Under ACA, practices risk tripping over antitrust regulations

CHICAGO – Probably the last thing on the minds of office-based physicians is whether they are running afoul of antitrust regulations.

However, according to Dr. Edward J. Diamond, a pulmonary specialist, a faculty member of the American College of Chest Physicians, and president of Suburban Lung Associates – a large network of pulmonary care offices near Chicago – physicians can add that to their list of concerns about the Affordable Care Act.

The danger zone, according to Dr. Diamond, is what’s known as "clinical integration": pooling patient and protocol data for the purpose of meeting the ACA’s data-driven call on providers to improve care and lower costs. This can be achieved for less when physicians in private practice band together, but it’s not as simple as a handshake, said Dr. Diamond.

The U.S. Department of Justice specifically defines clinical integration as a "network implementing an active and ongoing program to evaluate and modify practice patterns ... and create a high degree of interdependence and cooperation among the physicians to control costs and ensure quality..."

"You have to really adhere to this definition to avoid antitrust issues," said Dr. Diamond, who made his remarks at the annual meeting of the American College of Chest Physicians.

"The Statements of Antitrust Enforcement Policy in Health Care, issued jointly by the Federal Trade Commission and Department of Justice in 1996, carve out certain safety zones for physician network joint ventures," said Christopher Gordon, a specialist in health care antitrust law at Squire Sanders LLP in Washington.

Mr. Gordon said that the DOJ and the FTC "will typically not challenge an exclusive physician network joint venture where the participants share substantial financial risk and constitute 20% or less of the physicians in each specialty practicing in the relevant geographic market. Where the network is nonexclusive, that number rises to 30% or less."

If they are too large, or if they don’t keep to these predetermined percentages of competing physicians by specialty, groups of competing health care providers cooperating to make their ACA mandates could be in danger.

"Networks that fall outside these safety zones – either because they include a higher percentage of physicians or do not involve financial risk sharing – do not necessarily raise antitrust concerns, but instead will have their conduct reviewed under what is known as the "rule of reason" to determine whether, on balance, the conduct is anticompetitive or not," said Mr. Gordon.

"You have to be very careful you don’t end up accused of illegal collective bargaining," said Dr. Diamond. "There is a disconnect between what the Department of Justice and what the ACA are asking."

If not a disconnect, at least a proscribed field of play.

According to Mr. Gordon, providers have latitude in how they cooperate when it comes to developing clinical protocols and best practices, so long as that cooperation does not include pricing agreements among multiple, independent clinics. "Such conduct would arguably constitute a per se violation of the antitrust laws regardless of how small or big the clinics are," he said.

Although the justice department and the FTC are primarily focused on conduct that impacts commercial health insurance markets, fee schedules and reimbursements that are part of any Medicare Advantage plan are considered part of the marketplace, because these plans are offered by private insurers contracting with the federal government, Mr. Gordon said. Medicare proper, meanwhile, is unaffected by antitrust concerns because "its pricing is set by the government, so there is little or no risk that provider misconduct could impact those prices," he noted.

Whatever happens, said Dr. Diamond, to survive in the era of the ACA, providers who will thrive with clinical integration are those who can develop areas of expertise such as excellent electronic health record systems, which make them attractive partners to other clinics and health care facilities. "Be a friendly competitor," he said, Above all else, he added: "Embrace change."

Dr. Diamond reported having no disclosures.

[email protected]

CHICAGO – Probably the last thing on the minds of office-based physicians is whether they are running afoul of antitrust regulations.

However, according to Dr. Edward J. Diamond, a pulmonary specialist, a faculty member of the American College of Chest Physicians, and president of Suburban Lung Associates – a large network of pulmonary care offices near Chicago – physicians can add that to their list of concerns about the Affordable Care Act.

The danger zone, according to Dr. Diamond, is what’s known as "clinical integration": pooling patient and protocol data for the purpose of meeting the ACA’s data-driven call on providers to improve care and lower costs. This can be achieved for less when physicians in private practice band together, but it’s not as simple as a handshake, said Dr. Diamond.

The U.S. Department of Justice specifically defines clinical integration as a "network implementing an active and ongoing program to evaluate and modify practice patterns ... and create a high degree of interdependence and cooperation among the physicians to control costs and ensure quality..."

"You have to really adhere to this definition to avoid antitrust issues," said Dr. Diamond, who made his remarks at the annual meeting of the American College of Chest Physicians.

"The Statements of Antitrust Enforcement Policy in Health Care, issued jointly by the Federal Trade Commission and Department of Justice in 1996, carve out certain safety zones for physician network joint ventures," said Christopher Gordon, a specialist in health care antitrust law at Squire Sanders LLP in Washington.

Mr. Gordon said that the DOJ and the FTC "will typically not challenge an exclusive physician network joint venture where the participants share substantial financial risk and constitute 20% or less of the physicians in each specialty practicing in the relevant geographic market. Where the network is nonexclusive, that number rises to 30% or less."

If they are too large, or if they don’t keep to these predetermined percentages of competing physicians by specialty, groups of competing health care providers cooperating to make their ACA mandates could be in danger.

"Networks that fall outside these safety zones – either because they include a higher percentage of physicians or do not involve financial risk sharing – do not necessarily raise antitrust concerns, but instead will have their conduct reviewed under what is known as the "rule of reason" to determine whether, on balance, the conduct is anticompetitive or not," said Mr. Gordon.

"You have to be very careful you don’t end up accused of illegal collective bargaining," said Dr. Diamond. "There is a disconnect between what the Department of Justice and what the ACA are asking."

If not a disconnect, at least a proscribed field of play.

According to Mr. Gordon, providers have latitude in how they cooperate when it comes to developing clinical protocols and best practices, so long as that cooperation does not include pricing agreements among multiple, independent clinics. "Such conduct would arguably constitute a per se violation of the antitrust laws regardless of how small or big the clinics are," he said.

Although the justice department and the FTC are primarily focused on conduct that impacts commercial health insurance markets, fee schedules and reimbursements that are part of any Medicare Advantage plan are considered part of the marketplace, because these plans are offered by private insurers contracting with the federal government, Mr. Gordon said. Medicare proper, meanwhile, is unaffected by antitrust concerns because "its pricing is set by the government, so there is little or no risk that provider misconduct could impact those prices," he noted.

Whatever happens, said Dr. Diamond, to survive in the era of the ACA, providers who will thrive with clinical integration are those who can develop areas of expertise such as excellent electronic health record systems, which make them attractive partners to other clinics and health care facilities. "Be a friendly competitor," he said, Above all else, he added: "Embrace change."

Dr. Diamond reported having no disclosures.

[email protected]

CHICAGO – Probably the last thing on the minds of office-based physicians is whether they are running afoul of antitrust regulations.

However, according to Dr. Edward J. Diamond, a pulmonary specialist, a faculty member of the American College of Chest Physicians, and president of Suburban Lung Associates – a large network of pulmonary care offices near Chicago – physicians can add that to their list of concerns about the Affordable Care Act.

The danger zone, according to Dr. Diamond, is what’s known as "clinical integration": pooling patient and protocol data for the purpose of meeting the ACA’s data-driven call on providers to improve care and lower costs. This can be achieved for less when physicians in private practice band together, but it’s not as simple as a handshake, said Dr. Diamond.

The U.S. Department of Justice specifically defines clinical integration as a "network implementing an active and ongoing program to evaluate and modify practice patterns ... and create a high degree of interdependence and cooperation among the physicians to control costs and ensure quality..."

"You have to really adhere to this definition to avoid antitrust issues," said Dr. Diamond, who made his remarks at the annual meeting of the American College of Chest Physicians.

"The Statements of Antitrust Enforcement Policy in Health Care, issued jointly by the Federal Trade Commission and Department of Justice in 1996, carve out certain safety zones for physician network joint ventures," said Christopher Gordon, a specialist in health care antitrust law at Squire Sanders LLP in Washington.

Mr. Gordon said that the DOJ and the FTC "will typically not challenge an exclusive physician network joint venture where the participants share substantial financial risk and constitute 20% or less of the physicians in each specialty practicing in the relevant geographic market. Where the network is nonexclusive, that number rises to 30% or less."

If they are too large, or if they don’t keep to these predetermined percentages of competing physicians by specialty, groups of competing health care providers cooperating to make their ACA mandates could be in danger.

"Networks that fall outside these safety zones – either because they include a higher percentage of physicians or do not involve financial risk sharing – do not necessarily raise antitrust concerns, but instead will have their conduct reviewed under what is known as the "rule of reason" to determine whether, on balance, the conduct is anticompetitive or not," said Mr. Gordon.

"You have to be very careful you don’t end up accused of illegal collective bargaining," said Dr. Diamond. "There is a disconnect between what the Department of Justice and what the ACA are asking."

If not a disconnect, at least a proscribed field of play.

According to Mr. Gordon, providers have latitude in how they cooperate when it comes to developing clinical protocols and best practices, so long as that cooperation does not include pricing agreements among multiple, independent clinics. "Such conduct would arguably constitute a per se violation of the antitrust laws regardless of how small or big the clinics are," he said.

Although the justice department and the FTC are primarily focused on conduct that impacts commercial health insurance markets, fee schedules and reimbursements that are part of any Medicare Advantage plan are considered part of the marketplace, because these plans are offered by private insurers contracting with the federal government, Mr. Gordon said. Medicare proper, meanwhile, is unaffected by antitrust concerns because "its pricing is set by the government, so there is little or no risk that provider misconduct could impact those prices," he noted.

Whatever happens, said Dr. Diamond, to survive in the era of the ACA, providers who will thrive with clinical integration are those who can develop areas of expertise such as excellent electronic health record systems, which make them attractive partners to other clinics and health care facilities. "Be a friendly competitor," he said, Above all else, he added: "Embrace change."

Dr. Diamond reported having no disclosures.

[email protected]