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Health-Care Collusion Task Force Sets Stage for DOJ Enforcement

  • Justice Department poised to bring civil, criminal cases

  • Enforcers expected to focus on data-sharing, use of AI


The Justice Department’s new efforts to detect collusion in the health-care industry are likely to result in a range of enforcement actions against providers and other players within the medical supply chain.


The recent rollout of the DOJ’s Task Force on Health Care Monopolies and Collusion builds upon the Biden administration’s efforts to crack down on anticompetitive practices in the increasingly complex and consolidated health-care space.


Both the DOJ and the Federal Trade Commission already focus on health-care enforcement, but the dedicated force launched in May brings together experts including data scientists, technologists, investigators, and economists to better understand health-care markets and file enforcement actions against bad actors—sooner rather than later.


Enforcement actions could include criminal and civil cases as well as suits to block anticompetitive deals, antitrust attorneys say.


“They are not just worried about consolidation, they are worried about conduct,” said Carsten Reichel, a partner with DLA Piper and a former DOJ prosecutor. “I don’t think they would call it the monopoly and collusion task force unless they thought some collusion was going on.”


Impacting Pocketbooks


The agency is currently investigating UnitedHealth’s acquisitions of health-care providers and data companies, and similar probes are likely on the way, antitrust attorneys say.

“Industry has received the message clearly from the Justice Department that this is an area that is being subject to scrutiny,” said Peter Mucchetti, a partner with Clifford Chance and a former chief of the DOJ Antitrust Division’s health-care and consumer products section.

The task force is likely to gain leads from a public inquiry the department launched in March with the FTC and the Department of Health and Human Services regarding small acquisitions by private equity companies in the health-care industry.


“Sometimes the spotlight gets placed on the biggest players in an industry, but this task force could impact health-care companies of all sizes,” said Mary Kaiser, a partner in Morrison Foerster’s global antitrust practice. “There is a belief within this administration that competition issues are impacting people very directly—that rising prices of health care and pharmaceutical drugs is something that is really impacting people’s pocketbooks.”


The DOJ has been active in health-care enforcement for years, including with lawsuits against Anthem’s proposed acquisition of Cigna and Aetna’s planned acquisition of Humana. But the new force signals the agency is dedicating additional resources to curbing anticompetitive conduct.


The idea of “taking on health-care giants is not new, but what is new is the post-industrial economy for health care is shifting, and it’s shifting right beneath our feet,” Jonathan Kanter, assistant attorney general for the DOJ’s Antitrust Division, said at a May event hosted by the Washington Post. “And so we believe it’s important to adapt in real time.”


Price-Fixing, Consolidation Cases


It’s possible the DOJ could bring additional cases in the coming months, said Henry Hauser, antitrust counsel at Perkins Coie and a former antitrust enforcer with the DOJ and FTC.


“Just because it’s being launched now doesn’t mean they are starting from scratch,” he said.

Hauser said he wouldn’t be surprised to see agencies including HHS, the Centers for Medicare & Medicaid Services, and the US Department of Veterans Affairs providing insights on potential probes, given the task force is reflective of the Biden administration’s “whole-of-government” approach designed to bring together expertise from multiple federal agencies.


The task force is expected to bring cases against providers using algorithmic price-setting databases to pool data and inflate drug prices, deals involving medical billing and health care IT services, and consolidation of payer and provider businesses, attorneys say.“The Biden administration feels like there has been under enforcement of the antitrust laws, and they are looking for ways to push the boundaries,” said Colin Kass, a partner in Proskauer Rose’s litigation department and co-chair of the firm’s antitrust group.


“It’s a signal to the market that they want to do something more than they have done in the past,” Kass said. “What you haven’t seen is a lot of health-care cases that go beyond that core hospital merger or hospital-centric type of case.”


Industry Warning


Various sectors of the industry may face different pressures given the higher scrutiny into their practices.


For example, pharmacy benefit managers, which manage prescription drug plans of behalf of health insurers, have been long criticized over lack of transparency and inflated costs to health plans.


The force “marks the first time that a federal government agency has gone beyond just identifying and sharing its concerns with the way in which pharmacy benefit managers have evolved,” said Jonathan Swichar, partner and chair of Duane Morris’ pharmacy litigation group.


“A federal government agency now has enforcement authority to seek civil or criminal redress against pharmacy benefit managers adversely impacting competition by independent pharmacies or reducing the quality of health care,” Swichar said.

PBMs, though, maintain that their mission is to deliver discounts to patients, and that manufacturer list prices and use of patents that limit competition are fueling high pharmaceutical prices.


Other practices in the industry that may be under pressure include health insurers purchasing and operating physician practices, medical practices contracting with health insurance companies, and hospital acquisitions.


A prime example of a large acquisition was when CVS Health in 2023 acquired health services company Signify Health. Elevance Health in April announced plans to launch “strategic partnership to advance primary care delivery.”


“When you see multiple areas of government coordinating and concentrating their fire on a segment of the economy that you are in, it’s a good time to take note and review what you’re doing,” said Philip Legendy, of counsel at Ballard Spahr LLP’s health-care practice.


“The government has substantial resources to bring these kinds of cases, so it’s a big deal—it’s different, we haven’t seen it before,” Legendy said.


To contact the reporters on this story: Katie Arcieri in Washington at karcieri@bloombergindustry.com; Nyah Phengsitthy in Washington at nphengsitthy@bloombergindustry.com

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