks, steering, and price transparency tools. The challenged contractual provisions include:

• An all-products provision: requiring any network vendor that includes any NYP provider or facility in any of its networks to include all NYP providers and facilities in all networks, at the highest tier or benefit level, irrespective of cost or quality;
• A single negotiated rate provision: requiring network vendors to accept the rate NYP charges at its most expensive flagship hospitals when members obtain care at any NYP hospital, irrespective of location, proximity to competitors, quality, or ratings; and
• Gag clauses: prohibiting network vendors and payors from disclosing NYP’s pricing terms to members, and further preventing network vendors from informing payors why contracts are terminated if payors engage in steering.

On June 22, 2026, NYP filed a pre-motion letter that the court deemed to constitute NYP’s motion to dismiss. NYP argued that the plaintiffs failed to allege market power, as a 25–30% market share is insufficient in a vertical non-price case governed by the rule of reason and that the union health plans failed to allege rival foreclosure, as no competing hospital was alleged to have exited the market or been denied scale economies, among other claims.

The Court’s Decision Closely Tracks the DOJ’s Statement of Interest

Market Definition and Market Power: A Permissive Pleading Standard

The court accepted plaintiffs’ proposed market definitions (the same alleged by DOJ): a product market of inpatient general acute care (“GAC”) hospital services, and two geographic markets—Manhattan alone and a four-borough market (Manhattan, Brooklyn, Queens, and the Bronx). The court found these definitions plausible under a “relatively permissive pleading standard,” noting that inpatient GAC services have been widely accepted as a product market and that patients generally seek hospital care near where they live and work.

On market power, the court found NYP’s alleged 25–30% market share “obviously substantial,” particularly given high barriers to entry in the hospital market—a notable departure from the 50% threshold traditionally associated with market dominance in antitrust cases. The court emphasized that market share is “only a way of estimating market power” and is “not a prerequisite for bringing a Sherman Act § 1 claim,” pointing to plaintiffs’ additional allegations of supracompetitive profits and NYP’s “must-have” nature for insurance networks.

Exclusionary Conduct and Rival Foreclosure: No Pleading Requirement

NYP also argued that its contract provisions are “inclusionary,” resulting in “an open network that maximizes patient choice.” The court rejected this framing, holding that while “preventing competitors from being excluded or foreclosed from the market is one goal of the antitrust laws,” it is “surely not the only goal.” The court found “no requirement that plaintiffs plead exclusionary conduct or rival foreclosure to state a Sherman Act § 1 claim.” Here too, the court’s holding tracked DOJ’s Statement of Interest, which argued that exclusionary conduct and rival foreclosure are not required elements of a Section 1 claim, and that while such factors “may be indicia of an actual adverse effect on competition, they are not the only indicia”; increased prices alone can suffice.

The court further noted that, even under NYP’s own framework, plaintiffs had adequately alleged competitive harm: NYP’s competitors are effectively foreclosed from competing for preferred network status because they cannot be placed in a higher tier than NYP regardless of price or quality. Citing Second Circuit precedent, the court held that rivals need not be barred “from all means of distribution.” Being barred from “cost-efficient ones” is enough.

Broader Context and Implication for Hospitals and Providers

The Eastern District of New York’s decision is part of a broader enforcement trend. As we reported earlier this year, on February 20, 2026, the DOJ and Ohio Attorney General sued OhioHealth Corporation, alleging that OhioHealth leveraged its dominant position in the Columbus, Ohio market to impose contractual restrictions on commercial health insurers that blocked them from designing budget-conscious lower-cost health plans. On June 16, 2026, the parties filed a proposed consent decree that would void existing restrictive provisions, prohibit OhioHealth from seeking such provisions in future contracts, and install a court-appointed compliance monitor for five years.

The OhioHealth resolution in conjunction with the White House Council of Economic Advisers’ June 2026 memorandum, finding that a nationwide ban on anticompetitive hospital contracting could reduce hospital prices by approximately 18% (yielding roughly $45 billion in annual employer-sponsored insurance premium savings), and DOJ’s enforcement action against NYP all indicate that the Trump administration is focused on the role of hospital contracting on prices. Judge Cogan’s ruling now confirms that these enforcement theories are viable bases for future antitrust actions—effectively expanding the universe of hospital systems that may face antitrust scrutiny from both government enforcers and private plaintiffs.

The court’s reasoning validates the core legal theories underlying the DOJ’s enforcement campaign against hospital contracting practices. Hospital systems that employ all-products provisions, anti-tiering or anti-steering terms, single negotiated rate structures, or gag clauses should anticipate that the DOJ may pursue litigation against a broader range of hospital systems—not limited to those with dominant market shares—particularly where the government can point to additional indicia of market power beyond market share alone.

If you have questions about how this decision may affect your organization, Crowell & Moring’s Antitrust and Health Care practice groups are available to help.

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¹ UFCW Local 1500 Welfare Fund v. The New York and Presbyterian Hosp., No. 2:25-cv-05023 (E.D.N.Y.); Cement and Concrete Workers DC Benefit Fund v. The New York and Presbyterian Hosp., No. 1:25-cv-05571 (E.D.N.Y.).

² U.S. v. The New York and Presbyterian Hosp., No. 1:26-cv-02480 (S.D.N.Y.).