Highlights From the ABA/AHLA Antitrust in Healthcare Conference

by Manatt, Phelps & Phillips, LLP

Manatt, Phelps & Phillips, LLP

On May 17–18, 2018, the American Bar Association (ABA) and American Health Lawyers Association (AHLA) hosted their biannual Antitrust in Healthcare Conference in Arlington, Virginia. The conference featured programs on a range of topics, including horizontal collaborations, hospital mergers, vertical arrangements, certificates of public advantage and pharmaceutical “pay-for-delay” agreements. Several representatives from the antitrust enforcement agencies—including the Antitrust Division of the Department of Justice (DOJ), the Federal Trade Commission (FTC) and the National Association of Attorneys General—provided their views on healthcare antitrust enforcement in keynote speeches and on panels. Below is a summary of the highlights from enforcer presentations.

DOJ: Criminal Enforcement Takes Top Billing

Keynote Speech From Deputy Assistant Attorney General for Antitrust

The conference opened with a speech by Barry Nigro, Deputy Assistant Attorney General for the DOJ. Nigro stressed that “few, if any, segments of our economy merit higher enforcement priority when it comes to antitrust enforcement” than the healthcare sector, due to its size and importance to the economy, as well as the fact that increased costs can mean lost lives.

The DOJ is particularly focused on criminal enforcement. Its efforts in this area include investigations into price-fixing, bid-rigging and market-allocation agreements in the generic pharmaceuticals industry. The first charges were filed in 2016 over an antibiotic and a diabetes medication, and both led to guilty pleas. In addition, Nigro mentioned that the DOJ is involved in ongoing criminal investigations involving employee “no-poach” agreements. These investigations also have been highlighted on other occasions by Assistant Attorney General for Antitrust Makan Delrahim.

In his keynote, Nigro stressed that the Antitrust Division has also been active on the civil side. For example, he discussed the DOJ’s victories in the two health insurance merger litigations last year, noting that Anthem’s proposed $54 billion acquisition of Cigna would have been the largest proposed healthcare transaction in history. (For a more detailed discussion of the health insurance mergers, please see our February 2017 and March 2017 “Health Update” articles.) In the wake of those failed mergers, Nigro also mentioned the DOJ’s investigation of the Cigna-Express Scripts deal and the CVS-Aetna transactions but did not comment on these ongoing investigations.

The DOJ also continues to challenge anticompetitive conduct. For example, the DOJ is currently in litigation against Atrium Health (formerly known as Carolinas HealthCare System) over its anti-steering restrictions to prevent insurers from directing consumers to lower-cost providers. According to the DOJ, Atrium used the anti-steering restrictions to protect itself from price competition. The case is currently in expert discovery and scheduled for trial in May 2019. (For a more detailed discussion of the case, please see our April 2017 article.)

In addition, Nigro discussed the DOJ’s advocacy efforts. The DOJ and FTC often jointly advocate against certificate of need laws because they primarily benefit incumbent market participants who can take advantage of these laws to delay or block competition. (Certificates of need (CONs) are legal documents required in many states and federal jurisdictions before proposed expansions, acquisitions or creation of facilities are allowed. CONs are required by 35 states for the construction of medical facilities.) Meanwhile, consumers may be harmed by having to travel further for care and not reaping the benefits of lower prices and increased quality that accompany competition.

The DOJ’s advocacy efforts also focus on licensing and certification for healthcare providers, whether on behalf of a state or a private self-regulatory body. While licensing requirements can serve an important public safety function, they also can be used by rivals as a means of imposing unnecessary entry barriers and limiting competition. Together with the FTC, the DOJ has urged state legislatures to balance the need for licensing with harm to competition. As an example, Nigro mentioned the agencies’ advocacy regarding telehealth laws in Michigan and restrictions on what services optometrists can provide in Massachusetts and Puerto Rico. In order to be beneficial, these state laws need to set safety standards by objective means related to health and ensure that any restrictions are narrowly tailored.

Comments From Chief of Healthcare and Consumer Products Section

The conference featured an enforcer panel, including Peter Mucchetti, Chief, Healthcare & Consumer Products Section for the DOJ. Mucchetti provided additional insights into the DOJ’s civil enforcement cases, as well as into the insurance company mergers.

Mucchetti discussed the DOJ’s case against Henry Ford Allegiance Health (Allegiance) and three rival hospitals in a neighboring county in South Central Michigan over allegations that they conspired to restrict marketing. The DOJ pursued these agreements as per se illegal (not requiring proof of anticompetitive impact). According to Mucchetti, the agreement between the four hospitals not to advertise in each other’s territories is likely to have an adverse effect on hospital competition and quality: The beneficiary of the agreement knows that it does not need to compete and therefore has less incentive to improve its operations, and the nonadvertising party will not make investments in an area if it cannot advertise the improvements. Consumers therefore lose, because the parties are competing less intensely, and they do not get the information that they need to make the best healthcare decisions.

The DOJ believed it could win the case at trial principally because of the hospitals’ internal documents, which specifically referenced the marketing agreement. The DOJ settled with Allegiance in February 2018 after already settling with the other three hospitals. (For more information, please see our “Health Update” article from June 2017.)

Mucchetti also addressed the insurer mergers as a major and historic DOJ accomplishment. The DOJ had never seen two such big deals tried at the same time. The cases have provided the DOJ with a basis for health insurer cases going forward. The DOJ now has three court opinions—including one appellate—all agreeing with the DOJ’s positions on market definition and competitive effects. For example, the courts accepted the DOJ’s market definitions for individual market, Medicare Advantage, and large accounts for employers across the country. The opinions were also favorable to the DOJ regarding the difficulty of entry for new entrants seeking to compete due to barriers from reputation, brand and geographic coverage: Large employers need national products, which can be hard for a new entrant to develop.

FTC: 14 Active Healthcare Matters

The enforcer panel also featured remarks from Ian Conner, Deputy Director, Bureau of Competition, FTC. Conner stated that the FTC is very active in antitrust and healthcare matters, and currently has 14 very active healthcare matters. Two out of the five trials that the FTC has scheduled for this year are in the healthcare industry. These figures do not include the appeal in the North Dakota Sanford merger case and the FTC’s recent settlement with Impax Laboratories over a pay-for-delay agreement concerning generic drugs. (For more information on the Sanford Health case, please see our article “The FTC Continues to Challenge Healthcare Mergers.”)

Conner noted that parties should not be shocked when the FTC challenges a deal to buy their main competitor. Ever since its 2007 victory against Evanston Northwestern Healthcare, the FTC has been on a winning streak. The FTC has focused on identifying how the transactions harm consumers, and the courts have agreed on the right test to define markets. In particular, courts have accepted that payers are the entities trying to assemble networks and determine which hospitals they need.

Conner recommended that merging parties look closely at industry dynamics. There is now fairly well-developed case law in the Third, Seventh and Ninth Circuits regarding how to approach merger analysis. In particular, Conner discussed the Third Circuit’s helpful holding that long- term contracts between insurers and hospitals will not solve anticompetitive problems. If parties sign a five-year contract not to raise rates, the courts and agencies will ask what happens at the end of the five-year term.

Conner also reminded the audience that the FTC has a history of challenging consummated mergers, particularly in healthcare. Both the DOJ and the FTC believe that regulation is not a substitute for competition—and competition is superior to regulation. Despite the heavy case burdens imposed on the agencies recently, neither has cleared a transaction due to lack of resources.

State Attorneys General: Focusing on Healthcare as a Local Issue

The final panelist on the enforcer program was Victor Domen, Senior Antitrust Counsel, Office of the Attorney General, Nashville, Tennessee, who is also Chair of the National Association of Attorneys General (NAAG) Antitrust Task Force. He noted that state Attorneys General (AGs) are active in healthcare antitrust and, while they value working with the federal agencies, they are not afraid to proceed on their own. AGs recently have filed antitrust cases on healthcare issues without the FTC or DOJ in both California and Washington.

While there was some disagreement between Domen and the federal regulators on state action issues, the FTC and DOJ generally work very closely with AGs, have good relationships with them and freely share information. For healthcare matters generally, cooperation between the state and federal enforcers is necessary, because healthcare’s impact is very local. Coordination between AGs and federal regulators provides additional attorneys and resources that can be used to tackle more complex cases that generate a significant number of documents. Additionally, the AGs have good relationships with relevant state agencies, such as Departments of Insurance, which also can be important resources.

Domen highlighted that the AGs keep tabs on physician practice acquisitions, using their knowledge of local deals to step in on nonreportable transactions. States are ready to intervene whenever a transaction, such as the Sanford Health deal, results in a market share that is greater than about 80%. As Domen explained, if the numbers look bad on paper, the deal is probably going to look bad to the AGs. Domen urged parties considering transactions to look at the data and talk to their antitrust counsel before pursuing the deal. The cases that the AGs pursue are not close calls. Other market participants are going to complain to the AGs if an acquisition pushes market share beyond 80%.

Domen also addressed certificates of public advantage (COPAs), using the Wellmont-Mountain States transaction as an example. COPAs do not involve a pure competition analysis. Rather, they can address broader concerns—and have a large public health component. Domen stressed that the two nonprofit systems in the Wellmont-Mountain States case underwent a complicated certification process and will be monitored closely by the AG. (For more information on COPAs, please see our April 2018 article, “DSRIP Antitrust Considerations: The Case for a COPA.”)


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Manatt, Phelps & Phillips, LLP | Attorney Advertising

Written by:

Manatt, Phelps & Phillips, LLP

Manatt, Phelps & Phillips, LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide

JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at www.jdsupra.com) (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

Please note that if you subscribe to one of our Services, you can make choices about how we collect, use and share your information through our Privacy Center under the "My Account" dashboard (available if you are logged into your JD Supra account).

Collection of Information

Registration Information. When you register with JD Supra for our Website and Services, either as an author or as a subscriber, you will be asked to provide identifying information to create your JD Supra account ("Registration Data"), such as your:

  • Email
  • First Name
  • Last Name
  • Company Name
  • Company Industry
  • Title
  • Country

Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

How do we use this information?

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

  • Operate our Website and Services and publish content;
  • Distribute content to you in accordance with your preferences as well as to provide other notifications to you (for example, updates about our policies and terms);
  • Measure readership and usage of the Website and Services;
  • Communicate with you regarding your questions and requests;
  • Authenticate users and to provide for the safety and security of our Website and Services;
  • Conduct research and similar activities to improve our Website and Services; and
  • Comply with our legal and regulatory responsibilities and to enforce our rights.

How is your information shared?

  • Content and other public information (such as an author profile) is shared on our Website and Services, including via email digests and social media feeds, and is accessible to the general public.
  • If you choose to use our Website and Services to communicate directly with a company or individual, such communication may be shared accordingly.
  • Readership information is provided to publishing law firms and authors of content to give them insight into their readership and to help them to improve their content.
  • Our Website may offer you the opportunity to share information through our Website, such as through Facebook's "Like" or Twitter's "Tweet" button. We offer this functionality to help generate interest in our Website and content and to permit you to recommend content to your contacts. You should be aware that sharing through such functionality may result in information being collected by the applicable social media network and possibly being made publicly available (for example, through a search engine). Any such information collection would be subject to such third party social media network's privacy policy.
  • Your information may also be shared to parties who support our business, such as professional advisors as well as web-hosting providers, analytics providers and other information technology providers.
  • Any court, governmental authority, law enforcement agency or other third party where we believe disclosure is necessary to comply with a legal or regulatory obligation, or otherwise to protect our rights, the rights of any third party or individuals' personal safety, or to detect, prevent, or otherwise address fraud, security or safety issues.
  • To our affiliated entities and in connection with the sale, assignment or other transfer of our company or our business.

How We Protect Your Information

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at privacy@jdsupra.com.

Children's Information

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to privacy@jdsupra.com. We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to privacy@jdsupra.com.

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at: privacy@jdsupra.com.

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at www.jdsupra.com) (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit legal.hubspot.com/privacy-policy.
  • New Relic - For more information on New Relic cookies, please visit www.newrelic.com/privacy.
  • Google Analytics - For more information on Google Analytics cookies, visit www.google.com/policies. To opt-out of being tracked by Google Analytics across all websites visit http://tools.google.com/dlpage/gaoptout. This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.