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David Garcia is a partner in the Antitrust and Competition Practice Group in the firm's Century City office.

Like other players in the healthcare industry, physician groups are facing increased antitrust scrutiny from the Biden administration, with the Federal Trade Commission (the “FTC”) and Department of Justice, Antitrust Division (the “DOJ”) (together the “Agencies”) continuing to expand their enforcement focus to include all types of transactions involving physician groups, including both traditional combinations, as well as so-called vertical combinations with health systems, payors, and private equity investors.
Continue Reading Healthcare Antitrust Update: Key Antitrust Takeaways for Physician Groups

As it continues to grapple with the COVID-19 pandemic, the healthcare sector will face increased antitrust scrutiny from the Biden administration, with the Federal Trade Commission (the “FTC”) and Department of Justice, Antitrust Division (the “DOJ”) (together the “Agencies”) as the Agencies ramp up their reviews not just of “horizontal” transactions (i.e., deals between competitors), but also of “vertical” transactions (i.e., deals that combine market participants at different levels of the healthcare industry, such as payors, hospitals, and physician practices).
Continue Reading Vertical Deals in Healthcare: Key Antitrust Takeaways for Private Equity Firms

Category: Antitrust

On January 23, 2019, the U.S. Court of Appeals for the Third Circuit (“Third Circuit”) issued an opinion denying the Commonwealth of Pennsylvania the right to recover attorney’s fees after it had successfully blocked a hospital merger. The Third Circuit determined that the state had no federal statutory basis to be awarded attorney’s fees since the injunction had been granted under Section 13(b) of the Federal Trade Commission Act (“FTC Act”), which does not provide for attorneys’ fees, rather than Section 16 of the Clayton Act.

This case establishes binding precedent in the Third Circuit that state attorneys general will only have standing to seek attorneys’ fees in antitrust actions under the Clayton Act when the state actually litigates the case under that section. It also potentially has broader implications if other circuits decide to look to this decision as persuasive authority when deciding similar cases in their jurisdictions.
Continue Reading Third Circuit Rejects State’s Bid for Attorney’s Fees in Hospital Merger Dispute

On November 15, 2018, the Antitrust Division of the U.S. Department of Justice settled a two-and-a-half year long lawsuit against Atrium Health, a North Carolina hospital system formerly known as the Carolinas HealthCare System, enjoining Atrium’s anti-steering provisions against health plans. This article discusses the DOJ/Atrium settlement in light of the recent Ohio v. American Express Supreme Court decision, which concerned anti-steering provisions in the two-sided credit card network services market. We previously reported on the DOJ’s suit against Atrium here, and analyzed the implications of the SCOTUS Amex decision on health insurance here.
Continue Reading U.S. Department of Justice Settles Anti-Steering Suit Against Hospital System; First Such Settlement After Amex SCOTUS Decision

The Supreme Court recently established a new rule requiring plaintiffs to analyze both sides of a two-sided credit card market, which may be applicable to health insurance – arguably one of the biggest and most complex two-sided markets in the United States. There are a number of ongoing antitrust cases involving health insurance networks that may be susceptible to the type of two-sided market analysis required by the Supreme Court in Ohio v. American Express. David Garcia and Nadezhda Nikonova discuss the AmEx case, explain the economic rationale behind the rule, and analyze its possible applicability to healthcare antitrust cases.
Continue Reading AmEx Ruling May Have Big Impact on Health Insurance

California Attorney General Xavier Becerra filed a civil antitrust lawsuit in San Francisco County Superior Court on March 29, 2018 (the “Complaint”), alleging that Sutter Health (“Sutter”), one of Northern California’s largest healthcare providers, engaged in unlawful conduct in violation of California’s Cartwright Act (the “Act”).[1]  Sutter Health has a substantial healthcare network that includes: 24 hospitals, 35 outpatient centers, physician’s organizations with over 5,500 members, and over 12,000 other physicians who partner with Sutter.
Continue Reading California Sues Sutter Health Alleging Anti-Competitive Practices

The Seventh Circuit refused to revive an exclusive dealing claim by one hospital against its competitor because of an exclusivity agreement with an insurance plan. Judge Richard Posner wrote the short opinion strongly reiterating in the health insurance context the established principle that a competitor trying to attack vertical agreements under Section 1 of the Sherman Act will have an uphill struggle under the Rule of Reason. The case is Methodist Health Services Corp. v. OSF Healthcare System d/b/a Saint Francis Medical Center, No. 16-3791 (7th Cir. June 19, 2017).
Continue Reading Exclusive Agreement Between Hospital and Insurance Plan Does Not Violate Section 1

On April 28, 2017, the U.S. Court of Appeals for the D.C. Circuit upheld a February 8, 2017 decision by the U.S. District Court for the District of Columbia to block the $54 billion acquisition of Cigna Corp. by Anthem, Inc.. U.S. et al. v. Anthem Inc. et al., case number 17-5024, U.S. Court of Appeals for the District of Columbia Circuit.
Continue Reading Has the Acquisition of Cigna Corp. by Anthem, Inc. Been Relegated to the Dustbin of History? Stay Tuned!

The antitrust injury and antitrust standing defenses/doctrines are alive and well in healthcare.  A recent case, SCPH Legacy Corp. et al. v. Palmetto Health et al., shows that a competitor is not always the most legally appropriate plaintiff to bring an antitrust case, especially when the competitor’s alleged harm stems from increased competition.  This article explains the court’s reasoning and makes some predictions for similar arguments in the future.
Continue Reading Antitrust Not Always Available in Competitor Disputes in the Healthcare Sector

In what will undoubtedly be seen by all interested parties as a significant setback in the Federal Trade Commission’s active opposition to potentially anticompetitive healthcare collaborations, the FTC voted unanimously on Wednesday to dismiss its challenge to Cabell Huntington Hospital’s acquisition of St. Mary’s Medical Center – two hospitals serving patients in the Huntington area of West Virginia.  While the FTC continues to believe that the merger will result in significant anticompetitive harm, it chose to abandon the fight in light of the recent passage of West Virginia Senate Bill 597 (SB 597).
Continue Reading FTC Stands Down in Latest Head-to-Head Battle Between Federal and State Oversight of Healthcare Collaborations

On June 9, 2016, the Antitrust Division of the United States Department of Justice (“DoJ”) filed a complaint against the Charlotte-Mecklenburg Hospital Authority, d/b/a Carolinas Health Care System (“CHS”) in the United States District Court for the Western District of North Carolina. (United States of America and State of North Carolina v. Charlotte Mecklenburg Hospital Authority). The complaint accuses CHS of using “contract restrictions that prohibit commercial health insurers in the Charlotte area from offering patients financial benefits to use less expensive healthcare services offered by CHS’s competitors.” (Complaint, Preamble) In effect, the complaint is attacking a type of widely used contracting provision in which acute care hospital systems seek to prohibit insurance company payors from using “steering” restrictions, which would otherwise be used to steer their insured patients to lower cost healthcare providers, including lower-cost hospitals, in exchange for lower premiums in so-called “narrow network” insurance plans. The complaint then alleges that CHS has an approximately 50% share of the market for acute inpatient hospital care in the Charlotte metropolitan area, allegedly conferring market power on CHS.
Continue Reading U.S. Department of Justice Sues North Carolina Hospital System for Insisting on Anti-Steering Provisions in Insurance Reimbursement Contracts