On February 3, 2023, the Antitrust Division of the U.S. Division of Justice (DOJ) withdrew three well being care coverage statements, which have supplied antitrust enforcement steering to numerous segments of the well being care trade for the previous few a long time. Particularly, the DOJ withdrew the (1) Division of Justice and FTC Antitrust Enforcement Coverage Statements within the Well being Care Space (September 15, 1993), (2) Statements of Antitrust Enforcement Coverage in Well being Care (August 1, 1996), and (3) Assertion of Antitrust Enforcement Coverage Concerning Accountable Care Organizations Collaborating in Medicare Shared Financial savings Program (October 20, 2011).
The 1993 and 1996 statements supplied antitrust steering for merging well being care suppliers and hospitals in an effort to alleviate antitrust uncertainty within the trade. These statements partially provided antitrust “security zones” and steering for sure well being care operations, together with
- merging hospitals,
- hospital joint ventures for top price care or excessive price gear,
- physicians’ provision of data to purchasers of well being care companies,
- hospital participation in exchanges of worth and price data,
- well being care suppliers’ joint buying preparations,
- doctor community joint ventures, and
- multi-provider networks.
Briefly, if a merger, three way partnership, or different exercise certified for a “security zone,” then the DOJ and FTC had been impossible to problem it, “absent extraordinary circumstances.” And for joint ventures, mergers, or different exercise exterior of a security zone, the statements supplied steps and components for extra evaluation. Likewise, the 2011 assertion supplied comparable security zone and non-qualifying steering for the formation and operation of Accountable Care Organizations underneath the Reasonably priced Care Act.
Merely put, the DOJ’s withdrawal terminates the “security zones” for qualifying exercise, with none alternative steering now, and even indicated for the longer term, leaving three way partnership operators and well being care suppliers in limbo. Previously “secure” mergers and joint ventures may now be topic to antitrust scrutiny. And with none formal steering to interchange the statements, it’s unclear if the statements’ non-qualifying steering nonetheless applies, because the DOJ could discover that the supplied steps of study are outdated.
Certainly, of their February 3 announcement, the DOJ acknowledged that the three statements are “overly permissive on sure topics, resembling data sharing, and now not serve their meant functions of offering encompassing steering to the general public on related well being care competitors points in at this time’s atmosphere.” The DOJ reasoned that “[w]ithdrawal due to this fact finest serves the curiosity of transparency with respect to the Antitrust Division’s enforcement coverage,” and by returning to an throughout the board case-by-case strategy, the DOJ believes will probably be capable of “higher consider mergers and conduct in well being care markets which will hurt competitors.”
In a contemporaneous February 2, 2023, speech, Deputy Principal Deputy Assistant Legal professional Basic of the DOJ Antitrust Division, Doha Mekki, supplied some further perception. She attributed the withdrawal of the well being care coverage statements to (1) an “developed” understanding of well being care economics, largely on account of the “knowledge intensive trade that depends on the facility of machine studying, synthetic intelligence, and different superior instruments,” and (2) vertical integration, for instance “insurance coverage corporations now personal suppliers, PBMs [pharmacy benefit managers], well being knowledge analytics corporations, and acute care clinics.” Deputy AAG Mekki additionally confirmed that though “[t]he Division is enterprise a evaluate of our coverage and steering paperwork,” DOJ has “no rapid plans to interchange” the withdrawn steering.
As a result of DOJ has substituted outlined classes with ambiguity, well being care suppliers should be cautious as they proceed with sure actions, together with mergers, ongoing joint ventures, and knowledge sharing. Though the DOJ’s temporary February 3 announcement was unclear as as to if it had singled out data sharing as a selected focus for its efforts, Deputy AAG Mekki’s February 2 speech positioned particular emphasis on the “change of competitively-sensitive data.”
She famous that “the construction of the trade concerned,” was not restricted to concentrated markets (“having 5 or extra contributors … is not any assure that the change is not going to hurt competitors”), and “the character of the data exchanged” stays a priority, significantly with “forward-looking, competitively-sensitive data.” Though knowledge aggregation was as soon as useful in avoiding anticompetitive sharing, “[t]he security zones had been written at a time when data was shared in manila envelopes and thru fax machines,” whereas the fashionable atmosphere shares, analyzes, and makes use of knowledge “in ways in which can be unrecognizable a long time in the past.”
Consequently, these within the well being care trade will wish to revisit their insurance policies, practices, and antitrust compliance actions to make sure that their operations wouldn’t offend latest antitrust selections or coverage indications, no matter an exercise’s prior “security” standing. And well being care suppliers ought to carry out the same evaluation for any future or pending actions, resembling mergers and joint ventures, significantly if the transacting events are extremely knowledge pushed (e.g., use pricing algorithms) or are vertically built-in.
The withdrawal of the well being care coverage statements additionally could have implications past the well being care trade, significantly as to the data sharing steering and “secure harbor,” which has been utilized broadly to data sharing in different industries. For instance, the Antitrust Steering for Human Useful resource Professionals, issued collectively by the DOJ and FTC in October 2016, particularly references the well being care coverage statements data change steering as reference to “when written surveys of wages, salaries, or advantages are much less prone to elevate antitrust issues.” The DOJ has not withdrawn or commented additional on this coverage.
The Federal Commerce Fee has not but introduced the same withdrawal; nevertheless, given the FTC’s and DOJ’s earlier joint help of the three coverage statements, it might not be shocking if the FTC points a comparable assertion.
Ed Harvey and Nicole Williams and Tom Groeller are attorneys in Thompson Coburn’s Antitrust observe group.
