Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Alabama health care legislation would be anticompetitive, FTC staff claims, (May 4, 2016)

By Greg Hammond, J.D.

Alabama House Bill 241 and Senate Bill 243—which would allow any public university that operates a school of medicine to form a new type of corporation in Alabama in collaboration “with all types of health care providers,” and would exempt these companies from federal antitrust laws—would be anticompetitive, FTC staff stated in a letter sent to the Alabama State Senate and House.

According to FTC staff from the Office of Policy Planning, Bureau of Competition, and Bureau of Economics, the proposed legislation would allow public universities with schools of medicine to create a new type of public corporation—called an “authority”—that would have the power to: (1) acquire, construct, equip, and operate those health care facilities it considers necessary or desirable; (2) create, establish, acquire, operate, or support subsidiaries and affiliates, either for-profit or nonprofit, to assist an authority in fulfilling its purposes; and (3) participate as a shareholder in a corporation, as a joint venturer in a joint venture, as a general or limited partner in a general or limited partnership, as a member of a nonprofit corporation, or as a member of any other lawful form of business organization, that provides health care or engages in related activities. In addition, the bill would insulate these “many and diverse entities” and their conduct from the antitrust laws.

The antitrust laws already allow procompetitive health care collaborations, according to the FTC staff, rendering the legislation unnecessary. “The Bill’s apparent attempt to confer antitrust immunity is therefore unnecessary for collaboration that would benefit Alabama’s citizens,” FTC staff wrote. “If such immunity were conferred, it would prevent antitrust authorities from scrutinizing, moderating, or preventing anticompetitive mergers and conduct that would seriously harm Alabama consumers. In some cases, it also could encourage groups of private health care providers to engage in blatantly anticompetitive conduct.”

News: Antitrust FederalTradeCommissionNews