Can an ACO Violate the Antitrust Laws?
By Ruder Ware Alumni
June 21, 2018
This may not be obvious to people who do not keep track of the Federal Trade Commission (FTC)/Department of Justice antitrust enforcement policy, but an enforcement action has never been published involving an Accountable Care Organization (ACO) that participates in Managed Security Service Provider (MSSP) or another federal health care program. The reason for the dearth of enforcement actions probably flows from the federal policy favoring and encouraging clinically integrated organizations that participate in federal programs designed to change the reimbursement paradigm from fee for service to value-based reimbursement. In fact the MSSP regulations as well as other similar programs such as The Next Gen ACO program include waivers and/or antitrust guidance that generally qualify participating ACOs as meeting antitrust clinical integration requirements. The end result is that ACOs will ordinarily be judged under a “rule of reason” rather than a “per se” antitrust analysis.
Antitrust guidance that was proposed in 2011 created three levels of potential antitrust inquiry for ACOs. A safety zone was proposed where market share did not exceed 30 percent; 50 percent in certain rural areas. Together with an exception for rural ACOs and special treatment for dominant provider situations, very few ACOs failed to qualify within the safety zone. ACOs with more than 50 percent market share that did not qualify for the special rural or dominant provider qualification were to be subject to mandatory review resulting in either a challenge determination or a statement that the ACO was not likely to be challenged. ACOs that did not qualify for the safety zone and were not subject to mandatory review could elect to seek review by the FTC.
The proposed regulations resulted in significant industry push-back. When the guidance was finally published the enforcement standards were greatly reduced. For example, the mandatory review category was abandoned in favor of an agency notice and permissive review. The elimination of the mandatory review category had the end result of almost completely removing the agency’s review function for ACOs. Agency review was relegated to a potential risk mitigation device of which few ACOs decided to use.
The course the ACO guidance took resulted in very little potential ACO antitrust exposure. Sure, the FTC still has the ability to challenge an ACO on antitrust grounds, but the federal policy favoring clinical integration and federal program participation makes it unlikely that an enforcement action would be brought against an ACO absent some serious anti-competitive behavior. Provider collaborative entities that are not qualified as ACOs under federal program requirements are not protected by this federal policy and continue to be judged under traditional antitrust principals. A long line of enforcement actions and advisory opinions help define the structure and operation of provider collaboration and the factors relevant to determining whether sufficient levels of clinical integration are present to mitigate antitrust risk.
While antitrust laws must still be considered by ACOs, the degree of risk vulnerability has been greatly reduced, at least for now. However, antitrust concerns have been replaced with a wide range of ACO compliance requirements. So qualified ACOs are not out of the woods when it comes to compliance regulatory uncertainty.
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