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February 06, 2023

DOJ Withdraws Health Care Antitrust Statements: What’s Next for the Health Care Industry?

On Friday, February 3, 2023, the Justice Department’s Antitrust Division formally withdrew three antitrust policy statements relating to the Division’s enforcement of the antitrust laws in health care markets and for health care providers (e.g., health systems, hospitals and physicians). These three statements, which were released jointly by the Department of Justice (DOJ) and the Federal Trade Commission (FTC) previously provided antitrust guidance to health care providers on a number of topics, including hospital mergers, hospital and physician joint ventures, joint information exchanges, joint purchasing arrangements, and multi-provider networks. The three statements included are:

The DOJ announced that it does not intend to replace the withdrawn statements with new guidance. Instead, the Antitrust Division will utilize “a case-by-case enforcement approach which will allow the Division to better evaluate mergers and conduct in health care markets that may harm competition.” Although expected, the FTC has not yet withdrawn these statements, which would require a vote by the Commissioners to do so. This is noteworthy given the FTC has historically enforced the antitrust laws against health care providers more so than DOJ. 

In its press release announcing its withdrawal, DOJ acknowledged “the health care landscape has changed significantly” since these statements were issued, and “[a]s a result, the statements are overly permissive on certain subjects.” The DOJ specifically called out its statements on information exchange and no other topic as “no longer serv[ing] their intended purpose of providing encompassing guidance to the public ….” 

While the current thinking and guidance on many of these topics have been driven by recent precedent, enforcement decisions and further economic thinking about health care provider markets over the last quarter century as opposed to these statements solely, health care providers utilized the statements for guidance on information exchanges, establishing and operating multi-provider networks, and joint purchasing.

Implications of Withdrawal on Information Exchanges

In a speech at an antitrust conference the day before the statements were withdrawn, Principal Deputy Assistant Attorney General Doha Mekki argued that information exchanges permitted under these statements could enable price and wage fixing, given changing health care market realities and the greater use of algorithms and de-anonymization techniques. Previously, these statements permitted information exchanges (establishing so-called “safety zones”) among competitors so long as (1) the exchange was managed by a third party, (2) the data was more than three months old and (3) consisted of information that was anonymized and aggregated, with the data report including data from at least five participants and with no single participant representing more than 25% of the total data. 

So, what can we expect from DOJ’s new “case-by-case” approach? Ultimately, we can anticipate new enforcement challenges by the agency. In the meantime, health care providers should continue to use best practices to minimize antitrust risk when sharing information among competitors. Data exchanges will continue to occur, whether as part of due diligence for proposed transactions, as part of joint ventures or collaborations, and for other procompetitive reasons, but steps can be taken to minimize antitrust risk, regardless of whether the statements are in effect. 

  • For the most competitively-sensitive information — such as prices, rates, costs (e.g., wages and compensation) and business strategies — information should never be shared directly among competitors.
  • The most sensitive information is that which is specific or transactional in nature; data that is aggregated sufficiently, directional, and/or older is not as sensitive.
  • If there is a legitimate need to exchange certain information, antitrust counsel can advise on appropriate “clean team” or screening procedures to protect from an exchange violating the antitrust laws.
  • Information that is publicly available in some manner is of no antitrust concern and can be freely disclosed.
  • Finally, discrete, one-off exchanges of information are likely to be subject to less scrutiny than repeated or systematic exchanges. Indeed, DOJ’s withdrawal makes clear that the type of systematic exchanges which previously fell under a “safety zone” may be ripe for additional investigation and challenge.

Implications of Withdrawal on Clinical Integration and Joint Purchasing

While it is unclear whether DOJ viewed its prior statements on clinical integration or multi-provider networks as “overly permissive” in today’s health care landscape, those statements have also been withdrawn. Nonetheless, there is agency guidance still in effect and precedent outside the statements that health care participants have followed and should continue to follow to minimize antitrust risk. 

  • Provider Joint Ventures to Form Clinically Integrated Networks. Beyond the antitrust principles in the statements, the agencies have provided the health care industry guidance in the form of several FTC advisory opinions, enforcement actions, workshops and reports on the circumstances in which clinically integrated networks and joint managed care contracting among competing providers may be procompetitive and unlikely to limit competition.
  • Group or Joint Purchasing Among Competitors. Similarly, for joint purchasing activities, DOJ and FTC jointly adopted the Antitrust Guidelines for Collaborations Among Competitors in 2000. There, the agencies identify (i) a general “safety zone” when the participants account for less than 20% of the relevant market and (ii) safeguards parties can implement to reduce risk by limiting the exchange of competitively sensitive information as part of the joint purchasing. Those guidelines, and the related precedents from courts and enforcers, will continue to provide the health care industry with guidance on how to avoid antitrust risk when jointly purchasing goods or services with a competitor.

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We will continue to monitor statements and actions by both DOJ and FTC on these policy statements and their implications on the health care industry. In the meantime, consult with counsel with any questions concerning specific information exchanges or disclosures, joint ventures or payor contracting involving clinical integration, or joint purchasing or buying. Parties should be aware of DOJ’s heightened interest in areas covered by these statements and work with counsel to follow best practices to avoid antitrust risk.

The material contained in this communication is informational, general in nature and does not constitute legal advice. The material contained in this communication should not be relied upon or used without consulting a lawyer to consider your specific circumstances. This communication was published on the date specified and may not include any changes in the topics, laws, rules or regulations covered. Receipt of this communication does not establish an attorney-client relationship. In some jurisdictions, this communication may be considered attorney advertising.

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