Healthcare Law Blog : Medical Groups, Health Plans, Hospital & Facility Lawyers & Attorneys: Sheppard Mullin Law Firm

By David R. Garcia and Helen C. Eckert 

Just three days after the Federal Trade Commission, jointly with the Pennsylvania Attorney General, issued an administrative complaint challenging Reading Health System’s (RHS) proposed acquisition of Surgical Institute of Reading L.P. (SIR), a 15-bed surgical specialty center, both entities abandoned the proposed acquisition, citing the high costs associated with a protracted court battle with the government. This FTC victory provides more valuable insight into how antitrust enforcement agencies are evaluating the increasing number of consolidations within the healthcare industry, particularly after passage of the Affordable Care Act. Specifically, this case highlights the government’s very granular analysis of effects on competition through highly specialized “service markets,” as well as the risk for entities that ordinary-course-of-business documents surrounding the proposed consolidation can play a significant role in the government’s challenge. It also appears to be another example of an FTC challenge to a transaction below the Hart-Scott-Rodino reporting threshold.

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By David Garcia and Helen Eckert

In the first challenge against anticompetitive unilateral conduct since 1999, the Department of Justice reached a proposed settlement with a Texas hospital to enjoin it from entering into exclusionary contracts that effectively prevented commercial health insurers from also contracting with the hospital's rivals. 
 

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By Neil Ray

In May 2010, Assistant Attorney General in charge of the Department of Justice's (DOJ) Antitrust Division, Christine Varney, referred to the essential role that antitrust has in preserving and protecting competition which together with regulation can be harnessed to expand coverage, improve quality and control the cost of health care.   
 

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By Heather M. Cooper

I. Introduction

Thanks to a recent federal district court decision, physicians and medical staff have more reason to think twice about price and other arrangements adopted by the practice associations and clinics to which they belong. Last Spring, the United States District Court for the Eastern District of California held that a hospital and a physicians practice association, and a hospital and the physicians that provide services to it under contract, may be sufficiently distinct separate economic actors capable of conspiring with each other under Section 1 of the Sherman Act.[1] The court denied a motion to dismiss a complaint that alleged that a hospital and two independent physician practice associations conspired to restrain trade in violation of Section 1 of the Sherman Act by prohibiting neonatologists who did not agree to practice exclusively at the hospital or refer cases to doctors practicing exclusively neonatology at the hospital, from using the hospital's neonatal intensive care unit (“NICU”).
 

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By Helen Cho Eckert

On April 24, 2009, a group of professors of law, economics and business, together with the American Antitrust Institute, the Public Patent Foundation, and AARP (collectively "amici") filed an amicus brief urging the Supreme Court to grant certiorari and reverse the decision of the Federal Circuit Court of Appeals in In re Cirpoflaxacin Hydrochloride Antitrust Litigation, 544 F.3d 1323 (Fed. Cir. 2008) ("Cipro"). This is the latest advance in the heated debate over the legality of reverse payment settlements in the pharmaceutical industry, i.e., settlements of patent disputes in which the brand-name pharmaceutical company makes a "reverse" or "exclusion" payment to the would-be generic competitor to delay its entry into the relevant drug market. Such settlements have garnered significant attention and debate over the years because they implicate important policy considerations underlying antitrust and patent laws, as well the vital public interest in curbing soaring healthcare costs.
 

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By Jennifer M. Driscoll-Chippendale

In a Business Review Letter dated April 26, 2010, the U.S. Department of Justice, Antitrust Division (hereinafter, “the Division”) stated that it would not challenge a data sharing program proposed by three health care associations located in California. From the Division’s vantage point, the program posed little risk of facilitating anticompetitive conduct; rather, the most likely effect of the program would be to increase transparency about the relative costs and utilization rates of hospitals that participated in the survey.
 

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By Robert Magielnicki

In a May 24, 2010 speech to the Antitrust in Healthcare Conference, Christine A. Varney, the Chief of DOJ's Antitrust Division, emphasized the importance of antitrust enforcement in preserving vigorous competition in health insurance markets, and of encouraging innovation and efficiency in health care delivery while preserving competitive markets.

 

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By Jennifer Driscoll-Chippendale

In a Business Review Letter[1] dated April 26, 2010, the U.S. Department of Justice, Antitrust Division (hereinafter, “the Division”) stated that it would not challenge a data sharing program proposed by three health care associations located in California. From the Division’s vantage point, the program posed little risk of facilitating anticompetitive conduct; rather, the most likely effect of the program would be to increase transparency about the relative costs and utilization rates of hospitals that participated in the survey.
 

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By Donald Klawiter, Jennifer Driscoll-Chippendale and Malika Levarlet

Overview

• Congress recently conducted hearings on proposed legislation that would repeal the insurance exemption from the federal antitrust laws, the McCarran-Ferguson Act of 1945, as it relates to the health insurance industry.
   
• Witnesses at the hearings articulated different perspectives on the potential repeal. At one end of the spectrum, there was a call to end the exemption and increase federal oversight of the health insurance industry for the benefit of both competition and consumers. In contrast, at least one witness suggested that repeal would at best maintain status quo in the market or, worse, deter activities that enhance industry efficiency.
   
• On October 21, the House Judiciary Committee voted 20-9 to approve legislation aimed at repealing the antitrust exemption for health insurers. The Committee endorsed a middle-of-the-road approach by including safe harbors that permit joint action for data pooling and actuarial calculations.

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