Recently, the antitrust division of the Department of Justice He withdrew his support. For three joint policies with the Federal Trade Commission that created antitrust zones in the health care industry.
These are a 1993 policy To integrate with security zones, price exchange and exchange of price information and participation in joint purchasing arrangements.
Also, a 1996 policy The 1993 Act clarified and expanded the safety zones and provided additional guidance for behavior that fell outside the safety zones. And finally, a 2011 policy It created a safety zone for responsible care organizations.
This move will change the landscape for antitrust enforcement and could change long-standing analyzes of healthcare industry transactions and collaborations.
Act for change
In announcing the changes, Jonathan Kanter, the antitrust division’s top official, criticized the policies as outdated in light of changes in the health care landscape and “overly permissive” on issues such as information sharing.
Cantor encouraged the industry to seek guidance from the DOJ on enforcement actions, and pledged that the agency will take a case-by-case approach to assessing competition concerns in health care.
In a speech a day before the policies were released, the division’s deputy chief Doha Maki cited changes in health care delivery models, industry consolidation and an “improved” outlook on health care economics as reasons. Maki cited the importance of health data and the use of machine learning, AI and other tools to facilitate data sharing between competitors.
Even if information is exchanged through a third-party intermediary, McKee said the anti-competitive effect could be similar to that of direct exchange with a competitor, which would increase price-fixing and friction.
Industrial influence
While the impact of the DOJ’s departure from these policies will become clear through subsequent enforcement actions, the move sends an unmistakable signal to the health care industry: Consider or reconsider transactions and other collaborations previously protected by safe zones and take special care. Any information sharing practices.
Removed policies first It was meant to do. “As completely as possible [resolve] Any counterintuitive uncertainty that prevents important mergers or partnerships that promise to lower health care costs.
The DOJ’s withdrawal from them has reintroduced uncertainty in many areas where the health care industry relied on the guidelines.
This includes financial and clinical integration through collective bargaining with managed care entities, patient data sharing among jointly owned health care providers and health plans, and the structure of Medicare ACOs and quasi-ACOs.
Integration
The repealed policies provided a safe harbor for small hospital mergers that no longer exist.
Eliminating this safe harbor is just one part of US antitrust enforcement efforts to combat consolidation in the healthcare sector. In the year In 2021 Executive order He resisted[h]Optical reinforcement [that] It has left many areas, especially rural communities, with inadequate or very expensive health care options.
And last year, the FTC There is a chair “Consolidation and monopoly problems” are widespread in the industry and the FTC is committed to being “active across the board” in dealing with them.
Additionally, revised merger guidelines are expected soon that could further change the landscape of healthcare transactions.
Accountable care organizations
The DOJ revoked the 2011 ACO policy for the Medicare Shared Savings Program, part of the 2010 Affordable Care Act.
After its passage, physicians, providers, and others came together to create new entities—ACOs—that work together to achieve improved patient experience, cost reductions, and improvements in health outcomes.
The advent of Medicare ACOs has led to the widespread creation of other types of economies that are not compatible with the Medicare program.
An area of immediate concern for ACOs is handling competitive information, such as competing providers’ compensation arrangements or other financial information relevant to the accounting of shared savings.
ACOs should reassess their ongoing needs for any data sharing and the safeguards in place to avoid any implications that the data could facilitate potential conflicts, such as pricing.
A common combination
A number of healthcare industry joint ventures may be affected by the DOJ policy termination.
For example, physician networks such as individual practice associations and physician hospital organizations rely on the 1996 policy on clinical and financial integration between health insurers and providers to set boundaries when structuring arrangements between the two.
Similarly, the 1993 policy created a safety zone for the joint purchase of high-tech or expensive equipment. Originally envisioned for expensive medical equipment such as MRIs and CT scanners, this shift could impact joint efforts to acquire and deploy technologies such as proton therapy or cyber-knife radiation.
Outlook
The recently announced and expected additional changes from the DOJ come as healthcare providers seek to create efficiencies, deliver better care and achieve cost savings.
Resolving the tension between the changed enforcement realities and industry pressures has made moving out of these safety zones even more complex. Industry participants should consider any proposed transaction, relationship or joint venture, particularly the antitrust aspects of its competitive advantages.
Leaving safety zones does not give rise to legal actions for damages. But the DOJ’s word, depending on the circumstances, could result in delays in transactions and additional costs for health care facilities.
Likewise, the DOJ’s recommendation to review its actions and statements requires thorough and timely attention to agency actions going forward. As the enforcement environment changes, so must the industry.
This article does not necessarily reflect the views of Bloomberg Industry Group, publisher of Bloomberg Law and Bloomberg Tax, or its owners.
Write for us: Author Guidelines
Author information
Susan Feigin Harris He advises hospitals, physician groups, laboratory companies, post-acute providers, telehealth and healthcare innovation companies.
Carsten Reichel He is a former federal prosecutor with experience in the Justice Department, where he prosecuted complex white-collar and economic crimes in the industrial sectors.
Gerald Stein He had a general career as an antitrust litigator and former attorney at the Federal Trade Commission’s Competition Bureau.