On December 9, 2022, the U.S. Department of Justice, Antitrust Division and the U.S. Department of Health and Human Services, Office of the Inspector General (OIG) (collectively, the Agencies) formalized their long-standing partnership to fight anti-competitive conduct in healthcare markets by signing a memorandum of understanding (the MOU) to enhance cross-agency collaboration. Although the Agencies have conducted parallel investigations in the past, the timing of the MOU indicates that health care industries will receive increased scrutiny from both in 2023. Companies can proactively mitigate this risk with thorough compliance training that explains what constitutes misconduct and the grave civil and criminal penalties that can ensue.
- Background: President Biden’s Executive Order on Promoting Competition
On July 9, 2021, President Biden issued the Executive Order on Promoting Competition in the American Economy, which outlined his antitrust law agenda and enforcement priorities. This Executive Order encouraged federal agencies to adopt a “whole-of government approach.” President Biden specifically called upon the Department of Health and Human Services to combat excessive pricing in health care markets and to work with the Antitrust Division when there is overlapping jurisdiction.
- Agency Collaboration Pursuant to the MOU
Consistent with the Executive Order, the stated purpose of the MOU is “to enhance and maximize the enforcement of the federal laws administered and enforced by the two agencies.” In furtherance of this goal, the MOU establishes formal channels of communication and best practices for joint investigations. Key provisions include:
- Agency Liaisons. The Agencies agree to designate liaisons who will act as conduits for intra-agency requests. The liaisons will meet quarterly to discuss potential and active investigations, policies, and enforcement trends. The liaisons may also recommend amendments to the MOU that further improve communication and information sharing.
- Training and Referrals. Each agency will train staff to identify cases that should be referred to the other agency. If OIG detects a potential antitrust violation during its investigation, the case will be referred to the Antitrust Division. Similarly, the Antitrust Division will notify OIG if there is evidence of fraud or other misconduct subject to OIG’s exclusion authority. However, each agency retains the autonomy to decide whether there is enough evidence to warrant further inquiry.
- Agency Coordination. The Agencies will implement procedures to ensure they coordinate at every stage of an investigation, particularly with criminal antitrust investigations. If the Antitrust Division enters a plea agreement or other settlement that implicates OIG’s exclusion authority, the Agencies will work together and balance the importance of maintaining a competitive marketplace and the impact of company divestitures or dissolution.
- Sharing Non-Public Information. The Agencies agree to share confidential non-public information in furtherance of their respective investigations and to establish appropriate safeguards to ensure that the information is disseminated on a “need to know” basis.
- Why the MOU Matters
Since 2021, the Biden administration has committed to restoring competition in U.S. markets with increased antitrust enforcement, specifically in industries such as health care, in which pricing directly affects the well-being of U.S. consumers. The MOU strengthens the robust intra-agency partnership between the Agencies by designating official points of contact and streamlining the process for sharing information. Companies can proactively mitigate this risk of federal investigations with thorough compliance training.