Anti-Trust Waiver for ACOs

Physicians have long been terrified of anti-trust laws. Their professional associations, attorneys, consultants, and the media all warn them that any discussion of fees or participation in insurance networks could land them in jail.

For a layperson with no personal stake in the issue, these fears have always seemed excessive, near phobic. But that is easy for me to say — I’m not the one who has to risk jail or prolonged litigation. And the fear is genuine.

Going forward, it looks like doctors and hospitals will have more to fear from anti-trust laws — unless they agree to practice medicine the way the Obama administration thinks it should be practiced.

Writing in The Washington Post, Julie Appleby reports anti-trust enforcement is getting tougher. She writes:

“Amid growing concern about rising health-care costs, the Justice Department is stepping up efforts against hospitals and insurers that it suspects are illegally blocking competitors.”

She adds:

“…a recent settlement the government reached with a Texas hospital system has antitrust experts buzzing” (and) “In the past two years, the department also has settled with a group of Idaho orthopedists over allegations that they conspired to drive up prices and stopped the two biggest Lansing, Mich., insurers from merging, citing ‘a likelihood of unilateral price increases.’”

She concludes with:

“At a conference last May in Arlington, Justice antitrust chief Christine Varney promised an aggressive approach to challenging health-sector mergers and contracts used to keep out new rivals.”

Now all of this is very curious — one might say hypocritical — given the recent prohibition of new physician owned hospitals in the Affordable Care Act and the ongoing use of Certificate of Need restrictions on new hospitals in the states. It would seem that the government that is suddenly concerned about a lack of competition is the very same government that has restricted competition for decades.

But it is even more stunning that the same Justice Department that is pontificating about the lack of competition is also waiving antitrust laws for hospitals and physicians who agree to participate in Accountable Care Organizations. (See the new anti-trust policy statement released jointly by the Federal Trade Commission and Department of Justice)

Why? Because —

“The Federal Trade Commission and the Antitrust Division of the Department of Justice (the “Agencies”) recognize that ACOs may generate opportunities for health care providers to innovate in both the Medicare and commercial markets and achieve for many consumers the benefits Congress intended for Medicare beneficiaries through the Shared Savings Program.”

In other words, the Obama Administration likes ACOs and will waive the laws for them even while it toughens enforcement against other competitors. So, once again the politicians are picking the winners and losers and selectively enforcing the laws to reward their buddies.