HEALTH

U.S. Sues Hospitals for Denying Discounts: The Justice Department filed the antitrust lawsuit against a group of New York hospitals for limiting and refusing to grant discounts to health maintenance organizations and managed-care plans. Simultaneously with filing the suit, the department announced a proposed settlement of the case. The suit, filed in Brooklyn federal court, alleges that the eight hospitals set up an organization called Classic Care Network Inc. in 1991 to act as their exclusive bargaining agents with HMOs. The hospitals account for a majority of beds in New York’s Nassau and Suffolk counties. Classic Care would deny discounts on care given to patients admitted to the hospitals and would limit discounts on outpatient services. The proposed settlement, which requires court approval, prevents Classic Care hospitals from making any further effort to prevent hospital discounts or from using Classic Care as a joint sales agent.