Antitrust Concerns Greatly Affect Healthcare ReformSeptember 29, 2021
For there to be a violation of Section 1, there must be an agreement and it must unreasonably restrain competition. For there to be an agreement, there must be more than one economic unit involved. That is, there can be no such agreement by one economic unit with itself. For example, generally speaking, shareholders in the same corporation are, for antitrust purposes, legally incapable of reformas cocinas valencia engaging in illegal concerted action together if they share substantial economic risk. They are generally considered to be part of a single economic unit. Conversely, members of two or more competing economic units, separate professional corporations, for example, may not agree to a whole host of things, because such agreements would violate one or more antitrust laws.
Some agreements are considered to be so egregious that they need not even restrain competition. The mere fact that such an agreement has occurred is enough, and there is no defense. Some of these per se violations of the antitrust laws include: agreement among two or more independent physicians to charge a particular amount for a particular service (Aprice [email protected]); agreement among two or more independent physicians not to contract with a particular HMO ([email protected]; agreement among two or more independent physicians regarding their hours of operation, the services they will offer, or the geographic areas they will serve (market allocation). This is by no means a complete list or a complete description of the antitrust laws, but describes some types of activities that will violate antitrust laws.
Case #1: A payer approaches you and several of your colleagues, who are competitors. The payer gives you a contract and fee schedule, which you review with your colleagues. Though the payer recognizes that you are not a physician group practice, it would like to deal with just one of you for contracting purposes. You choose one of you to represent the group of you, and seek changes in the contract, including the fee schedule.
Impression: The Sherman Act has been violated. Since you and your colleagues are competitors and are not members of a single professional corporation through which you conduct all or substantially all of your professional practices, you may not discuss fees among yourselves, and you may not appoint someone to act as the voice of the group. In addition to the price fixing described above, if you decided together not to contract with the payer, you would have engaged in a group boycott.
The violations can be avoided by properly structuring a formal group and adhering to certain rules in negotiating with payers. In scrutinizing activities of a physician organization, one of the key things antitrust enforcement authorities will examine is the degree of the organizations economic integration, the degree to which economic risk is shared among the shareholders. The level of integration is key in determining whether the organization is a single economic unit or whether it is comprised of two or more economic units.
Determining whether a physician organization is sufficiently integrated is often, however, an extremely difficult task. The law changes and is very fact-specific. The FTC looks to such things as: 1) whether the organization is capitated; 2) the extent services are centralized in the organization; and 3) accountability of the shareholders to the organization through such things as utilization management, quality assurance and peer review.
A Good Trend
Healthcare reform is causing the Department of Justice and other regulators to do two nearly unprecedented things in the history of anti-trust law: innovate and cooperate. I’m exaggerating, but the truth is that healthcare reform has lit a huge fire under the…ummm…butt of government regulators to find ways to facilitate competing healthcare providers to “come together” for the sake of reducing cost and improving quality.
Several years ago, the Department of Justice has lightened its almost unworkable antitrust restrictions by: (1) expanding the rule of [email protected] analysis for determining whether the antitrust laws have been breached, (2) expanding the notion of shared financial risk beyond mere capitation; and (3) expanding the role of the messenger. Though the role of so called Messenger Model organizations (e.g. IPAs) provide to be a failure, the fact that the DOJ would consider other ways of creating “substantial economic risk” was shocking. And now, what is even more shocking is that the DOJ recently: (1) promised to view all ACO proposals essentially more leniently, and (2) agreed in a joint statement with the HHS Office of Inspector General (which has primary enforcement authority on such things as Stark and Anti Kickback violations) to cooperate with eachother to facilitate the development and roll out of ACOs.