Editor's note: The following article is the first in a three-part series. Federal Antitrust Enforcement in Healthcare: Looking Back in 2023. This series is based on recent webinars. 2023 Healthcare Enforcement Trends: Focus on Consumer Protection, Antitrust, and Fraud.click here To watch free webinars on demand,
Antitrust enforcement in healthcare remains a high priority for enforcers at the U.S. Department of Justice Antitrust Division and the Federal Trade Commission in 2023. All participants in the healthcare industry, from providers to patients, payers to pharmaceutical and device manufacturers, must: The Biden administration continues to work to address the assertion in a July 2021 executive order that “Americans pay too much for prescription drugs and health care services,” and the It is expected that Japan will vigorously enforce antitrust laws.1
In fact, on October 26, 2023, Antitrust Division Assistant Attorney General Andrew Forman said in a public address that “no question is more important to antitrust enforcement officials than what we can do to protect competition in the healthcare industry. ” he explained.2 At the same meeting, FTC Commissioner Alvaro Bedoya struck a similar tone, discussing the “multiple tools” the agency has to address allegations of anticompetitive conditions in the health care market.3
Consistent with these messages, the FTC and Department of Justice have been very active in the health care space in 2023, challenging mergers, pursuing conduct issues, and changing the health policy landscape. Based on this year, next year's theme will likely be aggressive enforcement and breaking boundaries by federal antitrust enforcement officials.
A three-part series in the Manat Newsletter explores these trends. First is the challenge to provider and payer mergers.
Merger challenges
In 2023, the FTC and Department of Justice invested significant resources to challenge proposed mergers and unwind completed mergers in the healthcare industry, both through administrative litigation and in federal court. Particularly towards the end of the year, that investment paid off for the European Commission, which blocked several mergers.
- provider merger
John Muir Health/Tenet Healthcare. In November 2023, the FTC and the State of California announced the $142 million acquisition by John Muir Health, 49% owner of San Ramon Regional Medical Center, from majority owner Tenet Healthcare. A lawsuit was filed in the Northern District of California seeking an injunction.Four The FTC and state argue that John Muir and San Ramon are direct competitors on the I-680 corridor near Walnut Creek, Calif., and that insurers would pay higher premiums if their competition were eliminated. Patients argued that they would have to pay higher premiums and that their insurance would not be paid. -Pocket costs in an already concentrated hospital market.Five In December 2023, the parties abandoned the transaction, noting that “the significant investment of time and money required for litigation could be better used to support other initiatives and joint ventures within the health system.”6
Louisiana Children/HCA. In a high-profile case examining the interaction between federal premerger notification laws and state public interest law certificates, the FTC files suit against Children's Medical Center of Louisiana to block the merger of three hospitals acquired from HCA Healthcare. However, they lost the case.7 The Eastern District of Louisiana court rejected the FTC's argument that the parties should have filed notice of the transaction prior to the merger pursuant to the HSR Act.8 The court found that state litigation doctrine exempted the transaction from federal antitrust laws, including the premerger filing requirements of the HSR Act, because the Louisiana Department of Justice had issued a certificate of public interest for the transaction. The court held that9 Surprisingly, the FTC did not appeal, especially after a 2022 policy paper that argued that the COPA agreement could lead to higher prices and lower quality.Ten
Welsh Carson/US Anesthesia Partner. In September 2023, the FTC filed a complaint in the Southern District of Texas against U.S. Anesthesia Partners Inc. (USAP) and private equity firm Welsh Carson, alleging that the two companies had a series of small transactions in Texas. He claimed to have integrated anesthesiology services. The “roll-up” constituted a multi-year anti-competitive scheme to create a single dominant provider.11 The complaint alleges that the defendants entered into pricing agreements that left the practices independent and agreements that excluded competitors from USAP's territory.12 In November 2023, the parties moved to dismiss the FTC's complaint, stating that the FTC does not have the authority to challenge long-completed acquisitions in direct federal court litigation (separated from administrative proceedings) and that the series of transactions argued that it was good for consumers.
- Payer merger
UnitedHealth/Change. In a vertical merger contested at the appellate level, the Antitrust Division appealed a district court's dismissal of a lawsuit seeking to block UnitedHealth's acquisition of healthcare analytics company Change Healthcare, arguing that “competition and affordability Protecting access to health care is of paramount importance to businesses.” Antitrust Division and Department of Justice. ”13 However, in March 2023, the Antitrust Division withdrew the appeal.14
1 Executive Order Promoting Competition in the U.S. Economy (July 9, 2021) (“Our Administration is committed to enforcing antitrust laws to combat the harmful effects of industrial overconcentration, abuse of market power, and monopoly. ' and monopsony – especially when these problems occur in the healthcare market (including insurance, hospitals, and prescription drug markets).' available at https://www.whitehouse.gov/briefing-room/presidential-actions/2021/07/09/executive-order-on-promoting-competition-in-the-american-economy/.
2 Assistant Attorney General Andrew J. Forman speaks at the Capitol Forum: Healthcare Competition Conference (October 26, 2023), available at https://www.justice.gov/opa/speech/deputy-assistant-attorney-general-andrew-j-forman-delivers-remarks-capitol-forum-health.
3 Capitol Forum, Fireside Chat with FTC Commissioner Alvaro Bedoya (October 26, 2023); available at https://www.youtube.com/watch?v=VkQCHB1IVrY.
4 Press Release, FRB. Trade Comm'n FTC sues to block John Muir Health's acquisition of San Ramon Regional Medical Center (November 17, 2023); available at https://www.ftc.gov/news-events/news/press-releases/2023/11/ftc-sues-block-john-muir-healths-takeover-san-ramon-regional-medical-center.
5 Complaints, score 1-2. 1, FTC v. John Muir HealthNo. 3:23-cv-05952 (ND Cal. November 17, 2023), available at: https://www.ftc.gov/system/files/ftc_gov/pdf/2310054johnmuirtenetpicomplaint.pdf.
6 Press Release, John Muir Health, Statement Regarding John Muir Health's Acquisition of San Ramon Regional Medical Center (December 15, 2023), available at: https://www.johnmuirhealth.com/about-john-muir-health/press-room/Press-releases/2023-12-18-statement-regarding-san-ramon-regional-medical-center-acquisition-by- john muir-health.html; Fed press release. Trade Comm'n, John Muir Statement on Closing of San Ramon Regional Medical Center Acquisition from Tenet Healthcare (December 18, 2023); available at, https://www.ftc.gov/news-events/news/press-releases/2023/12/statement-regarding-termination-john-muirs-takeover-san-ramon-regional-medical-center-tenet (“In less than a month, the FTC has scored another major victory in health care, providing California patients with continued access to quality, affordable health care services.”)
7 Press Release, FRB. Trade Comm'n, FTC sues to halt potentially illegal consolidation of New Orleans-area hospitals for failure to comply with federal reporting laws (April 20, 2023); available at https://www.ftc.gov/news-events/news/press-releases/2023/04/ftc-sues-stop-potentially-illegal-integration-new-orleans-area-hospitals-over-failure-follow- federal reporting law.
8 Order and Reason, Dkt. 92, Louisiana Children's Medical Center v. Attorney GeneralNo. 2:23-cv-01890 (ED La. September 27, 2023), available at: https://www.courtlistener.com/docket/67223260/92/louisiana-childrens-medical-center-v-attorney-general-of-the-united/.
9 Same as above.
10 Press Release, FRB. Trade Comm'n, FTC policy document warns of pitfalls of his COPA agreement for patient care and healthcare workers (August 15, 2022), available at https://www.ftc.gov/news-events/news/press-releases/2022/08/ftc-policy-paper-warns-about-pitfalls-copa-agreements-patient-care-healthcare-workers.
11 look complaints, FTC v. US Anesthesia Partners, Inc.No. 4:23-cv-03560 (SD Texas, September 21, 2023); available at https://www.ftc.gov/system/files/ftc_gov/pdf/2010031usapcomplaintpublic.pdf.
12 look ID. ¶¶ 4-8.
13 Antitrust Division Press Release, Statement from Assistant Attorney General Jonathan Cantor on the District Court's Decision in United States v. UnitedHealth Group and Change Healthcare (September 19, 2022), available at: https://www.justice.gov/opa/pr/statement-assistant-attorney-general-jonathan-kanter-district-court-s-decision-us-v.
14 Voluntary Dismissal Provisions, Doc. 1990806, United States v. UnitedHealth GroupNo. 22-5301 (DC Circ. March 20, 2023).
