On May 9, 2024, the U.S. Department of Justice Antitrust Division (“DOJ”) announced a new task force to address “pressing antitrust issues in the health care market.” The new initiative, named the Health Care Monopolies and Collusion Task Force (“HCMC”), aims to address “a wide range of competitive concerns shared by patients, health care professionals, businesses, and entrepreneurs regarding payers and health care providers. The focus is on the Department of Justice’s view that there are “issues, including issues with the law.” Consolidation, serial acquisitions, workforce and quality of care, medical billing, healthcare IT services, healthcare data access and misuse, and more. ”
Ho Chi Minh City employs civil and criminal prosecutors, economists, healthcare industry experts, engineers, data scientists, investigators, policy advisors, and their expertise from across the Antitrust Division’s civil, criminal, litigation and policy programs. A multidisciplinary team including the house. analysis group. Ho Chi Minh City appears to be an antitrust-only initiative of the Department of Justice, rather than an interagency working group.
DOJ has a long history of establishing task forces to target what it has identified as enforcement priorities. Examples of this in the healthcare field include the COVID-19 Fraud Task Force, the New England Prescription Opioid (NEPO) Task Force, and the long-established Healthcare Fraud Prevention and Enforcement Action Team (HEAT). However, not all task forces are created equal. Some task forces are more active and “successful” than others.
As industry experts and stakeholders know, the healthcare sector is routinely subject to government scrutiny from a variety of agencies. Coordination between various federal agencies illustrates this point.
Over the past several years, HHS has partnered with the Office of Inspector General (OIG) and Medicare and Medicaid Services with the goal of reducing regulatory barriers, transforming the entire health care system into one that rewards value and promotes care coordination. In collaboration with the Centers for Disease Control and Prevention (CMS), we launched the Regulatory Sprint to Coordinated Care. Both OIG and CMS announced new final rules that went into effect in January 2021, revising the healthcare regulatory environment to support the push toward value-based care.
Additionally, CMS also announced a new primary care model starting July 1, 2024. This decade-and-a-half model provides primary care clinicians with additional resources and data to help improve collaboration with specialists and support care integration.
However, the realities of the economic climate frequently require healthcare companies to pursue rapid growth and grow in order to assume the risks associated with serving patient populations in a value-based model. This is because such approaches focus on health outcomes rather than service delivery (based on a fee-for-service model). It remains to be seen how investments in and pursuit of value-based care models will impact the work of the new Ho Chi Minh City task force, or whether this new task force will take these developments and market conditions into account. I don’t know. Also noteworthy is the coordinated effort among various federal agencies. In late 2022, the Department of Justice and the Department of Health OIG announced a partnership to work together to protect health care markets through enhanced oversight, enforcement, and information sharing. And as recently as March 2024, the Department of Justice partnered with the Federal Trade Commission and HHS to issue a joint request for information seeking public comment on healthcare industry transactions. Overall, Ho Chi Minh City may be a special committee of the Department of Justice, but developments over the past few years portend considerable cooperation and coordination across broad areas of the federal government. This may only add to the regulatory, compliance, and enforcement complexities that healthcare companies may face.
We note that recent government interest in suspected or perceived anticompetitive activity in the health care industry is not limited to the federal government. Indeed, some states are increasingly concerned with antitrust oversight, regulation, and enforcement. Recent developments in California perfectly illustrate this trend. In 2022, California authorizes the creation of the Office of Health Care Affordability (“OHCA”), a new government agency that will oversee economic activity in the health care sector to ensure Californians have access to affordable health care services. did. One of the ways OHCA suggests achieving this goal is by conducting pre-closing reviews of market transactions. Under the new OHCA regulations, California will conduct a cost and market impact review of significant transactions involving health care providers that occur after April 1, 2024. This new California regulatory framework, which uses comprehensive standards for what constitutes a “significant transaction,” allows the state to scrutinize transactions that it determines have an adverse impact on competition or consumer choice in the health care market. And even more, it needs to be stopped. Those who engage in anticompetitive conduct or violate the pre-deal review process may be subject to injunctive relief and may be forced to pay government enforcement costs.
Moreover, California is just one state that has recently taken this stance. Connecticut and Massachusetts have each expressed concern about alleged anticompetitive practices in the health care industry. For example, in Connecticut, the state enacted HB 6669 in 2023 to increase competition, improve pricing transparency, and regulate transactions between pharmacy benefit managers and 340B covered entities. The company aims to reduce costs for Connecticut residents. This is in addition to the state’s own existing cost and market impact review process, which scrutinizes transactions by large hospitals, hospital groups or commercial buyers. Massachusetts similarly regulates market transactions through its Health Policy Commission. The Commission conducts cost and market impact reviews in the event of provider changes that may affect market competition. Additionally, Massachusetts has long relied on anti-steering and anti-stratification laws to prevent anti-competitive consolidation in the health care market. In short, both jurisdictions demonstrate the potential scope for oversight and enforcement at the state level.
This means those working in the health care industry must consider the potential for oversight and enforcement not only from the federal government but also from state governments. Especially for OHCA, California is her 5th largest economy in the world and home to over 11% of the US population. Therefore, healthcare organizations operating nationally should be aware of the regulatory landscape in California, just as in other regions. trying to regulate market transactions.
A final consideration is the upcoming 2024 presidential election. Task forces such as those in HCMC reflect the discretionary policy efforts of the current administration. The potential for change in leadership in the federal executive branch means that the survival of this new task force may not be guaranteed, and indeed, such a change could lead to a shift in priorities within the Department of Justice. Given this potentially dynamic situation, EBG will continue to monitor this area and new enforcement efforts. Companies operating in this area should consult with their counsel regarding how they should explain and support planned mergers and how they can successfully defend themselves if they choose to proceed with a merger.
