Hall Render’s Antitrust and Competition Group, including William Berlin, Michael Greer, John Bowen and Abby Kaericher, authored a chapter, titled “Health Care Antitrust Developments,” in Health Law and Compliance Update (2019 Edition) published by Wolters Kluwer. This is the fourth year that members of the Antitrust Group have authored this chapter, and the group is currently writing another chapter for the 2020 edition. The chapter addresses a variety of antitrust compliance concerns and recent developments, as well as practical takeaways and compliance best practices to provide guidance for providers and other health care entities. The chapter assists providers in navigating merger enforcement by the Federal Trade Commission (“FTC”), the U.S. Department of Justice (“DOJ”) and state Attorneys General, as well as managing the antitrust risk from contracting and agreements with payers and other providers. A copy of the chapter can be found here, and copies of Health Law and Compliance Update 2019 Edition can be purchased here. Highlights of the chapter include:
- The Federal Trade Commission (“FTC”), the United States Department of Justice (“DOJ”) and state Attorneys General (“state AGs”) (collectively, the agencies) continue their string of successful challenges to health plan, hospital and physician practice mergers. The decisions in the recent cases represent an endorsement by the courts of the FTC’s analytical approach to merger antitrust enforcement. Health systems should be mindful that even small, non-reportable transactions under the Hart-Scott-Rodino Act may trigger a challenge from either the FTC or state AGs. And state AGs can and do independently challenge transactions they consider anticompetitive with or without support from the FTC. When considering mergers with competitors, antitrust analysis should be performed early in the transaction process to assess potential risk.
- The DOJ and FTC also have increased their scrutiny of market allocation agreements, wage fixing and no-poaching agreements between competing health care providers. While “gentleman’s agreements” with another health care provider to not compete in each other’s service areas or for employees may seem widespread and harmless, they are, however, unlawful under the antitrust laws and potentially subject to the most severe antitrust penalties – criminal liability and substantial fines. In addition, the DOJ is focused on and challenging provider anti-steering and related exclusive contracting provisions, which are relatively common in agreements between health plans and hospitals. Given this new focus in DOJ antitrust enforcement, providers should be cautious about negotiating steering and other exclusionary provisions in their managed care agreements.
- The past three years also witnessed several court decisions resolving private litigation involving significant issues for health systems. In the joint venture area, providers cannot assume that all joint ventures and joint operating agreements will confer single entity status that permits joint conduct such as contracting; instead, it is important to work with antitrust counsel to properly structure the JV or JOA. Similarly, exclusive contracting, while common and legal, is not without antitrust risk depending on the specific facts and circumstances. As payers create more narrow network products and providers seek to use exclusivity to drive volume, providers must exercise caution when negotiating payer contracts.
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