Antitrust

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On March 24, 2020, the Department of Justice (DOJ) and Federal Trade Commission (FTC) issued a joint statement on COVID-19-related antitrust enforcement highlighting ways “firms, including competitors, can engage in procompetitive collaboration that does not violate the antitrust laws” to protect public health and safety. The DOJ and FTC emphasized their commitment to facilitating antitrust compliance for businesses that are responding to the national emergency. In furtherance of this position, the agencies gave examples of collaborative activities designed to improve health and safety during the COVID-19 pandemic that are unlikely to run afoul of the antitrust laws, absent exceptions. These include:

  • Collaboration on research and development as “efficiency-enhancing integration of economic activity” which is typically procompetitive.
  • Sharing technical know-how – rather than company specific data about prices, wages, outputs, or costs – as necessary to achieve procompetitive benefits of collaboration.
  • The “development of suggested practice parameters – standards for patient management developed to assist providers in clinical decisionmaking” by providers will not be challenged except in extraordinary circumstances.
  • Joint purchasing arrangements among health care providers “designed to increase the efficiency of procurement and reduce transaction costs.”
  • “[P]rivate lobbying addressed to the use of federal emergency authority, including private industry meetings with the federal government to discuss strategies on responding to COVID-19, insofar as those activities comprise mere solicitation of governmental action with respect to the passage and enforcement of laws.”

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Continue Reading DOJ and FTC Issue Joint Statement on Antitrust Enforcement and the COVID-19 Pandemic

On March 20, the Connecticut Office of Health Strategy (OHS) issued new guidance (Guidance) on the process for requesting a certificate of need (CON) waiver for projects related to the COVID-19 response. See our analysis of the initial OHS guidance on CON waivers here.…
Continue Reading OHS Streamlines Application Process for CON Waivers to Respond to COVID-19

On February 27, 2020, the Federal Trade Commission (FTC) announced an action to block a proposed transaction between Thomas Jefferson University d/b/a Jefferson Health (Jefferson) and Albert Einstein Healthcare Network (Einstein). Jefferson and Einstein entered into a “System Integration Agreement” in late 2018 under which Jefferson would become the sole member (i.e., owner) of Einstein and oversee a 14-hospital system (11 of which would be located in Pennsylvania). According to the FTC, Jefferson and Einstein are leading providers of inpatient general acute care (GAC) hospital services and inpatient acute rehabilitation services in Philadelphia County and Montgomery County, Pennsylvania, and therefore the FTC now challenges the proposed integration on the basis that it will substantially harm competition for those services in both Philadelphia and Montgomery counties.…
Continue Reading FTC and Commonwealth of Pennsylvania Challenge Proposed Hospital Merger

On June 13, 2019, the U.S. Court of Appeals for the Eighth Circuit affirmed a preliminary injunction granted to the Federal Trade Commission (FTC) and North Dakota Attorney General (NDAG) blocking the proposed acquisition of Mid-Dakota Clinic, P.C. (MDC) – a multispecialty physician group in North Dakota – by Sanford Health, a large South Dakota-based health system (Sanford). This decision may foreclose continued pursuit of MDC by Sanford, and represents another success for the FTC in challenging health care consolidation (see our previous analysis of the granting of the injunction here, and of the FTC’s intervention here).…
Continue Reading Eighth Circuit Affirms Preliminary Injunction Blocking Physician Practice Acquisition in North Dakota

On May 14, 2018, Connecticut Governor Dannel P. Malloy signed into law Public Act No. 18-91 “An Act Concerning the Office of Health Strategy” (PA 18-91), a bill that operationalizes the Office of Health Strategy (OHS), a new health oversight agency in Connecticut. OHS is a division of the Department of Public Health (DPH) “for administrative purposes only” that was provisionally established by the Connecticut General Assembly within the budget implementer bill passed in a special session in late 2017 and accorded responsibility for developing and implementing a health care vision for Connecticut, among other things. PA 18-91 operationalizes OHS by assigning responsibility for administration of Connecticut’s certificate of need (CON) process to a newly created unit within OHS that succeeds the Office of Health Care Access (OHCA), as well as by clarifying and increasing OHS’s statutory health oversight duties.

PA 18-91 took effect from passage on May 14, 2018, except as noted below.…
Continue Reading Connecticut Legislature Operationalizes New Health Oversight Agency: The Office of Health Strategy

On June 22, 2017 the Federal Trade Commission (FTC) filed an administrative complaint and a request for a preliminary injunction in federal court to block a proposed physician practice acquisition in North Dakota (the Transaction), the agency’s latest intervention in opposition to consolidation at the physician practice level. In this case, the FTC (accompanied by the Attorney General of North Dakota) opposes a proposed acquisition of Mid Dakota Clinic, P.C. (MDC) by Sanford Bismarck (a subsidiary of multi-state health system Sanford Health, collectively Sanford) on the grounds that the Transaction, if consummated, would represent an unfair method of competition in violation of Section 5 of the FTC Act (15 U.S.C. § 45) and may substantially lessen competition in violation of Section 7 of the Clayton Act (15 U.S.C. § 18).…
Continue Reading FTC Intervenes in Physician Practice Acquisition in North Dakota

On May 12, 2017, Anthem Inc. announced that it had terminated its merger agreement with Cigna Corporation, a deal that would have united the second and third largest sellers of health insurance to large companies in the country. Anthem’s termination of the merger came two weeks to the day after the U.S. Court of Appeals for the D.C. Circuit rejected Anthem’s appeal of an injunction blocking the merger issued by a U.S. District Court earlier this year. Anthem terminated the merger one week after filing a petition for a writ of certiorari with the U.S. Supreme Court that sought guidance on the viability of the “efficiencies defense” under antitrust law.

Anthem and Cigna initially entered into a merger agreement in July, 2015 that was subsequently challenged on antitrust grounds by the Department of Justice, eleven states, and the District of Columbia. The government alleged that the merger would violate Section 7 of the Clayton Act (15 U.S.C. §18) by substantially lessening competition in the insurance markets for (i) national accounts (i.e., insurance purchased by employers with 5000+ employees), and (ii) large group employers (those with 50+ employees) in various geographic areas throughout the country.…
Continue Reading Anthem Terminates Cigna Merger Following D.C. Circuit Setback

On March 30, 2017, the U.S. District Court for the Western District of North Carolina rejected a motion for judgment on the pleadings (akin to a motion to dismiss) by Carolinas HealthCare System (CHS) in a novel health care antitrust suit brought by the Department of Justice (DOJ) and State of North Carolina (collectively, the Government).

The Government filed suit against CHS, a health system consisting of 10 hospitals in and around Charlotte, North Carolina, in June 2016, alleging that contractual provisions mandated by CHS in its contracts with health insurers that sought to prevent insurers from establishing narrow networks or otherwise incentivizing insureds to see lower cost providers than CHS violated federal antitrust law. Specifically, the Government alleges that CHS’s contractual restrictions on “steering” by insurers—that is, not contractual provisions requiring that insureds be steered to CHS but rather contractual provisions that prevented insurers from steering insureds away from CHS—constitute unreasonable restraints on trade in violation of the Sherman Act. In its complaint, the Government describes “steering” as a competitive behavior that may refer to the insurer practice of offering tiered provider networks (with copayments varying by provider tier) as well as narrow-network plans (offering lower prices to insureds in exchange for a more limited provider panel).

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Continue Reading Court Rejects Health Care System’s Efforts to Dismiss Government’s Anti-Steering Managed Care Antitrust Case