FTC Further Defines Clinical Integration


In their Statements of Antitrust Enforcement Policy in Health Care, the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice declared that joint negotiation of fees for services by competing healthcare providers could be justified either through (1) the sharing of significant financial risks among the providers or (2) the providers’ clinical integration. In a February 13, 2013 Advisory Opinion (the “Advisory Opinion”), the FTC further defined the clinical integration that would permit joint fee-setting by a physician hospital organization (“PHO”) that included competing physicians. For a PHO to negotiate common rates for competing participating providers, the keys for achieving clinical integration are:

- The development and implementation of detailed, evidence-based clinical practice guidelines;

- Limiting participation in the program to providers who are committed to accepting the limitations on independent decision-making which the guidelines entail;

- Measurement and evaluation of each participating provider’s compliance with the guidelines; and

- Investment by all participating providers of time, energy and financial resources in the development and enforcement of the clinical guidelines, as well as the computer infrastructure needed to facilitate such integration.

But achieving clinical integration only moves the joint pricing aspects of the arrangement from being per se unlawful to being assessed under the rule of reason. The effect of the clinically integrated network upon the availability of competitive alternatives to the clinically integrated network still needs to be evaluated to determine whether the pro-competitive benefits of the integrated network outweigh the loss of competition between the otherwise independent competing providers.

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