FTC/DOJ Issue Joint Proposed Statement Of Antitrust Enforcement Policy Relating To ACOs

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Introduction

On March 31, 2011, contemporaneously with the Centers for Medicare & Medicaid Services (CMS) release of proposed regulations regarding the formation of Accountable Care Organizations (ACOs), the Federal Trade Commission (FTC) and Department of Justice (DOJ and, with the FTC, each an Agency and, collectively, the Agencies) issued a joint Proposed Statement of Antitrust Enforcement Policy Regarding ACOs Participating in the Medicare Shared Savings Program (Policy Statement). This article summarizes the key provisions of the Policy Statement and its implications for ACO participants.

Summary

In sum, the Policy Statement provides that the Agencies will deem any ACO CMS qualifies for participation in the Medicare Shared Savings Program to be sufficiently integrated such that the activities of the ACO participants who contract with commercial payors will be judged under the rule of reason and not the per se standard of illegality–for as long as the ACO participates in the Medicare Shared Savings Program. In addition, the Agencies establish a safety zone providing that, absent extraordinary circumstances, the Agencies will not challenge an ACO comprised of independent ACO participants that provide a common service where the ACO’s combined share of the common service is 30 percent or less in each ACO participant’s primary service area (PSA). If the ACO’s combined share of any common service is more than 50 percent in any ACO participant’s primary service area, the ACO must undergo mandatory Agency review prior to applying to CMS for participation in the Medicare Shared Savings Program. An ACO that has a PSA share for any common service that exceeds 30 percent but is 50 percent or less may, but is not required to, seek Agency review. The attached flow chart identifies how the Agencies appear to be applying the Policy Statement to ACOs depending on their composition.

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