The FTC will study the impact of COPAs

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On October 21, 2019, the Federal Trade Commission (FTC) announced that it had ordered five health insurance companies and two health systems to provide information that will allow the agency to study the effects of health certificates. utility (COPA) on prices. , quality, access and innovation of health services. The ultimate goal of the study is to improve the FTC’s knowledge of COPAs in order to inform the agency’s advocacy and enforcement efforts, and to serve as a resource for states considering COPAs.

A COPA is a written certificate typically issued by a state health department under state laws and regulations that purport to supersede federal (and sometimes state) antitrust laws and thereby provide immunity from antitrust law. to certain mergers, acquisitions and other healthcare providers. memberships. Under the “State Action Doctrine,” states can shield certain transactions and conduct from federal antitrust law if the state (1) has affirmatively and clearly expressed an intention to displace the law federal antitrust and replacing it with state regulation; and (2) actively overseeing the transaction or collaboration.

Fearing that federal antitrust law and FTC enforcement against healthcare mergers have been too strict and prevent pro-competitive transactions, several states have passed COPA (or “Cooperative Agreement”) laws to allow healthcare providers from entering into transactions that might otherwise be blocked by the FTC. Proponents of COPAs believe they enable health care providers to enter into transactions that eliminate costly duplicate services, achieve clinical efficiencies, facilitate more integrated care, and enable other community health benefits.

Recently, the FTC’s attempts to stop two hospital mergers – the combination of Cabell Huntington Hospital and St. Mary’s Medical Center in West Virginia, and the Mountain States Health Alliance and Wellmont Health System transaction covering Tennessee and Virginia – were thwarted by COPA laws. In the Cabell merger, the FTC dropped its lawsuit challenging the merger after the state passed a cooperative agreement law and the West Virginia Health Care Authority approved the cooperative agreement. In the Mountain States/Wellmont merger, the FTC vigorously opposed the granting of a COPA in Tennessee and a Cooperative Agreement in Virginia through the respective states’ COPA processes, but both states have COPA approved.

Following COPA approvals for these two transactions, the FTC announced the COPA Assessment Project in November 2017, soliciting empirical research and public comment regarding the impact of COPAs on price, quality, access, and innovation for health services, and concerning the advantages or disadvantages. that resulted from COPAs. In June 2019, the FTC held a public workshop as a follow-up to the request for comment. The tone of this workshop was widely critical of COPAs, with FTC Chairman Joseph Simons stating that “COPAs have blocked the FTC from challenging problematic agreements” and that he remains skeptical of the purported benefits of COPA, given insufficient data on their effects.

In issuing the October 21 information order to the five health plans, Ballad Health (the Mountain States/Wellmont merged system) and the Cabell/St. Mary’s merged system, the FTC intends (1) to further his understanding of the effects of COPAs on the price, quality, access and innovation of healthcare services, (2) to study the effects of hospital consolidation on employee salaries and (3) to study retrospectively the effects of the Mountain States/Wellmont and Cabell/St. Mary’s transactions in particular. In fact, the FTC’s announcement indicates that the agency’s study is a long-term endeavor, as it intends to gather information “over the next few years” on COPAs Ballad and Cabell.

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