Alert: Affordable Care Act Brings Antitrust Enforcement to Health Care Providers

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April 12, 2013

On April 8, 2013, the U.S. Department of Justice (DOJ) announced a settlement with an association of 80% of all chiropractors in South Dakota. The settlement prohibits the association from jointly setting pricing or jointly negotiating contracts with insurers on behalf of competing chiropractors in South Dakota, North Dakota, Minnesota and Iowa. The settlement also requires the termination of current payer contracts.

Bill Baer, Assistant Attorney General in charge of the DOJ’s Antitrust Division remarked that the “settlement promotes competition among health care providers and prevents collective action that harms consumers and violates the antitrust laws.” 

Any person may submit written comments concerning the proposed settlement within 60 days of its publication to Peter J. Mucchetti, Chief, Litigation I Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 4100, Washington, D.C. 20530. After the conclusion of the 60-day comment period, the court may enter the final judgment upon finding that it serves the public interest. If the court is not convinced that the settlement is in the public’s best interests, then the court could reject the settlement. 

The same day that the settlement was announced, Secretary of Health and Human Services Kathleen Sebelius, remarking on the Affordable Care Act, explained: “For the first time ever in the history of the United States, they’ll have to compete for service and customers, not by cherry-picking the market (and) trying to figure out who can only insure people who promise never to get sick.” “There is a tight balance between a coordinated care strategy and a monopoly,” Sebelius also said.

This latest enforcement activity follows the DOJ’s October 20, 2011 Statement of Antitrust Policy Enforcement Regarding Accountable Care Organizations. In a press release describing the policy statement, the DOJ made clear that it “will continue to enforce vigorously the antitrust laws, consistent with the policy statement and with the goals of this innovative program to protect health care consumers from higher prices and lower quality care.”

The DOJ’s settlement with the association of chiropractors in South Dakota is an example of the DOJ’s commitment to enforcing the antitrust laws against health care providers. All providers who interact with associations of their competitors or work jointly with competitors, and especially those providers contemplating consolidation, should carefully analyze the antitrust risks. 
For more information, please contact your Briggs and Morgan attorney or a member of our Health Care practice group.