Antitrust enforcers once again have ramped up their efforts to target the health care industry with the Department of Justice’s (DOJ) launch of the Antitrust Division’s (the Division) Task Force on Health Care Monopolies and Collusion (the Task Force). This announcement comes on the heels of other ongoing initiatives focused on purportedly anticompetitive conduct in the health care sector, including a joint public workshop denouncing “corporate greed” in health care markets, a request for information seeking comments regarding the effect of transactions involving health care providers, and the launch of a portal to facilitate reporting of complaints about potentially unfair and anticompetitive health care practices. In the current enforcement environment, it is imperative that participants in health care markets – including but not limited to managed care organizations, providers, investors, technology, and data companies – consider the competitive effects and potential antitrust risk of their strategic business decisions.
Task Force overview
The Task Force will guide the DOJ’s enforcement strategy and policy relating to health care, including policy advocacy, investigations, and civil and criminal enforcement in health care markets. Specifically, the Task Force will target a wide range of competition concerns that the Division says are shared by patients, health care professionals, businesses, and entrepreneurs, including “payer-provider consolidation, serial acquisitions, labor and quality of care, medical billing, health care IT services, access to and misuse of health care data and more.” Katrina Rouse, an antitrust prosecutor who joined the Division in 2011 and who previously served as Chief of the Division’s Defense, Industrials, and Aerospace Section and as a trial attorney in the Division’s Health Care and Consumer Products Section, will direct the Task Force.
DOJ remarks on Task Force
During the announcement of the Task Force on May 9, 2024, Assistant Attorney General Jonathan Kanter said that the Division is “upping our game” on health care enforcement and laid out three “animating principles” at the core of the Task Force:
- Need for antitrust enforcement to adjust to market realities of health care in a post-industrial economy: Kanter underscored that “heath care in a post-industrial economy is different than it used to be,” referring to the “platformization of health care” today that has resulted in “multi-sided giants and intermediaries that are accumulating assets at an alarming rate,” including payors, providers, PBMs, claims processors, and banks. At the heart of the Task Force is the DOJ’s belief that the trillions of dollars that Americans spend on health care are “being gobbled up by a small number of payers, providers and dominant intermediaries that have consolidated their way to power in communities across the country.” As an example, Kanter pointed to insurance companies buying up health care providers “at an extraordinary clip.” The Task Force will “identify and root out monopolies and collusive practices that increase costs, decrease quality and create single points of failure in the health care industry,” including taking a hard look at these “multi-sided giants and intermediaries” that Kanter describes as the “gatekeepers” of the American health care system.
- Government resources and tools: Next, Kanter noted that Task Force will exploit the Division’s “deep bench” of resources and tools, including civil and criminal prosecutors, economists, health care industry experts, technologists, data scientists, investigators, and policy advisors from across the Division’s civil, criminal, litigation, and policy programs, and the Expert Analysis Group, to identify and address pressing antitrust problems in health care markets.
- A “strong policy voice”: Kanter emphasized that the creation of the Task Force builds on the Biden administration’s “whole-of-government” approach to antitrust enforcement, encouraging various agencies and departments across the federal government to work together to target antitrust violations. He stated that the Task Force “elevates the importance of antitrust enforcement” which is among the government’s “highest priorities.”
Looking forward
As emphasized by Assistant Attorney General Kanter’s remarks, the creation of the Task Force is another example of increased antitrust scrutiny of the health care industry in the Biden era, consistent with other recent initiatives targeting consolidation in and the purported "financialization" of the health care sector. The announcement’s specific reference to “payer-provider consolidation” warrants particular attention by “payviders” – vertically integrated companies operating as both payors and providers. Moreover, the Task Force seemingly formalizes a shift in the DOJ’s enforcement priorities. For the most part, the FTC has played a larger role in enforcing federal antitrust law in health care provider markets, while the DOJ has typically overseen insurance markets. In fact, in 2001 the Division dismantled a prior iteration of a health care task force and announced that it would generally refer cases involving providers to the FTC. The breadth of the new Task Force suggests that the agencies’ historical division of authority is a thing of the past, and that all facets of health care markets are fair game for DOJ antitrust enforcement.
While it remains to be seen whether the Task Force will make significant inroads in curtailing further consolidation in health care markets, there is no doubt that participants in health care markets need to scrutinize the competitive effects of their strategic business decisions to minimize risk.
Client Alert 2024-104
