The Department of Justice (“DOJ”) Antitrust Division recently announced plans to hold a series of public roundtable discussions to analyze the relationship between competition and regulation, and its implications for antitrust enforcement policy. As the Antitrust Division continues to scrutinize the healthcare industry, these roundtables may give a window into the Division’s current thinking about mergers and acquisitions and contracting practices in the industry. The roundtable series starts on Wednesday, March 14, 2018, with a focus on antitrust exemptions and immunities, including a focus on the appropriate role of the state action doctrine. The roundables will include perspectives from various industry participants as well as “academics, think tanks, and other interested parties to discuss the economic and legal analyses of competition and deregulation.” The second roundtable will be held on April 26, 2018, and will focus on consent decrees. The third roundtable will be held on May 31, 2018, and will analyze the consumer costs of anticompetitive regulations. The DOJ will accept public comments (not to exceed 20 pages) in advance of each of the roundtables. The federal antitrust agencies often hold public events of this nature to further inform their antitrust enforcement agendas. It will be interesting to see if this roundtable series results in any major enforcement policy changes for the Antitrust Division, which is now under the leadership of Assistant Attorney General, Makan Delrahim.
On Monday, September 11, our colleagues in the Antitrust Section published an alert describing a developing antitrust lawsuit against Franciscan Health System (“CHI Fanciscan”): State of Washington v. Franciscan Health System, et al. No. 3:17-cv-05690 (W.D. Wash. Aug. 31, 2017). The Washington State Attorney General’s office accuses CHI Franciscan of accumulating a controlling share of the “Orthopedic Physician Services” market through incremental acquisition which has led to substantial lessening of competition and illegal price fixing, in violation of Section 7 of the Clayton Act and Section 1 of the Sherman Act, respectively, as well as Washington State antitrust laws.
The alert cautions that health care provider acquisition strategies may come under antitrust scrutiny, even when acquisitions target multiple small physician practices, if the cumulative effect of such acquisitions results in substantial condensation of market share in a particular area of health care services.
For greater insight on this issue, read the full alert here.
Two West Virginia hospital systems settled a lawsuit filed yesterday by the Department of Justice (“DOJ” or “Department”) alleging that they agreed to allocate territories for marketing health care services in violation of Section 1 of the Sherman Act. The DOJ alleged that Charleston Area Medical Center (“CAMC”) and St. Mary’s Medical Center (“St. Mary’s”) agreed not to advertise in each other’s geographic territories, which the Department said deprived customers of useful information about competing health care providers. U.S. v. CAMC, Case No. 2:16-cv-03664 (S.D. W.VA. Apr. 14, 2016).
Certain types of agreements between competitors (e.g., market allocation, price fixing) are strictly prohibited under Section 1 of the Sherman Act. These types of agreements are considered per se illegal and are presumed as harmful because they deprive consumers of the benefits of competition and provide no offsetting benefit to consumers. This case is a reminder that the antitrust authorities can, and do, challenge market allocation arrangements and other naked restraints of trade that violate Section 1 of the Sherman Act. Continue Reading Hospitals Settle DOJ Suit Alleging Illegal Division of Marketing Territories