Health Care Reform, Provider Affiliations, and Antitrust Risks

Lona Fowdur, John Gale, Jul 17, 2012

The Accountable Care Act (“ACA”) has brought to the fore the concept of Accountable Care Organizations (“ACOs”). These organizations comprise networks of otherwise unaffiliated providers that can obtain approval from the Centers for Medicare & Medicaid Services (“CMS”) to become jointly responsible for the coordinated care of an assigned Medicare patient population. Per their agreement with CMS, ACOs are eligible to participate in the Medicare Shared Savings Program (“MSSP”). The program entitles participants to share in the Medicare savings they generate if they are able to lower the cost of care for their assigned Medicare patient population, and if they are able to perform adequately along a range of pre-determined quality metrics. Such ACOs would also be permitted to negotiate collectively with private providers and thereby extend the potential savings from care-coordination to commercially insured patients.

As such, it would seem that in passing the ACA, legislators took note of the potential efficiencies that could be realized through affiliations between provider groups. Providers, on the other hand, have sought such efficiencies, even prior to the enactment of the ACA, both through negotiations with managed care plans-for example under pay-for-performance systems-and through formal consolidations in the form of mergers and acquisitions.

Antitrust regulatory agencies at the U.S. D