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Summary:
Over the past few decades, antitrust enforcement has become increasingly prevalent in the healthcare industry. With rising healthcare costs, consolidation among hospitals and insurance providers, and increased scrutiny from regulators, healthcare antitrust has never been more relevant for attorneys and industry stakeholders. In this article, we’ll break down some of the key antitrust issues in healthcare and how counsel can navigate this complex area of law.
A major antitrust issue in healthcare involves mergers and acquisitions of hospitals, insurers, and other healthcare entities. The Federal Trade Commission (FTC) and Department of Justice (DOJ) closely review proposed M&A deals for potential harm to competition and consumers.
In recent years, regulators have challenged mergers involving large health systems and insurers. For example, in 2021, the FTC moved to block a merger between Hackensack Meridian Health and Englewood Healthcare Foundation, two competing providers in New Jersey. The FTC argued the deal would substantially lessen competition in Bergen County.
When reviewing mergers, regulators consider factors like market concentration, barriers to entry, and effects on pricing and quality. Counsel should analyze these issues when advising on M&A deals. Structuring transactions to avoid monopolization or excessive consolidation of markets is key. In some cases, divestitures or other remedies may be needed to obtain regulatory approval.
Beyond mergers, healthcare entities can also face allegations of anticompetitive conduct that violates antitrust laws. Some common issues include:
Counsel should be mindful of these risks when advising healthcare clients on contracting, pricing, and other strategic matters. Robust antitrust compliance policies are a must for companies in this space.
In the insurance sphere, consolidation among national payers has attracted scrutiny from regulators concerned about the effects on premiums and product availability. Anthem’s proposed merger with Cigna in 2017 was blocked based on findings that it would severely reduce competition. Counsel must carefully evaluate antitrust risks when advising on health insurer mergers.
Accountable care organizations (ACOs) formed under the Affordable Care Act have also faced antitrust challenges. ACOs that include rival providers merging clinical operations and sharing pricing and other data could potentially be viewed as anticompetitive collusion. Nuanced antitrust analysis is required to build ACOs that generate efficiencies while avoiding illegal conduct.
At the federal level, both the FTC and DOJ enforce antitrust laws in healthcare. The FTC focuses on insurance, pharmaceuticals, and consumer protection issues. The politically appointed DOJ tends to handle mergers and conduct matters. At the state level, attorneys general are increasingly active on healthcare antitrust.
Counsel must understand the procedures and jurisdictional lines between these agencies. For example, the premerger notification requirements under the Hart–Scott–Rodino (HSR) Act. HSR reporting is vital for large transactions.
Healthcare antitrust issues are complex. But resources like the FTC/DOJ Statements of Antitrust Enforcement Policy provide guidance on mergers, ACOs, and other areas. Counsel should refer to these guidelines and stay on top of agency actions. For example, FTC statements on recent enforcement matters and closing letters explaining why the agency did not challenge certain conduct.
So what is the role of antitrust counsel in this landscape? Key responsibilities include:
Antitrust analysis requires a nuanced understanding of economics and healthcare regulatory schemes. Counsel adept in these areas provide valuable guidance.
For attorneys researching healthcare antitrust matters, resources like Lexis+ and Lexis+ AI offer essential insights. Both platforms provide access to comprehensive antitrust case law and analytical content in Practical Guidance to assist with legal analysis.
Key features include:
With healthcare antitrust only growing in complexity, having legal platforms like Lexis+ or Lexis+ AI enables counsel to provide sound legal advice rooted in precedent and the latest trends. Combining substantive analysis with pragmatic guidance, attorneys can empower clients to make smart antitrust decisions and avoid missteps. If you handle healthcare antitrust matters, be sure to leverage the robust offerings available through LexisNexis to tackle this murky area.
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