Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Hospital Association's Information Sharing Plan Gets Pass from Justice Department, (Jan 16, 2013)

By Jeffrey May, J.D.

The Department of Justice Antitrust Division has no present intention to challenge a proposal by the Greater New York Hospital Association (GNYHA), a trade association of 250 hospitals and continuing care facilities, to establish a voluntary program to share information about physician use of hospital resources to permit rewarding the efficient use of those resources. The Antitrust Division's position was stated in a January 16, 2013, business review letter.

In August 2012, the GNYHA requested a business review regarding a “gainsharing program” that it plans to make available to the 100 hospitals that are its New York members. According to GNYHA, “gainsharing programs are designed to encourage physicians to take into account their use of hospital resources in their decision-making process and to reward them by providing them with a portion or 'share' of the savings or 'gain' that results from more efficient use of those resources.” The program would permit hospitals to “measure physician performance against certain benchmarks and award bonuses to physicians for improvements in quality and efficiency.” It is purportedly based on upon gainsharing demonstration programs that Medicare has created “and incorporates the same system of safeguards employed in those programs.”

The Antitrust Division identified two issues raised by the proposal: (1) whether it constitutes a horizontal agreement among competing hospitals about compensation levels for physicians and (2) whether it constitutes an information exchange among hospitals that would facilitate anticompetitive coordination among hospitals to limit physician compensation. Based on GNYHA's representations, the proposed gainsharing program appears unlikely to cause these or other anticompetitive effects, according to the Antitrust Division.

The proposal, according to GNYHA, does not “involve any agreement, coordination, or discussion concerning the prices that participating hospitals or physicians charge for their services.” Each participating hospital will “independently and unilaterally” cap the amount of money that the hospital will make “available for incentive payments to its participating physicians.” Under the program, GNYHA reserves the right to exclude a hospital from the program if its proposed cap on incentive payments does not comply with applicable laws and regulations. In addition, a fair market value analysis “will be conducted to ensure that the hospital and its physicians have actually taken concrete steps to justify the award of incentive payments.” The Antitrust Division concluded that the provisions related to physician payment caps and fair market value analysis were reasonably necessary to further the procompetitive purposes of the gainsharing program.

The Antitrust Division also noted that its position was predicated upon the program participants' refraining from exchanging competitively sensitive information. The program will restrict the dissemination of information to non-competitively sensitive cost and benchmark data. In addition, the proposal to share "best practice" data with the participating hospitals as a group will comply with the antitrust safety-zone requirements of Statement 6 of the 1996 joint Department of Justice/FTC Statements of Antitrust Enforcement Policy in Health Care. The program will not allow providers to determine what other providers are receiving, paying, or charging.

Companies: Greater New York Hospital Association.

News: Antitrust AntitrustDivisionNews