The Antitrust Implications of Health Care Reform


The current hot topic among health care providers is whether to join an accountable care organization (“ACO”). With this interest in consolidation comes the latest round of antitrust scrutiny. But consolidation in the health care industry - and the accompanying antitrust scrutiny - is nothing new. Between 1990 and 2003, concentration of the hospital market in United States metropolitan statistical areas increased more than 32 percent. During that same time period, the United States Department of Justice and the Federal Trade Commission issued guidance relating to health care consolidation on three separate occasions - in 1993, 1994, and 1996.

The current buzz surrounding ACOs stems less from their mere presence and more from the fact that the incentive to consolidate comes from a new source. In 2010, the federal government passed the Patient Protection and Affordable Care Act (“PPACA” or the “Act”), a law incentivizing consolidation among Medicare providers in an effort to improve the quality and reduce the costs of the Medicare program. Where the incentive to consolidate was once based on commercial factors, the government has now provided additional incentive. Where health care organizations hoping to consolidate have always been attuned to antitrust risks and considerations, the tension has become even more palpable. How will ACOs created pursuant to the recent federal health care reform avoid running afoul of age-old federal antitrust law? Despite recent guidance from the DOJ and the FTC, the answer is still unclear.

Excerpted from ABA Antitrust Section Joint Conduct Committee E-Bulletin, Vol. 9, No. 2, Spring 2012, p. 6. To read the article, click here.

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