DOJ Withdraws Antitrust Safe Harbors
DOJ Withdraws Three Antitrust Healthcare Enforcement Statements in Place Since the 1990s, Eliminating Collaboration Safe Harbors and Raising Doubt as to DOJ’s Policy with Respect to Information Sharing and Joint Purchasing Practices Generally
In 1993, First Lady Hillary Rodham Clinton, joined by the Attorney General, the head of the Antitrust Division of the Department of Justice (DOJ), the Chair of the Federal Trade Commission (FTC), and several members of Congress, unveiled a comprehensive antitrust enforcement policy designed to “make health care more available and affordable to all Americans.” The 1993 Statements of Antitrust Enforcement Policy in Health Care (“1993 Statements”) resulted from months of focus as part of the Clinton Administration’s ambitious effort to reform the nation’s health care system and improve the delivery of health care to Americans.
A significant feature of the 1993 Statements was the establishment of antitrust “safety zones” around categories of competitor collaboration that the DOJ and the FTC determined not to challenge except in extraordinary circumstances. Then-Assistant Attorney General Anne K. Bingaman explained that “many healthcare providers have delayed cooperative cost-cutting arrangements because of uncertainty about antitrust restrictions,” and predicted that new policy statements would reduce the cost of health care to consumers.
On February 3, 2023, the DOJ announced its surprise withdrawal of the 1993 Statements, 1996 Statements that revised and expanded upon the 1993 Statements, and an Obama-era statement related specifically to Accountable Care Organizations (ACOs) participating in the Medicare Share Savings program. In its brief press release, DOJ said that the three withdrawn statements had become “outdated” by unspecified changes in “the healthcare landscape” and were too permissive on certain subjects, like information sharing. New guidance will come in the form of enforcement actions and competition advocacy.
Of particular note, this policy change is the elimination of antitrust enforcement “safety zones” contained in the withdrawn statements–including those related to information sharing and joint purchasing that have been broadly relied upon across all industries.
The FTC, which shares jurisdiction over antitrust health care enforcement with DOJ, has not yet said whether it will also withdraw the three policy statements, although it is expected that the FTC will follow suit in the coming weeks.
SCOPE OF THE WITHDRAWN STATEMENTS
The 1996 Statements include nine policy statements, addressing:
(1) hospital mergers,
(2) hospital joint ventures (JVs) involving expensive, high-tech equipment,
(3) hospital JVs involving specialized clinical or other expensive healthcare services,
(4) the collective provision of non-fee-related information to healthcare payers,
(5) the collective provision of fee-related information to healthcare payers,
(6) information sharing among health care providers,
(7) joint purchasing arrangements,
(8) physician network JVs, and
(9) multi-provider networks.
Most of these policy statements created antitrust safety zones based on market shares and other factors for mergers and collaborative arrangements. For example, the 1996 Statements provided that DOJ would not challenge a merger between two acute-care hospitals where one of the hospitals had an average of fewer than 100 licensed beds over the three most recent years and an average daily in-patient census of less than 40 patients.
With respect to provider information sharing, the 1996 Statements provided that DOJ would not ordinarily challenge the exchange of price and cost information as long as (a) any survey was managed by a third party, (b) the information was more than three months old, (c) at least five providers reported data—none of which individually accounted for more than 25 percent of the data on a weighted basis—and (d) the information was sufficiently aggregated that it would not have been possible to identify prices charged, or compensation paid, by any single provider.
With respect to joint purchasing, the 1996 Statements stated that DOJ would not ordinarily challenge arrangements where (a) purchases accounted for less than 35 percent of total sales of the purchased product or service in a relevant market; and (b) the cost of the products or services jointly purchased accounted for less than 20 percent of total revenues from all products or services sold by each competing participant in the arrangement.
The 1996 Statements also informed DOJ business review letters for industries outside of healthcare markets and thus came to be relied on by businesses across the economy.
ACO Policy Statement
The 2011 ACO Policy Statement applied to collaborations among otherwise independent groups of doctors, hospitals, and other healthcare providers to provide coordinated care to Medicare beneficiaries pursuant to the Medicare Shared Savings Program. Among other things, the ACO Policy Statement established market-share based antitrust “safety zones” for ACOs. Generally, with some exceptions, an ACO fell within a safety zone so long as participants providing the same service had a combined market share of 30 percent or less in a primary service area. The Policy statement also explained how the DOJ (and the FTC) would assess information sharing and other joint conduct by ACOs falling outside a safety zone.
- The three withdrawn statements were expressly designed to encourage beneficial collaboration in healthcare through antitrust enforcement safety zones. By removing the healthcare safety zones, DOJ may be signaling future investigations and enforcement actions of conduct that previously fell within them, particularly with respect to information sharing, although conduct falling outside a safe harbor is not necessarily anticompetitive or vulnerable to challenge.
- The withdrawal of these policy statements may also foreshadow a restrictive approach toward safe harbors and efficiencies in upcoming revisions to the DOJ/ FTC merger guidelines.
- Business review letters issued by DOJ with respect to information sharing and joint purchasing over the past many years related to both healthcare and non-healthcare markets have built on the principles set forth in the 1996 Statements. DOJ should clarify whether continued reliance on those principles is still appropriate.
 Press Release, Department of Justice, Antitrust Enforcement Policy Statements Issued for Health Care Industry (Sep. 15, 1993), https://www.justice.gov/archive/atr/public/press_releases/1993/211661.htm.
 Antitrust Enforcement Policy Statements in the Health Care Area, issued by the Department of Justice and FTC (Sep. 15, 1993), available at https://www.justice.gov/archive/atr/public/press_releases/1993/211661.htm.
 Statements of Antitrust Enforcement Policy in Health Care, issued by the U.S. Department of Justice and the Federal Trade Commission (Aug. 1, 1996), available at https://www.justice.gov/atr/page/file/1197731/download.
 Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program, issued by the Federal Trade Commission and the U.S. Department of Justice (Oct. 20, 2011), available at https://www.justice.gov/sites/default/files/atr/legacy/2011/10/20/276458.pdf.
 Press Release, Department of Justice, Justice Department Withdraws Outdated Enforcement Policy Statements (Feb. 3, 2023), https://www.justice.gov/opa/pr/justice-department-withdraws-outdated-enforcement-policy-statements.
 American Hospital Association, DOJ withdraws certain health care antitrust enforcement guidance (Feb. 3, 2023), https://www.aha.org/news/headline/2023-02-03-doj-withdraws-certain-health-care-antitrust-enforcement-guidance.