Is the Department of Justice (DOJ) and Federal Trade Commission (FTC) antitrust guidance adequate for health care provider collaboration? In its report, Federal Antitrust Policy: Stakeholders’ Perspectives Differed on the Adequacy of Guidance for Collaboration among Health Care Providers, the Government Accountability Office (GAO) has found that the health care industry groups and experts in antitrust law (stakeholders) have different perspectives on the adequacy of three key aspects of antitrust guidance for health care provider collaboration: (1) clinical integration, (2) greater use of exclusive collaborative arrangements, and (3) which collaborative arrangements are exempt from antitrust.
The Guidance and the Task
The FTC and the Antitrust Division of the DOJ issued specific guidance for health care providers on the application of antitrust laws, including the analysis undertaken to determine whether to challenge a particular collaborative arrangement among competing health care providers is unlawful. FTC and DOJ also issued guidance in October 2011 describing their approach to antitrust policy for Accountable Care Organizations (ACOs) that are eligible to participate in the Medicare Shared Savings Program (SSP). The SSP is intended to promote provider collaboration to reduce costs and improve quality of care for Medicare beneficiaries by allowing ACOs to receive a portion of the net savings realized as a result of their efforts.
Based on a request by Congress to examine how federal antitrust guidance may affect the ability of health care providers to collaborate to improve health care quality the GAO set out to determine the opinions of health care industry groups and experts in antitrust law on the key aspects of federal antitrust guidance related to collaboration among health care providers. To address this task, GAO also interviewed officials from the DOJ and the FTC on the federal antitrust policy for collaborative arrangements in health care.
GAO noted that a growing consensus among providers, researchers, and policymakers that collaboration among health care providers as essential to addressing problems related to inefficient care delivery, poor quality of care, fragmented care, and patient dissatisfaction that arises in health care delivery in the United States. Collaborative arrangements, which can take a variety of forms, including collaborations among independent physician groups (physician arrangements) or among multiple types of independent providers (multi-provider arrangements), may be able to address problems associated with fragmented care delivery because providers generally have greater resources and ability to coordinate care when collaborating with each other than when acting separately, GAO explained.
While collaborative arrangements can have potential benefits, GAO pointed out that such arrangements may lead to higher prices. Providers in a collaborative arrangement may be able to negotiate higher prices with health plans than would otherwise be expected in a competitive market merely because they have agreed to act together in setting fees. GAO added that while higher prices benefit providers, consumers are adversely affected if higher prices for providers result in higher health plan premiums. Furthermore, when collaborating providers have the ability to negotiate prices in excess of competitive levels, the arrangement may violate federal antitrust laws, which are designed to promote market competition. In a competitive health care market, consumers are able to choose from a wide variety of competing providers that have an incentive to furnish the highest-quality services at the lowest cost, GAO said.
The stakeholders’ differing perspectives of the key aspects of the antitrust guidance for health care provider collaboration are as follows.
- Sufficiency of guidance on clinical integration. Clinical integration, which involves integrating clinical activities across providers in a collaborative arrangement, is one way for a collaborative arrangement to satisfy the requirement that the arrangement demonstrate the potential to yield significant benefits, such as reduced costs or improved quality, in order to be able to jointly negotiate prices. Five of the six experts and one of the four industry groups said that the guidance was sufficient, while one expert and two industry groups found the clinical integration guidance was inadequate.
- Greater use of exclusive collaborative arrangements. Exclusive collaborative arrangements restrict the ability of providers within a collaborative arrangement to contract with other arrangements or health plans. The use of exclusive arrangements has the potential to improve or reduce competition, depending on the circumstances, GAO said. Four of the experts found that the guidance on exclusive arrangements was reasonable, while three industry groups stated that FTC and DOJ should permit greater use of exclusive arrangements.
- Adequacy of guidance on which collaborative arrangements are exempt from the antitrust analysis. Collaborative arrangements that are exempt from antitrust analysis are presumed to be lawful and considered to be within a safety zone. One of the four industry groups and one of the six experts said the size and scope of the safety zones outlined in the FTC and DOJ Statements of Antitrust Enforcement Policy in Health Care issued in 1996 were appropriate, while three industry groups and three experts contended that the safety zones should be expanded to include a wider range of arrangements.
As a health care provider in a collaborative arrangement, a health care provider considering participating in a collaborative arrangement, or an expert in antitrust law, do you have a perspective on the adequacy of the antitrust guidance?