LegiStorm

Summary:

The federal antitrust laws are directed at insuring that markets remain competitive, with the ultimate goal of securing consumer welfare. Antitrust is a means of governing market behavior that is, in essence, the flip side of market regulation accomplished via regulatory oversight. Accordingly, any scheme that affects the functioning of a segment of the market by prescribing or proscribing the behavior of entities that participate in that segment may impact and be impacted by the antitrust laws. That is no less a given in the health care arena than in any other. This report will set out the antitrust laws that might be of concern in efforts to reform health care markets, to indicate some of the ways in which those laws might be applicable to health care market participants, and to raise questions about the laws' applicability to market participants who act in cooperation with or at the behest of the federal government. Restraint of trade, monopolization (as distinct from monopoly), predatory pricing, and price discrimination are among the behaviors considered unlawful under the antitrust laws; some joint activity by health care providers, therefore, could violate the antitrust statutes, especially if it impacts the prices to be paid for services—whether by purchasers (e.g., health plans, health insurers) or consumers. But the federal antitrust laws are not applicable to either the federal government or, pursuant to the antitrust "state action" doctrine, to the states qua states; there is not, therefore, likely to be much if any antitrust consequence to actions taken by federally or state-controlled or operated entities. On the other hand, applicability of the antitrust laws to entities established by either federal or state government, but not themselves designated as government bodies, however, is more nuanced: although there is ample case law prescribing the necessary prerequisites for "state-action" immunity to be conferred on private actors at the state level, there is practically none providing guidance concerning the extent to which (or whether), and the circumstances under which, the federal government can convey its antitrust immunity to private actors absent a specific grant of such immunity. Although the antitrust laws themselves are very brief and lacking in detail, there are literally hundreds of pages of case-law annotation to provide the detail lacking in the statutes. Moreover, the Department of Justice and the Federal Trade Commission have jointly issued Statements of Antitrust Enforcement Policy in Health Care, a document that provides specifics about the agencies' likely treatment of nine forms of collaboration by health care providers. Further, the Federal Trade Commission has responded to several queries about health care entities' plans to achieve "clinical integration," indicating that it would not prosecute the models presented to it unless the assumptions noted by the advocates (efficiency-enhancing potential likely resulting in lowered health care costs and improved health care outcomes) did not occur. The Commission has also asserted, however, in comments requested by state legislators on then-pending state legislation, that at least two of them (Mississippi's attempt to permit collective bargaining by health care cooperatives with health plans and New York's planned legislation to mandate/forbid certain activities by pharmacy benefit managers) would likely result in increased health care costs to consumers and/or decreased access to services. The report will be updated as necessary as the specifics of health care reform legislation become more concrete and it becomes possible to discuss the general principles provided here in the context of specific legislative language.