The Federal Trade Commission and the Department of Justice
(collectively, the Agencies) issued, on Oct. 20, 2011, the final
Statement of Antitrust Enforcement Policy Regarding Accountable
Care Organizations Participating in the Medicare Shared Savings
Program (the Policy Statement). The same day, the Centers for
Medicare and Medicaid Services (CMS) released the Final Rule governing accountable care
organizations (ACOs) under the Medicare Shared Savings Program (the
Shared Savings Program), as well as restated rules by the Internal
Revenue Services (IRS) and the Office of Inspector General on the
tax-exemption and antikickback implications, respectively, of the
Shared Savings Program for ACOs.
ACOs, a creature of the Patient Protection and Affordable Care Act
(PPACA), are collaborative healthcare provider networks. The Shared
Savings Program was intended to increase quality and decrease costs
for Medicare fee-for-service beneficiaries. The Policy Statement
articulates the Agencies' antitrust enforcement posture as it
relates to ACOs, providing "guidance [that will] help health
care providers form procompetitive ACOs and protect health care
consumers from higher prices and lower quality care,"
according to the Department of Justice.
The Policy Statement applies to joint venture provider networks
that intend to participate in the Share Savings Program. The Policy
Statement made two significant changes from an earlier proposed
version in response to public comment from the Agencies' March
2011 draft policy statement regarding the scope of its coverage and
types of entities covered.
The Policy Statement gives guidance on when the Agencies will apply
a "rule of reason" analysis, rather than imposing per se
liability, in pricing arrangements among separate entities that
form an ACO joint venture. Traditional antitrust principles forbid
naked price-fixing and market-allocation agreements as per se
anticompetitive (and, therefore, per se illegal). While the federal
government will set the terms and price of services provided under
Medicare, the Agencies provided guidance for ACOs when they are
also contracting in the private market. The Policy Statement
provides that joint price arrangements among competing healthcare
providers will be analyzed under a "rule of reason"
analysis where such agreement effectively promotes clinical
integration, which the agency considers a procompetitive
benefit.
The guidance provided by the Agencies for the Shared Services
Program has not differed greatly from their stated position in
prior antitrust safety zones and specific review letters on the
legitimacy of joint ventures seeking clinical integration to
coordinate fee schedules, although the definition of what
constitutes "clinical integration" has always been an
issue that eluded a single formulation. Commentators contended, and
the Agencies acknowledged, that "[c]linical
integration is needed to facilitate the coordination of patient
care across conditions, providers, settings, and time in order to
achieve care that is safe, timely, effective, efficient, equitable,
and patient-focused." The Agencies noted that, whatever form
clinical integration may take from time to time, entities that meet
federal requirements to become ACOs automatically meet that
definition.
The Policy Statement, as did its draft predecessor, provides an
antitrust "safety zone" for ACOs. To fall under this
"safety zone," an ACO's participants may not
collectively control more than a 30 percent share of common
services within a "primary service area." An ACO with
collective control of greater than 30 percent of a primary service
area may nonetheless be procompetitive and allowable, just not
protected in the "safety zone."
In the final Policy Statement, the Agencies expanded the Policy
Statement's scope of coverage. The draft policy statement
contemplated the Agencies' ACO enforcement policy as applying
only to healthcare networks formed after the March 23, 2010
enactment of the PPACA, which defined ACOs. Now, the Agencies'
Policy Statement encompasses all qualified provider networks that
plan to participate in the Shared Savings Program, regardless of
their formation date. A second and significant departure from the
draft Policy Statement was practical: it eliminated a mandatory
antitrust review by the Agencies as a precondition for
participation in the Shared Savings Program. Although eligibility
is not contingent on antitrust review at the onset, the Agencies
noted that they nonetheless maintain jurisdiction and oversight of
ACOs in the antitrust arena.
Along with the Policy Statement and guidance from the OIG and IRS,
the CMS Final Rule provides definitive regulatory direction for
ACOs. The Final Rule reflects comments from more than 1,300
stakeholders.
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