United States: No Mandatory Antitrust Review For ACOs

Last Updated: November 18 2011
Article by David R. Garcia and Helen C. Eckert

The Department of Justice and Federal Trade Commission recently issued their final "Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program" pursuant to the 2010 Patient Protection and Affordable Care Act. The final statement was issued in conjunction with the Department of Health and Human Services' Centers for Medicare and Medicaid Services' final regulations implementing the shared savings program as part of a coordinated interagency effort to facilitate health care provider participation in the shared savings program, so as to achieve the cost savings and improvement in quality of care Congress intended. Both the final statement and CMS' final regulations aim to further encourage and incentivize formation of Accountable Care Organizations and participation in the shared savings program. As such, the final statement includes significant, material changes from the proposed statement of antitrust enforcement policy with respect to ACOs issued earlier this year. (See the April 15 article on the proposed statement.)

ACOs are, in essence, collaborations of independent health care providers and/or provider groups (including physician practice groups, hospitals, physician-hospital organizations and any other provider groups that CMS deems appropriate) centered around the concept of enhanced coordination of care to improve both the quality and cost of care. ACOs are to be accountable for the overall care of a defined population of Medicare beneficiaries, and upon meeting certain performance standards set by CMS, are awarded some portion of savings realized (in addition to traditional fee-for-service payments).

As explained in the final statement, the agencies recognize that health care providers are more likely to create ACOs that serve both Medicare beneficiaries and privately insured patients, and thus present an opportunity for health care providers to achieve for many other consumers the benefits Congress intended for Medicare beneficiaries through the shared savings program. To further this goal, the final statement aims to clarify antitrust enforcement policy regarding ACOs, including whether ACOs that meet CMS' eligibility criteria may nevertheless be subject to antitrust scrutiny.

The agencies explain that while they continue to refrain from delineating specific requirements of clinical integration, they do recognize that CMS' eligibility criteria -- including a management structure that comprises clinical and administrative processes, and processes to promote evidence-based medicine and patient engagement -- are broadly consistent with the agencies' prior statements regarding clinical integration. The agencies also make clear that joint negotiations with private payers will be deemed reasonably necessary to an ACO's purpose of improving health care, and ACOs utilizing the same structure and processes used in the shared savings program to serve privately insured patients will accordingly be afforded rule of reason treatment.

As for the significant changes from the proposed statement, first and most significant, the final statement eliminates the mandatory antitrust review that had previously been a prerequisite for entry into the shared savings program. Mandatory antitrust review had initially been contemplated for all ACOs whose share for any common service that two or more independent ACO participants provided to patients in the same PSA exceeded 50 percent. The Final Statement does away with this mandatory review in favor of a voluntary, expedited (90 day) antitrust review process for any "newly formed ACOs" that may desire further antitrust guidance. The new voluntary process will examine "whether the ACO will likely harm competition by raising the ACO's ability or incentive profitably to raise prices above competitive levels or reduce output, quality, service, or innovation below what likely would prevail in the absence of the ACO." The reviewing agency may also consider other factors appropriate in the rule of reason analysis as explained in the 1996 Statements of Antitrust Enforcement Policy in Health Care and the 2000 Antitrust Guidelines for Collaborations Among Competitors.

An FTC/DOJ ACO Working Group will be established to collaborate and discuss issues arising out of the ACO reviews to ensure efficient, cooperative and expeditious reviews. The policy statement also reaffirms the agencies' commitment to protecting competition in the health care markets, explaining the agencies' intent to monitor data and other information from CMS to assess the competitive effects of ACOs and guide future enforcement policies.

Second, the final statement -- with the exception of the voluntary expedited antitrust review discussed above -- applies to all collaborations among otherwise independent providers and provider groups that are eligible and intend, or have been approved, to participate in the shared savings program. The applicability of the final statement is not limited to only those collaborations formed after March 23, 2010 (the date on which PPACA was enacted), as was contemplated by the proposed statement.

The final statement is otherwise largely consistent with the guidelines set forth in the proposed statement. Notably, the antitrust "safety zone" for ACOs, whose independent participants provide a "common service" and have a combined share of 30 percent or less of each such common service in each participant's PSA, remains the same in the final statement, wherever two or more ACO participants provide that service to patients from that PSA. The "rural exception" and the "dominant provider limitations" from the proposed statement also remain intact.

The final statement also includes a list of specific types of conduct which, under certain circumstances, may raise competitive concerns and should be avoided. It makes clear that all ACO participants should avoid improper exchanges of price or other competitively sensitive information among competing participants, which may facilitate collusion in the provision of services outside the ACO. The agencies also identified the following four types of conduct which ACOs with high PSA shares (or other indicia of market power) should avoid:

  1. Discouraging private payers from directing or incentivizing patients to choose certain providers.
  2. Tying sales of the ACO's services to the private payer's purchase of other services from providers outside the ACO, and vice versa.
  3. Contracting with ACO participants on an exclusive basis.
  4. Restricting a private payer's ability to make available cost, quality, efficiency and performance information to aid enrollees in evaluating and selecting providers in the health plan if it is similar to that used in the shared savings program.

Whether the final statement will in fact further encourage and incentivize ACO formation by, among other things, replacing mandatory antitrust review with a voluntary one, remains to be seen and will undoubtedly by the subject of further study and debate. Furthermore, whether independent providers interested in collaborations by way of clinical integration will have to, at a minimum, meet CMS' eligibility criteria in order to avoid antitrust scrutiny also remains to be seen.

This article was originally published by The Recorder.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
22 Oct 2019, Roundtable, Los Angeles, United States

Please join us for Sheppard Mullin's Ethics and Eggs: A Breakfast Roundtable to Discuss Ethics Issues in IP Matters.

23 Oct 2019, Other, Dallas, United States

Marketing Wants To Do What? Sweepstakes, Influencers, Loyalty, and Other Advertising and Promotional Fun

25 Oct 2019, Webinar, Los Angeles, United States

Matthew Bonovich will be a speaker at this webinar.

State and local governments continue to incentivize renewable energy and battery storage, causing an increase in mergers and acquisitions among producers and specialized renewables.

Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions