A Not So Modest Proposal? The FTC/DOJ Proposed Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program

David Pearl, Toby Singer, May 12, 2011

On March 31, 2011, the Federal Trade Commission and the Antitrust Division of the Department of Justice (the “FTC and “DOJ” or the “Agencies”) issued a Proposed Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program. (“Proposed Statement). The Proposed Statement offers guidance concerning how the Agencies will review for antitrust compliance combinations of physicians, hospitals, and other providers into Accountable Care Organizations (“ACOs”) created pursuant to the Medicare Shared Savings Program of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (the “Affordable Care Act”). The thrust of the Medicare Shared Savings Program is that providers who form ACOs that lead to reduced costs for Medicare will share in any savings they helped create.

At a glance, it may not be apparent how a program to incentivize health care providers to lower Medicare costs could implicate the antitrust laws. Indeed, if an ACO chooses to contract only with the Medicare program, one would anticipate very little interest on the part of the Agencies. However, providers have made clear that they are unlikely to form ACOs unless they might also use them for their commercially-insured patients; because ACOs by their very nature involve competitors acting in concert, extending their reach to the commercial setting raises antitru

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