The most recent effort by the Biden Administration to “modernize” antitrust policy and enforcement involves withdrawing decades of guidance for the health care industry. On February 2, 2023, the U.S. Department of Justice (“DOJ”) withdrew three longstanding policies that provided key antitrust guidance to the health care industry: the 1993 DOJ and Federal Trade Commission (“FTC”) Antitrust Enforcement Policy Statements in the Health Care Area (“Enforcement Statements”); the 1996 Statements of Antitrust Enforcement Policy in Health Care (“Policy Statements,” which revised the Enforcement Statements); and the 2011 Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations [“ACOs”] Participating in the Medicare Shared Savings Program.1 The FTC has not yet followed suit to withdraw these policies.
According to the press release, the DOJ “has determined that the withdrawal of the three statements is the best course of action for promoting competition and transparency… . The statements are overly permissive on certain subjects, such as information sharing, and no longer serve their intended purposes of providing encompassing guidance to the public on relevant healthcare competition issues in today’s environment.”2 DOJ Assistant Attorney General Kanter stated that “[t]he healthcare industry has changed a lot since 1993, and the withdrawal of that era’s out of date guidance is long overdue.” There is no indication that the agency will update the guidance. Rather, the DOJ indicates that it will take a “case-by-case enforcement approach,” and that “[r]ecent enforcement actions and competition advocacy in healthcare provide guidance to the public.”3
The move comes on the heels of a February 2 policy speech by Principal Deputy Assistant Attorney General Doha Mekki, who explained why DOJ believes the information-sharing safety zone is out-of-date:
Over the nearly 30 years during which those statements have been in effect, we have learned that concerning anticompetitive conduct can nonetheless satisfy many if not all of the safety zones’ factors. We have seen the safety zones be misinterpreted. Sometimes they are misapplied to other contexts or industries that were never contemplated by the guidance. Moreover, markets have evolved well beyond the context in which the safety zones, and some of the guidance more broadly, were articulated.4
Although some may have been surprised by the DOJ’s withdrawal, this move appears to be part of a deliberate, sustained effort to substantially revise antitrust policy. The DOJ has been active in actions against interlocking directorates5, asserting novel vertical theories in civil merger enforcement6 and new forms of criminal enforcement.7 In addition, the DOJ and FTC have both indicated that new horizontal merger guidelines are forthcoming, which would be consistent with the withdrawal of the Enforcement Statement and Policy Statements, which contained a safe harbor for certain small hospital mergers.8 These actions are consistent with President Biden’s Executive Order outlining how his administration will aggressively use the antitrust laws to address issues in the American economy.9
The withdrawal of the guidance, nonetheless, creates disruption and uncertainty in the healthcare marketplace. With no more safe harbors or guidelines, companies are now in uncharted waters as to whether a merger, joint venture, clinically integrated network, participation in ACOs, or even a group purchasing organization, which previously would have passed legal muster, would be permissible in this new regime.
The practical takeaway is that healthcare clients need to take a proactive, introspective approach by revisiting their antitrust compliance policies, especially with regard to any information exchanges through collaborations or trade associations. Clients should also engage antitrust counsel to review all healthcare transactions that would have previously relied upon the guidance set forth in any of the three withdrawn policies.
1 February 2, 2022 DOJ Press Release, “Justice Department Withdraws Outdated Enforcement Policy Statements,” available at https://www.justice.gov/opa/pr/justice-department-withdraws-outdated-enforcement-policy-statements.
2 Id.
3 Id.
4 February 2, 2022, “Principal Deputy Assistant Attorney General Doha Mekki of the Antitrust Division Delivers Remarks at GCR Live: Law Leaders Global 2023,” available at https://www.justice.gov/opa/speech/principal-deputy-assistant-attorney-general-doha-mekki-antitrust-division-delivers-0.
5 November 3, 2022 Polsinelli Client Alert, Promise Made, Promise Kept: The Justice Department Follows Through With Interlocking Directorate Enforcement,” available at https://www.polsinelli.com/arindam-kar/publications/promise-made-promise-kept-the-justice-department-follows-through-with-interlocking-directorate-enforcement.
6 See U.S. et al. v. United Health Group, Inc. and Change Healthcare, Inc., available at https://www.justice.gov/atr/case/us-et-al-v-unitedhealth-group-inc-and-change-healthcare-inc (appeal pending).
7 November 7. 2022 Polsinelli Client Alert, “No Agreement? No Worries: Justice Department Secures Historic Criminal Attempted Monopolization Conviction,” available at https://www.polsinelli.com/arindam-kar/publications/no-agreement-no-worries-justice-department-secures-historic-criminal-attempted-monopolization-conviction
8 See January 18, 2022 FTC Press Release, “Federal Trade Commission and Justice Department Seek to Strengthen Enforcement Against Illegal Mergers,” available at https://www.ftc.gov/news-events/news/press-releases/2022/01/federal-trade-commission-justice-department-seek-strengthen-enforcement-against-illegal-mergers.
9 July 9, 2021 “Executive Order on Promoting Competition in the American Economy,” available at https://www.whitehouse.gov/briefing-room/statements-releases/2021/07/09/fact-sheet-executive-order-on-promoting-competition-in-the-american-economy/.
