On July 14, the Federal Trade Commission (“FTC”) voted to withdraw two antitrust policy statements related to health care: Statements of Antitrust Enforcement Policy in Health Care (1996), and Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program (2011). The FTC’s announcement followed in the footsteps of the Department of Justice (“DOJ”), which announced that it planned to withdraw from the same statements in February 2023. The FTC echoed the DOJ’s concern that the two statements are “outdated” and no longer reflect “market realities.” The now defunct policy statements provided antitrust “safety zones” for certain conduct by health care entities, shielding them from agency scrutiny for certain exchanges of cost information, joint purchasing agreements, and other collaborations between health care providers and physician networks, group purchasing organizations, as well as the conduct of accountable care organizations participating in the Medicare Shared Savings Program.
The FTC made clear its intention to rely on its “extensive record of enforcement actions, policy statements, and competition advocacy in health care” as well as “general principles of antitrust enforcement and competition policy” going forward. This is consistent with the DOJ’s announcement, though the DOJ clearly stated that it had no intention to replace the policy statements. The FTC “will continue its enforcement by evaluating on a case-by-case basis mergers and conduct in health care markets that affect consumers.”
Going forward, health care industry participants should expect increased, individualized scrutiny of their conduct. Without “safety zones,” players in the health care industry should be wary of relying heavily on former statements and engage in thoughtful, substantive reviews of current and planned conduct to ensure compliance with other sources of antitrust health care guidance and current trends. Increasingly detailed assessments of all facts and circumstances for proposed transactions and conduct by health care companies will be warranted. Think this could affect your business? Let Reed Smith’s antitrust specialists guide you through this nuanced process.