On Friday, February 3, the Division of Justice, Antitrust Division (the “DOJ”) introduced its withdrawal of three coverage statements on well being care antitrust enforcement: (1) The Division of Justice and Federal Commerce Fee Antitrust Enforcement Coverage Statements within the Healthcare Space (Sept. 15, 1993); (2) The Division of Justice and Federal Commerce Fee Statements of Antitrust Enforcement Coverage in Healthcare (Aug. 1, 1996); and (3) The Division of Justice and Federal Commerce Fee Assertion of Antirust Enforcement Coverage Relating to Accountable Care Organizations Taking part within the Medicare Shared Financial savings Program (Oct. 20, 2011) (collectively, the “Healthcare Statements”). It has been reported that the Federal Commerce Fee (the “FTC”), which shares antitrust enforcement authority with the DOJ (collectively the “Companies”), intends to withdraw the Healthcare Statements as properly. Assuming the FTC follows the DOJ’s lead, the withdrawal of the Healthcare Statements stands out as the most important antitrust enforcement improvement beneath the Biden Administration up to now and is probably going probably the most important healthcare antitrust improvement in a long time.
Previous to their withdrawal by the DOJ on Friday, the Healthcare Statements represented a cornerstone of federal antitrust enforcement and have offered U.S. healthcare trade suppliers, payors, employers, and others, with tons of of pages of detailed steerage concerning the Companies’ views concerning the applying of the U.S. federal antitrust legal guidelines to the healthcare trade, which represents one-sixth of the U.S. financial system and accounts for almost half of federal antitrust enforcement exercise. The Healthcare Statements cowl hospital mergers, supplier joint ventures—together with clinically and financially built-in networks –group buying, data sharing, and a number of other different collaborative actions prevalent within the healthcare trade.
In distinction to different current actions by the DOJ and FTC beneath the Biden Administration, the withdrawal of the Healthcare Statements comes as a shock, and it doesn’t seem that the Companies will situation new or revised Healthcare Statements. Reasonably, the DOJ acknowledged, “Latest enforcement actions and competitors advocacy in healthcare present steerage to the general public, and a case-by-case enforcement strategy will enable the Division to higher consider mergers and conduct in healthcare markets that will hurt competitors.”
What Does it Imply?
For almost 30 years, healthcare trade contributors (and their counsel), have relied on the Healthcare Statements in assessing the federal antitrust enforcement dangers of potential transactions, ventures, and different enterprise conduct. The Companies’ enforcement actions, the DOJ’s enterprise overview letters and the FTC’s advisory opinions might stay in place, however, amongst different issues, the withdrawal eliminates the antitrust enforcement “security zones” that had offered certainty for healthcare corporations’ considering and interesting in a variety of business actions. For instance, the Healthcare Statements established express security zones primarily based on market share for clinically or financially built-in suppliers collectively contracting with business payors. (e.g., The Division of Justice and Federal Commerce Fee Statements of Antitrust Enforcement Coverage in Healthcare, Statements 8 and 9 (Aug. 1 1996)).
The withdrawal of the Healthcare Statements additionally signifies that actions that beforehand might have offered low antitrust danger, reminiscent of these throughout the antitrust enforcement security zones, might now be within the Companies’ cross-hairs. The Companies have steadily expanded their enforcement exercise and have adopted ever broader positions regarding their enforcement authority beneath the present management, so the healthcare trade ought to count on this announcement to portend more and more vigorous federal antitrust enforcement within the healthcare house. In explaining their rationale for withdrawing the Healthcare Statements, the DOJ acknowledged, “The statements are overly permissive on sure topics, reminiscent of data sharing, and now not serve their supposed functions of offering encompassing steerage to the general public on related healthcare competitors points in in the present day’s surroundings.” Though the courts are the final word arbiters on the scope and utility of the federal antitrust legal guidelines, the Companies have broad investigative and enforcement powers that may create significant dangers for corporations properly earlier than corporations or the Companies search judicial intervention.
On account of just lately heightened antitrust scrutiny and new important uncertainty from the Companies, healthcare corporations throughout the trade ought to rigorously assess the antitrust dangers of their transactions, ventures, and different enterprise conduct.