Late last week, the Federal Trade Commission and the Department of Justice (collectively, the Agencies) announced that they will hold a public workshop regarding topics in health care competition on February 24–25, 2015. The notice invites stakeholder comments, which the Agencies will review in preparation for the workshop. Comments must be submitted by February 16, 2015, in order to be considered prior to the workshop.
Although comments broadly relating to evolving provider and payor models are welcome, the Agencies identified several topics on which they would find stakeholder input particularly valuable. These include:
1. Early Observations of Accountable Care Organizations (ACOs)
Since the 2011 Statement of Antitrust Enforcement Policy Regarding ACOs, the Agencies have largely adopted a watch-and-wait approach with ACOs. The Agencies’ questions within this category have as much to do with the competitive impact of ACOs (in particular, in the commercial market), as they do with gathering fundamental feedback on whether ACOs have been successful in aligning payor, provider, and patient incentives. Key areas of interest include: evidence of cost reductions or quality improvements; spill-over effects, if any, between Medicare and commercial ACOs; and impact on market power and patient referral patterns.
2. Alternatives to Traditional Fee-for-Service Payment Models
The notice observes that, in recent years, health policy experts have emphasized the importance of shifting away from fee-for-service payment models and towards value-based purchasing. This trend was significantly accelerated earlier this week, when Secretary of Health and Human Services Sylvia Burwell announced that the agency plans to restructure Medicare provider reimbursement so that by 2016, 30 percent will come from outcomes-based payment models, rising to 50 percent by 2018. Despite the desire of many to move away from fee-for-service models, value-based payment models present their own set of issues. The Agencies solicited information about how alternative models could be successfully instituted by providers of all sizes, without harming either competition or patient access.
3. Trends in Provider Consolidation
The Agencies have long expressed skepticism as to whether provider consolidation generates quality improvements and cost reductions that cannot be achieved through other forms of collaboration. In the notice, the Agencies requested comments relating to three types of trends in provider consolidation.
First, the Agencies asked for information regarding hospital-physician practice mergers. In particular, the Agencies are interested in evidence relating to physician practices being able to submit claims for facility charges post-merger, whether hospitals and physician practices have greater bargaining power that they can leverage into negotiating higher rates, and whether the merging parties’ predicted quality increases actually arise post-merger. Second, the Agencies raised the topic of whether “cross-market” hospital mergers are uniquely anticompetitive, and whether traditional antitrust tools can adequately assess future harm to competition. Finally, the Agencies asked for examples of provider-payor consolidations and the competitive implications of such mergers.
4. Provider Network and Benefit Design
The Agencies referenced the recent trend towards networks that restrict access to providers and expressed concern that certain network contracting strategies could be self-defeating. In this vein, the Agencies posed questions regarding whether network designs such as narrow networks lead to cost reductions, and the extent to which market structure and degree of provider competition impact network and benefit design. Additionally, the Agencies solicited information about certain ongoing regulatory and legislative initiatives (e.g., essential benefits and network adequacy requirements, any willing provider laws and price transparency rules) that could either positive or negatively affect efforts to implement innovative network and benefit designs.
5. Early Observations of Health Insurance Exchanges
Against the backdrop of the health exchanges’ continued efforts to find their footing, the Agencies posed a series of questions relating to whether the exchanges have affected competition in health insurance markets, in particular, on the number of competitors, the variety of products offered and the pricing as compared to plans sold prior to the institution of the exchanges.
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Although the Agencies will only consider comments for purposes of the workshop if they are submitted prior to February 16, 2015, the Agencies welcome comments on both the questions posted in the public solicitation notice and the workshop dialogue itself until April 30, 2015. A copy of the text of the Federal Register notice is available here.