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.
Continuing its annual tradition, the U.S. Department of Justice (“DOJ”) and the U.S. Department of Health and Human Services (“HHS”) announced last week the largest ever health care fraud enforcement action by the Medicare Fraud Strike Force. As part of the national health care fraud takedown, the government charged 412 defendants with approximately $1.3 billion in alleged fraud. In addition to these charges, HHS Office of Inspector General (“OIG”) is in the process of excluding 295 health care providers from participating in federal health care programs.
Earlier this week, the Office of Inspector General for the Department of Health and Human Services (“OIG”) posted its fiscal year (“FY”) 2016 data about Medicaid Fraud Control Units (“MFCUs”) across the country.
Federal law requires each state to operate a MFCU separate and distinct from the state Medicaid Agency. MFCUs are charged with investigating and prosecuting fraud committed by Medicaid providers and in the state’s administration of the Medicaid Program, as well as patient abuse/neglect that occurs in a Medicaid-funded facility or at the hands of Medicaid providers. MFCUs currently operate in 49 states and the District of Columbia (North Dakota presently has a waiver but proposals to create a MFCU have been introduced in the state legislature). They are typically part of a state’s Attorney General’s office and are required to employ investigators, attorneys and auditors. The OIG is responsible for overseeing MFCUs. It annually recertifies MFCUs, assesses their performance and compliance with Federal requirements, and administers a Federal grant award that funds a portion of each MFCU’s operational costs. Continue Reading OIG Releases FY 2016 Statistical Data About Medicaid Fraud Control Units
A popular weapon used to contain health care expenditures is the creation by payors and employers of tiered provider networks, which by differentiated co-pays attempt to steer insureds to less expensive choices. In connection with such networks, providers will often provide better pricing in order to be placed on more favorable tiers. In a new antitrust suit, the Antitrust Division of the Department of Justice (“DOJ”) and the State of North Carolina have challenged the attempt by the dominant health care system in North Carolina to use contractual anti-steering provisions to avoid being disfavored. This Alert analyzes the Government’s complaint and how this lawsuit fits into the DOJ’s views of contractual restraints of this type.
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
As 2015 comes to a close and you look ahead to the New Year, we hope that you will consider joining us for an informative webinar on health care enforcement trends for 2016. On Wednesday, January 13, 2016, my colleagues Hope Foster, Laurence Freedman, and Bridget Rohde will host “Health Care Enforcement in 2016: A Look Back on 2015 and Forecasting the Year Ahead.” The webinar will highlight key enforcement activities from 2015 and the trends we expect to see in 2016. Continue Reading Upcoming Webinar and Report – Health Care Enforcement in 2016
Over the past year, significant regulatory changes began to take shape that will have lasting effects on the laboratory industry for years to come. After publishing draft guidance regarding the regulation of laboratory developed tests (LDTs) in late 2014, the Food and Drug Administration (FDA) made clear in 2015 that it intends to move forward with its proposal next year, and the Centers for Medicare & Medicaid Services (CMS) published a proposed rule outlining the process for overhauling the Medicare Clinical Laboratory Fee Schedule (MCLFS) for the first time in over 20 years. In addition, laboratories faced more than their fair share of enforcement actions and other litigation, and this level of activity is likely to continue in 2016. Continue Reading Laboratories – 2015 Year in Review [VIDEO]
Under a proposed settlement agreement with the Department of Justice (DOJ), private insurers Humana Inc. (Humana) and Arcadian Management Services, Inc. (Arcadian) must divest certain of Arcadian’s assets in parts of five states in order for Humana to proceed with its $150 million acquisition of Arcadian.
On March 27, 2012, the DOJ filed a civil lawsuit to block the proposed acquisition, alleging that the deal between Humana, one of the largest Medicare Advantage providers in the country, and Arcadian, an insurer with approximately 62,000 Medicare Advantage members, raised competitive concerns in the market for Medicare Advantage plans. In its complaint, the DOJ emphasized that Congress intended for Medicare Advantage insurers to compete vigorously, ultimately offering seniors a wider array of health insurance choices, more affordable benefits than traditional Medicare, and more responsiveness to seniors’ demands.
The DOJ argued that the proposed acquisition would eliminate competition between Humana and Arcadian, and thereby created a combined company accounting for 40 to 100 percent of the Medicare Advantage insurance market in 51 counties and parishes in Arizona, Arkansas, Louisiana, Oklahoma, and Texas. The DOJ further alleged that eliminating head-to-head competition between the companies would allow Humana to increase prices and reduce the quality of the Medicare Advantage plans sold to seniors in the relevant geographic areas.
The proposed settlement, which is pending approval from the court, would require the companies to divest certain Medicare Advantage plans to a DOJ-approved competitor. The proposed settlement would ensure that the buyer(s) of the divested assets would have contracts with nearly all of the same health care providers included in the Humana and Arcadian plans, at substantially the same rates.
The DOJ’s press release, complaint, and proposed settlement in this matter may be viewed here: