Home Health & Hospice Week

Will all the changes really promote more open and fair competition, or just make providers’ lives harder?

It’s been a busy summer for antitrust reform, with everything from the sharing of information to mergers impacted.

Navigating the rocky road ahead will be difficult, so let’s take a closer look at what’s happened, what it all means and what to do about it.

First — Established Policies Withdrawn

Background: On Feb. 3, 2023, the Department of Justice eliminated three longstanding antitrust policy statements. The withdrawal was immediately effective and applied to the:

1. Oct. 20, 2011 Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program

2. Aug. 1, 1996 Statements of Antitrust Enforcement Policy in Health Care

3. Sept. 15, 1993 Department of Justice and FTC Antitrust Enforcement Policy Statements in the Health Care Area

Latest: On July 14, the Federal Trade Commission followed the DOJ and withdrew the first two of those three statements.

These statements described conduct that the agencies would not challenge under antitrust regulations, absent any extraordinary circumstances. Removal of these safeguards exposes providers to greater antitrust scrutiny when:

• pursuing certain mergers
• coordinating activities such as healthcare services/joint ventures
• participating in Accountable Care Organizations (ACOs)
• considering joint purchasing arrangements e.g., Group Purchasing Organizations (GPOs)
• sharing certain information

The DOJ pointed to “recent enforcement actions and competition advocacy” as a replacement, but lacking clear, authoritative policy on these matters is risky for all healthcare organizations, experts insist. The DOJ further advised that it will be using a case-by-case enforcement approach.

Next — Revisions to Age-Old Merger Guidelines Proposed

Background: In 1968, the DOJ/FTC Merger Guidelines were released. This original guidance, while amended over time, defined how the regulating agencies review and evaluate acquisitions and mergers to identify those that may be potentially illegal.

Latest: On July 19, the agencies released a proposed redraft of these guidelines. See the draft document at www. ftc.gov/system/files/ftc_gov/pdf/p859910draftmerger­guidelines2023.pdf.

The proposal combines previously distinct horizontal and vertical merger guidelines. The agencies assert this is necessary as structural changes have made it difficult to always differentiate a transaction as one or the other. (Horizontal mergers involve two competitors while vertical mergers involve firms in a buyer-seller relationship, according to the FTC.)

Be aware: The latest proposed revisions are a substantial shift from the prior guidance, experts say. They now center around 13 specific points that the regulators will use to determine the legality of a transaction. (See points in box, p. 250.)

Polsinelli Law points out in online analysis that while numerous and notable changes are proposed, a few stand out in terms of their practical impact.

• The Merger Guidelines set out significantly lower market concentration thresholds for horizontal and vertical mergers, which means more mergers, will be presumptively viewed as being potentially anticompetitive, thereby triggering review by the agencies.
• The guidelines seem to be pushing for a new legal standard for the market definition that will include certain non-price qualitative factors in identifying competitors. This will give the agencies more leeway in determining which market participants may offer a competitive constraint to the proposed combination.
• The guidelines seem to deemphasize both econometric and efficiencies analyses, both of which have traditionally been bedrocks in merger justification and defense strategies. These, and other changes, suggest a much more difficult road to secure merger investigation clearance.

Polsinelli goes on to warn that these changes will impact all healthcare companies as they engage in all manner of mergers and acquisitions transactions. And, it counsels that even if you try to expedite acquisitions before these proposed changes go into effect, practitioners are already experiencing the implementation of some of these policies in merger investigations.

Act now: The guidelines are not final. Make your voice heard and submit your comments by Sept. 18.

Prepare Now With These Steps

Experts suggest providers initiate a proactive and substantive analysis with antitrust counsel to:

1. Review all healthcare transactions that previously relied upon the guidance set forth in any of the three withdrawn policies.

2. Evaluate and revise antitrust compliance policies as they relate to the withdrawn guidance.

3. Review existing collaborations, especially with competitors. Define the type of collaboration and the justifi­cation for the collaboration from an antitrust standpoint.