FTC Announces Withdrawal of Healthcare Policy Statements

As Bradley forecasted in February, the Federal Trade Commission (FTC) recently announced the withdrawal of two healthcare antitrust policy statements: Statements of Antitrust Enforcement Policy in Health Care (1996) and Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program (2011). The withdrawal has been long awaited since the Department of Justice (DOJ) took similar action earlier this year.

The now-inoperative policies had provided for non-binding antitrust “safety zones” for certain conduct, including certain exchanges of information, multi-provider network collaborations, and group purchasing organizations, as well as the conduct of accountable care organizations participating in the Medicare Shared Savings Program. Echoing the DOJ, the FTC referred to the withdrawn statements as “outdated” and inconsistent with “market realities.” In their place, the agency has committed to reviewing mergers and various forms of conduct on a case-by-case basis.

With the withdrawal coming on the heels of the FTC proposing extensive and time-consuming changes to the Hart-Scott-Rodino premerger notification process, industry participants should be prepared for the uncertainties and potential costs associated with increased individualized scrutiny of their conduct. Further, the healthcare industry should be prepared for the uncertainties and potential costs associated with the shifting enforcement landscape in general. The policy withdrawals are only the most recent indicator of the DOJ’s and FTC’s intent to reshape antitrust enforcement in the healthcare sector. Draft updates to the Horizontal Merger Guidelines were recently released by both agencies, and an earlier-announced FTC rulemaking proposing a sweeping noncompete ban is expected to be announced within the next year.