31737999_HC Webinar Series_Antitrust_Presentation_05132015
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This document summarizes a webinar on recent developments in health care antitrust law. It discusses the Department of Justice and Federal Trade Commission's continued strong enforcement of mergers and monopolization cases. Recent challenges have involved health insurance mergers, as well as "problematic contracting practices" between payors and providers. The webinar also addressed antitrust issues involving provider collaborations and networks, noting the need for real integration and clinical justification rather than empty claims or "united front" price fixing. Recent court cases involving hospital mergers were also summarized.
31737999_HC Webinar Series_Antitrust_Presentation_05132015
- 1. Health Care Antitrust Update: Accountable, Coordinated, and Reformed, So What’s New? Health Care Industry Emerging Legal Issues Webinar Series Arthur Lerner Katherine Funk May 13, 2015 The webinar will begin shortly, please stand by. The materials and a recording will be sent to you after the event.
- 2. Agenda • U.S. Agency Update • Recent Challenges to Provider Combinations • Problematic Contract Language • Provider Collaboration Initiatives • Recent Challenges to Provider Combinations 2Health Care Antitrust Update
- 3. DOJ/FTC Update • Continued strong merger enforcement – DOJ challenged twice as many mergers in 2014 vs 2013 – Nonreportable and consummated deals under scrutiny • Focus on monopolization continues – Several cases outside of healthcare space (AMEX, McWane) – Several investigations ongoing in healthcare space • Takeaway: DOJ and FTC actively looking for cases, ready and willing to litigate 3Health Care Antitrust Update
- 4. • DOJ monitors the health insurance business closely: – Aetna/Coventry (approved with divestitures) – Humana/Arcadian (approved with divestitures) • Key Issues: – Geographic market share – Product market definition (large vs. small group) – Ultimate impact of new health care exchanges 4 Recent Payor Challenges Health Care Antitrust Update
- 5. Problematic Contracting Practices Recent cases and guidance go beyond mergers, address conduct that could raise serious anticompetitive concerns: • Use of ‘‘anti-steering,’’ ‘‘anti-tiering,’’ ‘‘guaranteed inclusion,’’ ‘‘most-favored-nation,’’ or similar clauses to discourage payors from directing or incentivizing patients to choose certain providers • Certain tying, expressly or via pricing policies, of services to a payor's purchase of other services • Contracting on an exclusive basis with providers • Restricting a payor's ability to make cost, quality, efficiency, and performance information available to enrollees Department of Justice and Federal Trade Commission Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program, 76 Fed. Reg. 67,026 (Oct. 28, 2011). http://www.gpo.gov/fdsys/pkg/FR-2011-10-28/pdf/2011-27944.pdf 5Health Care Antitrust Update
- 6. Case Law • Cascade Health Solutions v. PeaceHealth, 515 F.3d 883 (9th Cir. 2008) • United States v. United Regional Health System, Civ. A. No. 7:11-cv-00030 (N. D. Tex. 2011); see also Methodist Health Svcs. Corp v. OFS Healthcare System, d/b/a Saint Francis Med. Ctr., No. 1:13-cv-01054 (C.D. Ill. Mar. 25, 2015) • UFCW & Employer Benefit Trust v. Sutter Health, CGC 14- 538451 (Sup. Ct. SF, Cal. April 14, 2014) • United States and State of Michigan v. Blue Cross Blue Shield of Michigan, Case no. 2:10-cv-12155 (E.D. Mich. 2010) 6Health Care Antitrust Update
- 7. Key Takeaway Where one of the contracting parties has “market power” and demands inclusion of potentially anticompetitive language into an agreement, antitrust liability can go in both directions if the arrangement is deemed an agreement in restraint of trade. 7Health Care Antitrust Update
- 8. Provider Collaborations and Networks Agreements on price: “Per Se” or “Rule of Reason”? • Is there real integration that provides efficiencies - clinical, financial or otherwise? • Is joint price setting needed to make the initiative work? • Will the venture block competition or cause competitive harms that outweigh benefits -- too much market power? • Exclusivity commitments by providers that create a bottleneck or united front? 8Health Care Antitrust Update
- 9. Key Takeaways • Even where there is clinical or financial integration, an antitrust violation can still occur if the combined enterprise will be able to wield market power via exclusivity with providers and, in some instances, over-inclusiveness. • Some providers may be tempted to employ health reform lingo to try out familiar “united front” managed care contracting strategies, but with only lip service to real integration, or its deferral to a later date. The enforcement agencies will pierce the rhetoric, where integration claims are empty, to challenge price fixing activities. • The antitrust agencies are not likely to press to the limit where there is some real effort toward legitimate quality improvement and clinical integration and no “market power” problem. • Where there is real integration, but there might also be a market power problem, agencies sometimes have to make a tough call. Cf. North Texas Speciality Physicians v. FTC, No. 06-60023 (5th Cir. 2008); Southwest Health Alliances, dba BSA Provider Network (FTC complaint/consent agreement (May 10, 2011) 9Health Care Antitrust Update
- 10. Recent Challenges to Provider Combinations • Saint Alphonsus Medical Center-Nampa Inc. et al. v. St. Luke’s Health System, No. 14-35173 (9th Cir. Feb. 10, 2015.) • Commonwealth of Massachusetts v. Partners Healthcare System, Civ. A. No. 4-2033-BLS2 (Sup’t Ct. June 24, 2014) (complaint for injunctive relief and joint motion for entry of final judgment by consent) • FTC and State of Ohio v. ProMedica Health System, Civ. A. No. 3:11CV0047 (N.D. Ohio Jan. 7, 2011); Pro Medica Health System v. FTC No. 12-3583 (6th Cir. April 22, 2014) • OSF/Rockford – complaint filed 2011; district court opinion granted Preliminary Injunction 2012 • In re Reading Health System, FTC Dkt. 9353 (Nov. 16, 2012) (administrative complaint) (Deal abandoned) • In re Omnicare, FTC Dkt. 9352 (Jan. 27, 2012) (Deal abandoned) 10Health Care Antitrust Update
- 11. NC Dental Board Ramifications • The US Supreme Court's decision in the North Carolina dental board case, which limited states' power to immunize antitrust conduct, could have important ramifications for the healthcare industry beyond professional licensing boards. – State action immunity comes up frequently in health care context • Public Hospitals • Hospital Districts • State efforts to immunize certain conduct • Licensing boards and other state-based credentialing 11
- 12. Arthur Lerner 202.624.2820 alerner@crowell.com Katherine Funk 202.624.2845 kfunk@crowell.com Speakers – Contact Information 12 Health Care Industry Emerging Legal Issues Webinar Series • Advertising and Marketing Issues in the Health Care Industry: July 23 - Chris Cole, David Ervin • Privacy & Cybersecurity: Evolving Risks and Liability Trends: September 29 – Robin Campbell, Elliot Golding • How to Survive a Subpoena/CID: November 17 - John Brennan, David O'Brien