Managing Antitrust Risks in
Care Collaborations
Sharon E. Caulfield, Esq.
Leading Age Annual Meeting + Nashville + October 22,2014
The ACA: Targeting the “Triple Aim”
 Improving the U.S. health care system
requires simultaneous pursuit of three aims:
 Improving the experience of care,
 Improving the health of populations, and
 Reducing per capita costs of health care
 Health Affairs 27, no. 3 (2008): 759–769;
10.1377/hlthaff.27.3.75
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The Triple Aim
Implementation
Conditions for
Success:
 enrollment of an
identified population,
 commitment to
universality for its
members, and
 an “integrator” that
accepts responsibility
for all three aims for
that population.
The Integrator’s Role:
 partnerships with
individuals and
families,
 redesign of primary
care,
 population health
management,
 financial
management,
 macro system
integration.
Drivers of the
Reform Environment
 The Integrator of Care will most likely be
Hospitals and Medicare Primary Care

If outside of Medicare: Supported by payors
 Value-based relationships

Cost:


Identify low cost or efficient providers
Quality:



Identify quality measurements
Chronic condition management
For LTC: focus on reducing hospital re-admits
 Focus: low cost high quality (where quality = predictable
results and reductions of inefficiency)
Reform Effect on Insurance Types:
More Consistent Environment
LICENSED INSURANCE REGULATED BY STATE
DIVISION OF INSURANCE
PRODUCTS
(inc. LTC insurance)
CONFORM TO FEDERAL
MANDATES AND
ADDITIONAL STATE
MANDATES
ERISA AND
GOVERNMENT
SPONSORED PLANS
REGULATED BY US
DEPARTMENT OF LABOR
CONFORM TO FEDERAL
MANDATES
GOVERNMENT
PROGRAMS
(MEDICARE,
MEDICAID)
REGULATED BY US
DEPARTMENT OF
HEALTH AND HUMAN
SERVICES
CONFORM TO FEDERAL
MANDATES
FEDERAL: TAX EXEMPT,
MEDICARE
PATCH WORK OF LAWS
& REGULATIONS
UNINSURED
STATES: VARY
5
Health Care Reform – New Payment
Paradigms on Top of Ongoing Systems
 “New” systems
 Ongoing systems





Medicare/aid Fee for
service
Critical Access Hospital,
ESRD, etc. cost-based
reimbursement
ASC reimbursements
Commercial payor FFS
contracts
Continuation of Medicare
Part C and D plans




www.celaw.com
“Shared Savings Model”
of PPACA
MedPAC hospital
proposal: “two-sided
model”
MedPAC post acute care
– bundled payments:
http://seniorhousingnews.com/2
013/06/14/medpac-bundlingpay-for-post-acute-care-is-thegateway-to-reform-2
http://innovation.cms.gov/initiati
ves/bundled-payments
Medicare Shared Savings Program
Accountable Care Organizations
 ACOs are health care providers that have
organized into a legal structure that agree to
be accountable for the quality, cost, and
overall care of Medicare beneficiaries who
are assigned to the ACO
ACO Shared Savings Proposal
When Medicare ACO meets or exceeds spending targets for its
population, it is rewarded with a share of the overall savings
Shared Savings*
*Algorithm for shared savings has not been determined
8
Compliance & Legal Challenges for ACOs
Not many have been formed due to complexity
State
Reform
Federal
Reform
Accountable Care
Organizations
Stark
Insurance
Regulation
Anti-Kickback
Tax
Exemption
Credentialing
Antitrust
Tax
Peer
Review
Protection
9
So -- Not doing an ACO?
 Bundled Payment Initiative
 Working with commercial payors
 This may require developing a joint venture or
other collaborative organization to share
information about care systems, costs, and
quality
 Take Care: There are antitrust risks
Antitrust regulators are not
slacking under the ACA
Statement of Antitrust Enforcement Policy
regarding Accountable Care Organizations
Participating in the Medicare Shared Savings
Program
www.justice.gov/atr/public/health-care/276458.pdf
October 2011
Addresses also informal ACOs, not just MSSP ACOs
“The Agencies will vigilantly monitor complaints about an ACO’s
formation or conduct and take whatever enforcement action may
be appropriate.”
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Antitrust Enforcement post-ACA:
A Continuation of Prior Policy
See -- Statements of Antitrust Enforcement
Policy in Healthcare (1996)
www.ftc.gov/reports/hlth3s.pdf
What’s ok? The 2011 Statement reiterates:
“An ACO that does not impede the functioning of a
competitive market will not raise competitive
[compliance] concerns.”
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Avoiding Antitrust Problems
 What Post-Acute Providers Need to Know
Key issues
= Price fixing
= Interference with market forces
Both Federal and State enforcement activities are
possible
Key Antitrust Concepts
Price Fixing:
 Contract,
combination or
Conspiracy
 Among Competitors
 In Restraint of Trade

 Monopolization:
 Using a monopoly or
conspiring to
monopolize
 Effect is restraint of
trade

(A single integrated
entity cannot
compete with itself)
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(Monopoly power
generally 30% of the
geographic or
product market)
Safety Zones per 2011 Antitrust
Enforcement Policy
 Avoid monopoly power:


Single provider of each service line has 30%
or less of the work within the service area
If there is a dominant provider, e.g. the
hospital, the hospital is non-exclusive with this
collaborative group
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Good Guidance to Show
General Antitrust Awareness
 Avoid:

Sharing competitive information that is not
necessary for the collaboration


E.g. pharmacy or labor pricing
Setting specific prices for services among
competitive, non-integrated post-acute care
providers – NO to Price Fixing

E.g. a standardized per diem rate, a standard rate
for outpatient physical therapy, a standard
transportation rate, without integration
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Good Guidance to Show
Antitrust Awareness
 Demonstrate:


Comparative Effectiveness and Quality Data
Benefits Management for Cost Control


Patient Care Improvements


E.g. pharmacy, chronic diseases, claims integrity
Shared communications, technology, data,
physician/staff education
Additional Services Enabled by Collaboration

E.g. home care followup; nutritional services,
family support
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THANK YOU!
Sharon E. Caulfield, Esq.
Caplan and Earnest LLC
1800 Broadway, #200
Boulder, CO 80302
303-443-8010
[email protected]
www.celaw.com
www.celaw.com