In its first advisory opinion letter issued since implementation began on the Affordable Care Act, the Federal Trade Commission indicated that it would not challenge a proposal from the Norman Physician Hospital Organization (PHO) to form a clinical integration program (CIP).
For your reference, a roundup of legal commentary and analysis on the FTC opinion.
FTC Issues Another Favorable Clinical Integration Program Advisory Opinion (McDermott Will & Emery):
“FTC staff found that Norman PHO has identified key features and mechanisms of a CIP, and has invested or will invest in substantial resources for purposes of developing the infrastructure necessary to achieve proposed efficiencies. The opinion cites the creation of various mechanisms, including clinical practice guidelines, intended to monitor and control costs and utilization while promoting quality of care. Data capture and analysis, and monitoring and enforcement of program requirements are other key elements.” Read on>>
“… under the proposed clinical integration program, the PHO’s participating physicians are required to actively participate in a variety of collaborative clinical activities, develop and follow clinical practice guidelines, utilize physician performance measures, conduct peer review and corrective actions, design and implement quality improvement initiatives, and significantly, adopt and use an electronic medical information and records system (including e-prescribing and an electronic clinical decisions support system).” Read on>>
FTC Issues First Clinical Integration Advisory Opinion Post-ACA (Bradley Arant Boult Cummings LLP):
“… the need for the network to be non-exclusive is essential, particularly if the physicians will comprise a significant portion of the market. FTC staff stressed this point several times, stating that if the network operates ‘as a de facto exclusive network, it would raise serious concerns and could be necessary to revisit . . . whether staff would recommend an antitrust enforcement action.’” Read on>>
Because ‘Norman PHO’s proposed activities contemplate horizontal combinations or pricing agreements only in the provision of physician services,’ as well as having the potential to ‘generate significant efficiencies in the provision of physician services,’ the FTC believes its activities ‘appear unlikely to unreasonably restrain trade.’ Further, Norman PHO’s ‘operations will not involve horizontal agreements among competing providers of inpatient hospital services, or outpatient hospital and ambulatory care services, because Norman Regional Health System is the only provider of such services that will participate in the network.’” Read on>>
“The 21-page Advisory Opinion does touch upon other antitrust related issues, including a vertical analysis and a discussion of spillover effects… It is important to emphasize, as did the Norman PHO, that it had no clinical integration contracts, and the marketplace will decide whether their program has sufficient value to attract payers. In some other markets, entities with such programs have gotten little or no traction — and no contracts. The Norman PHO is undoubtedly correct that the market still must speak about its aspirations. The FTC staff has given the Norman PHO the OK to try to succeed.” Read on>>
Find related FTC updates on JD Supra Law News>>