FTC Joins DOJ in Withdrawal of Healthcare Antitrust Guidelines

The FTC has now joined the DOJ Antitrust Division in withdrawing guidance relating to antitrust enforcement in healthcare. In February, the DOJ announced its withdrawal of three antitrust policy statements relating to healthcare. As anticipated, five months later, on July 14, 2023, the FTC withdrew two of these policy statements. The withdrawn statements provided safety zones for mergers, participation in exchanges of price and cost information, accountable care organizations, and joint purchasing arrangements, as well as guidance for activities that fell outside of the safety zones. The policy statements also provided a safety zone for participation in written surveys by healthcare providers. With the withdrawal by both federal antitrust Agencies, organizations can no longer point to these policy statements as a defense. However, the general principles from the statements are still good practice for healthcare companies, and the withdrawal of the statements does not change existing case law. It does continue to signal the Agencies’ increased enforcement in healthcare.

The Policy Statements

The three policy statements the DOJ withdrew are: Department of Justice and FTC Antitrust Enforcement Policy Statements in the Health Care Area (Sept. 15, 1993) (the “1993 Statements”); Statements of Antitrust Enforcement Policy in Health Care (Aug. 1, 1996) (the “1996 Statements”); and Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program (Oct. 20, 2011) (the “ACO Statement”). The DOJ withdrew all three, but the FTC withdrew only the 1996 Statements and the ACO Statement. The FTC did not withdraw the 1993 Statements, which were revised and expanded by the 1996 Statements, but that is not an indication it considers the older guidelines as still applicable. The 1996 Statements themselves express that they supersede the 1993 Statements.

The withdrawn policy statements provided useful guidance to healthcare organizations looking to collaborate, but not merge. For example, the policy statements provided that the Agencies would not challenge a joint venture among hospitals to purchase or share the ownership cost of high-technology healthcare equipment when only the number of hospitals necessary to support the equipment participated.

The policy statements were also used by companies outside of healthcare as guidance for certain activities such as benchmarking surveys. The 1996 Statements stated the Agencies would not challenge information exchanges managed by a third party involving information that was more than three months older, involved data of five or more firms, the data was anonymized, and no single firm constituted 25% of a statistic. Many industries beyond healthcare have come to rely on this safety zone for surveys, including trade associations.

In its press release announcing the withdrawal of the statements in February, the DOJ stated that the statements were “overly permissive” for certain topics such as sharing information. Prior to withdrawal, the DOJ’s Principal Deputy Assistant Attorney General Doha Mekki noted that due to data aggregation, pricing algorithms and other tools, information exchanges of aggregated data permissible under traditional guidance could harm competition. The FTC’s press release in July called the statements “outdated” and said that they no longer reflected market realities – a common theme for the FTC recently. The Agencies made it clear that they would not be publishing revised statements to replace these. The FTC stated that its “extensive record of enforcement actions, policy statements, and competition advocacy in healthcare provide more up-to-date guidance” and that enforcement will be conducted on a case-by-case basis.

The withdrawal of the policy statements creates additional uncertainty for healthcare industry participants navigating an aggressive enforcement climate. Based on the DOJ’s commentary around the time of its withdrawal, companies can expect additional scrutiny of information exchanges. Organizations should conduct an assessment of how they currently share information and how to minimize antitrust risk in situations where it is necessary for competitors to exchange information, such as mergers and collaborations. Organizations can also expect continued aggressive enforcement by the FTC and DOJ around mergers and collaborations as evidenced by the recent release of the new draft merger guidelines.

While the Agencies were not as pointed in their criticism of the withdrawn guidance relating to clinical integration or multi-provider networks, this conduct will not escape their scrutiny. The FTC indicated in its recent press release that the healthcare statements no longer reflect market realities. The FTC also pointed to enforcement actions and policy statements that provide more current guidance, so there is still more limited guidance organizations can rely on. Healthcare organizations and other companies should adhere to best practices to minimize antitrust risk.

Any collaborations with competitors (broadly defined) should be reviewed by antitrust counsel, and depending on the nature of the collaboration, organizations should justify it in the first instance from a U.S. antitrust standpoint.
Organizations should not share their competitively sensitive information with competitors, even through a third party or a consultant.
Since the degree of risk depends on the information being shared, there is less risk with older, aggregated information that cannot be disaggregated.
To facilitate a legitimate need to share competitively sensitive information with competitors, organizations can make use of “clean team” procedures through antitrust counsel.

Buchanan’s antitrust attorneys can help navigate these issues and the changing enforcement landscape.