Antitrust Law Daily Wrap Up, ANTITRUST NEWS: FTC Commissioner Brill Promotes Role of Antitrust Enforcement in Formation of Accountable Care Organizations, (Jun 12, 2013)

By Tobias J. Gillett, J.D., LL.M.

FTC Commissioner Julie Brill defended the role of antitrust enforcement in the development of Accountable Care Organizations (ACOs) under the Patient Protection and Affordable Care Act (ACA) in a speech before the Catalyst for Payment Reform’s 2013 National Summit on Provider Market Power on June 11 in Washington, D.C.

The ACA seeks to improve the quality of U.S. healthcare and reduce its cost by creating state-based health insurance marketplaces, thus encouraging greater competition in local insurance markets and permitting consumers to be more responsive to the cost and quality of provider networks, Brill explained. It also encourages health care provider groups to form ACOs to coordinate care for Medicare fee-for-service beneficiaries by permitting them to share in a certain portion of savings they create. The ACO initiative seeks to reduce overuse and to prevent duplicative tests and medications.

According to Brill, “the goals of the ACA and antitrust enforcement are aligned and compatible,” despite the ACO initiative’s focus on collaboration. Brill noted that the Centers for Medicare and Medicaid Services (CMS) had “always intended that the antitrust agencies would monitor the potential for anticompetitive harm associated with ACOs,” and that CMS had promised to coordinate its operation of the ACO program with the antitrust agencies.

Brill observed that antitrust law takes “a scalpel, not a sledgehammer” to aggregations of market power, and “carefully analyzes each case to bar only those that on balance threaten to harm consumers.” The ACA encourages procompetitive coordination of patient care services, but does not promote mergers or other consolidations among competitors. Provider groups could form ACOs through joint ventures or other contractual arrangements rather than consolidations.

In addition, Brill saw the 428 ACOs operating in 49 states, including 250 established under Medicare programs, and the fact that only two provider groups had availed themselves of the FTC and DOJ’s process for seeking expedited antitrust guidance laid out in their FTC/DOJ ACO Policy Statement, as evidence that antitrust concerns had not been a barrier to the development of ACOs.

Instead, Brill viewed antitrust enforcement as “a critical element in realizing the goals of ACOs.” Antitrust enforcement would provide an incentive for providers to work to “improve quality, enhance patient satisfactions, and make care more cost-effective,” rather than merely collaborating on prices.

As an example of antitrust enforcement’s contribution to improving health care quality and reducing costs, Brill cited the FTC’s action against the Mesa County Physicians Independent Practice Association, made up of almost all physicians in Grand Junction, Colorado. The FTC had alleged that the Association’s practice of bargaining with health plans on behalf of its members left health plans with no alternative but to pay whatever fees the physicians demanded. According to Brill, the FTC’s action may have been at least partly responsible for Grand Junction’s Medicare spending costs declining from 30 percent above the national average to 30 percent below, and for the doctors’ collaboration on a community-wide electronic record system rather than prices.

Similarly, Brill asserted that the FTC’s action against Chicago-based independent physician organizations, including Advocate Health Partners, for alleged price-fixing and refusal to deal with health plans except on collectively determined terms had resulted in cost and quality improvements, with Advocate Health Partners “cited as an exemplary provider organization delivering high-quality, cost-effective care.” She also noted that the FTC had concluded earlier this year that a “clinically integrated, centrally managed physician hospital organization” in Norman, Oklahoma “created the potential for a high degree of interdependence and cooperation among the participating physicians, and therefore would have the potential to generate significant efficiencies in the provision of physician services.”

Brill also noted that the FTC challenged four healthcare provider mergers, “while at the same time allowing dozens more to proceed without a challenge.” Where the FTC pursued enforcement actions regarding hospitals acquiring physician practices, the antitrust problem could arise with or without the formation of an ACO, Brill observed. She contended that the FTC closely considers asserted quality improvements and medical technology.

Finally, Brill stressed the importance of her audience’s role in helping the FTC prevent anticompetitive aggregations of market power by health care providers. “With your continued assistance, active enforcement of the antitrust laws can continue to play its critical role in realizing the benefits that Congress sought in promoting the creation of ACOs, and fostering competition in health care markets more generally,” she concluded.

News: Antitrust FederalTradeCommissionNews