backDOJ Introduces Task Force on Health Care Monopolies and Collusion — On May 9, 2024, the DOJ announced the formation of a new task force on health care monopolies and collusion (the HCMC Task Force) that will “guide the division’s enforcement strategy and policy approach in health care, including by facilitating policy advocacy, investigations and, where warranted, civil and criminal enforcement in health care markets.”
Background
The Biden administration has placed focus on a various efforts to enhance antitrust enforcement in the health care industry.
For example, the White House released a statement in December 2023 declaring their plan to promote competition in health care and support lowering prescription drug costs. This is a multifaceted plan that includes, but is not limited to:
- promoting equitable access to lower-priced taxpayer-funded drugs;
- launching a cross-government public inquiry into corporate greed in health care;
- identifying anticompetitive “roll ups” that currently evade antitrust review;
- increasing ownership transparency;
- increasing Medicare Advantage transparency;
- stopping alleged large pharmaceutical company tactics that raise prices for working families;
- cracking down on anticompetitive and anti-consumer practices in Medicare Advantage;
- addressing anticompetitive misuse of the patent system;
- banning non-compete agreements that trap health care workers and others;
- developing new payment models for doctors including supporting independent doctors; and
- improving transparency of hospital charges.
The FTC also has inquiries underway regarding the operations of pharmacy benefit managers, or “prescription drug middlemen,” over criticisms about drug access, a study on the impact of physician consolidation, including physician practice mergers and hospital acquisitions of physician practices, and a study on the effects of certificates of public advantage on prices, quality, access, and innovation of healthcare services.
Last month, the DOJ, in a joint project with the FTC, launched an online portal to allow for anyone to submit a healthcare competition complaint.
HCMC
The HCMC Task Force’s objective is to identify monopolies and collusive practices contributing to rising health care costs, decreased quality of care, and the creation of single points of failure in the industry. Assistant Attorney General of the DOJ’s Antitrust Division, Jonathan Kanter, stated, “[e]very year, Americans spend trillions of dollars on health care, money that is increasingly being gobbled up by a small number of payers, providers and dominant intermediaries that have consolidated their way to power in communities across the country.” With a focus on policy advocacy, investigation, and enforcement, the HCMC Task Force will promote competition and innovation that will benefit patients, healthcare professionals, businesses and entrepreneurs alike. Kanter shared, in an interview, that “the purpose of this task force is to ensure that we are taking a whole-of-division approach as well as a whole-of-government approach to ensure that we hold monopolies and bad actors accountable for violations of the antitrust laws in the healthcare space.”
The HCMC Task Force will seek to address competition concerns in the health care industry over issues including:
- payer-provider consolidation;
- serial acquisitions;
- labor and quality of care;
- medical billing;
- health care IT services; and
- access to and misuse of health care data.
The HCMC Task Force will be led by Katrina Rouse, an antitrust prosecutor who has been with the DOJ’s Antitrust Division since 2011. Rouse will service concurrently as the Deputy Director of Civil Enforcement and Special Counsel for Health Care. Others joining the HCMC Task Force will include civil and criminal prosecutors, economists, health care industry experts, technologists, data scientists, investigators, and policy advisors.
Key Takeaway
The formation of the HCMC Task Force is a continuation of Biden administration efforts to investigate and crack down on monopolies and collusion in the health care industry. The ultimate goals for the HCMC Task Force are to promote and enhance health care quality, affordability, and accessibility. King & Spalding will continue to monitor the formation and actions of the HCMC and provide insights with respect to potential impacts on our healthcare industry clients.
Reporter, Catherine Behnke, Chicago, +1 312 706 8047, cbehnke@kslaw.com.
CMS Proposes Six-Year Model Testing Improvements to Kidney Transplant System – On May 8, 2024, CMS issued a proposed rule for establishing the Increasing Organ Transplant Access Model (IOTA Model). As proposed, the IOTA Model would run for six years starting on January 1, 2025, in Donation Service Areas (DSAs) across approximately half the country. This IOTA Model intends to test if providing performance-based incentive payments to participating kidney transplant hospitals will improve access to kidney transplant procedures without compromising patient health outcomes.
Although the IOTA Model is experimental, participation will be mandatory for hospitals that:
- performed at least eleven kidney transplants for patients 18 years of age or older annually over a designated three-year period; and
- provide more than half of their annual kidney transplants to patients 18 years of age and older.
The IOTA Model’s proposed incentive structure would not only reward hospitals that achieve program goals but will also implement consequences for sub-par performance. The IOTA Model would evaluate each participating hospital with a score between zero points and one hundred points. CMS would award sixty out of one hundred points on the basis of the number of transplants each transplant hospital provides compared to a CMS-established benchmark. CMS would award another twenty points using a formula calculating how efficiently each transplant hospital converts “offered” kidneys into successful transplant procedures. CMS would award the final twenty points on a measure of post-transplant outcomes to confirm continuing quality of care. Transplant hospitals that receive a score of at least sixty points would receive “upside risk payments” from CMS as a reward. Hospitals that receive forty or fewer points would be subject to “downside risk payments” to CMS as a penalty. Transplant hospitals whose scores fall in between both categories would receive neither a payment nor a penalty.
CMS has not yet indicated which donor service areas (DSAs) would participate in the IOTA Model but has signaled that it will select DSAs at random. Stakeholders may submit comments to CMS regarding the proposed rule prior to July 16, 2024. The display copy of the proposed rule can be found here, and a fact sheet regarding the rule can be found here. The proposed rule is expected to be published in the Federal Register on May 17, 2024.
Reporter, Gregory Fantin, Washington D.C., +1 202 626 9271, gfantin@kslaw.com.