ACA v. antitrust: The discussions continue

It has been almost six years since the enactment of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), yet the question as to whether the ACA conflicts with antitrust laws continues to arise, most recently on December 15, 2015, at a briefing at the National Press Club, where,  as reported by the Congressional QuarterlyDeborah Feinstein, director of the FTC’s Bureau of Competition, said that “the goals of the ACA are in harmony and not in conflict” with the ACA. In addition to Feinstein’s comments, in the last four months alone, the House of Representatives Judiciary Committee, the American Bar Association (ABA) Health Law Section,  and the Antitrust Division of the Department of Justice (DOJ) have confronted the issue of the relationship of the ACA to antitrust laws. Opinions vary and questions remain though the FTC has maintained its position for years.

In her opening remarks at the Fifth Annual Accountable Care Organizations Summit on June 19, 2014, Feinstein said that “[i]t is critical to recognize that the integration of care provided to patients is fully compatible with core antitrust principles… so long as those efforts do not result in the accumulation of market power.” She added that the ACA “has not altered the antitrust standard that would apply to similar collaborations designed to reduce costs and improve the quality of health care,” and “does not require providers to merge or consolidate and recognizes that ACOs may be formed through contractual arrangements that are well short of a merger.”

The House review

The House of Representatives Judiciary Committee, concerned that the ACA is “antithetical to competition,” because it “put[s] in place a regulatory structure that stifle[s] competition and institute[s] incentives for increased market consolidation,”  sought further review of the issues that have arisen in September of 2015. A main concern of the Committee is that if markets are forced to consolidate under the ACA, competition may be reduced, which would contradict the law’s ACA’s benefits.

The Committee received testimony from Professor Thomas L. Greaney of St. Louis University School of Law, Rick Pollack, president and CEO of the American Hospital Association; Scott Gottlieb, M.D., of the American Enterprise Institute; Daniel T. Durham, executive vice president of strategic initiatives at American Health Insurance Plans; and Barbara L. McAneny, M.D., a representative from the American Medical Association Board of Trustees.

The ABA roundtable discussion

“Since the passage of the Affordable Care Act, there has been significant consolidation among health care entities, but the ACA’s role in driving such consolidation is less clear.  Questions have arisen regarding the compatibility of the ACA and antitrust law,” William W. Horton, ABA Health Law Section Chair noted on his website.  On October 22, 2015, the ABA Health Law Section Business and Transactions Interest Group held a roundtable discussion on the “Compatibility of the ACA and Antitrust Law, ” which was recorded and is available to ABA members.

Horton explained that the  “discussion focused on whether the ACA encouraged consolidation as a positive development in health care, in which case current antitrust law may be a barrier to beneficial transactions. Or if consolidation among health care entities was an unintended consequence of the ACA that reflects attempts to “game” or undermine certain provisions of the ACA, in which case antitrust law may serve more to protect the health care market. ”

Integration, consolidation, and competition

Integration, consolidation, and competition in the wake of the ACA was the focus of  the presentation by William J. Baer, Assistant Attorney General in charge of the Antitrust Division of the DOJ at the New Health Care Industry Conference in Washington, D.C., on November 13, 2015. Baer noted that the ACA “recognizes the value of legitimate collaboration by promoting accountable care organizations and clinical integration that can improve the quality of care while lowering costs;” and added that the Antitrust Division and the FTC “worked closely with HHS to support the ACA efforts by providing guidance as to when and how traditional competitors can collaborate without lessening competition and thereby harming consumers.”

Baer explained that “the FTC/DOJ ACO Policy Statement describes how ACOs can benefit patients without violating the antitrust laws, including describing safety zones for some ACOs and the standards for applying the antitrust “rule of reason” to others.  The launch of more than 700 public and private ACOs to date demonstrates the opportunities for new forms of clinical integration.” He stressed that “while the ACA promotes collaboration and integration, it does not and was not meant to give anyone a free pass from the antitrust laws. Indeed, the very harms that result from the exercise of market power – higher prices, fewer competitors, reduced innovation – are contrary to the law’s goals.”

It is clear from recent hearings and meetings that the antitrust concerns related to the ACA are not resolved and the discussions and debates will continue as integration of health care continues to evolve.