Antitrust Enforcement Policy for Accountable Care Organizations

Late last year, the Federal Trade Commission and the Department of Justice issued a joint statement of antitrust enforcement policy regarding accountable care organizations (ACO’s). The policy differs from earlier proposed policies in two respects. First, it applies to all collaborations of independent entities, not just those formed after March 23, 2010 (the effective date of the Affordable Care Act). Second, the final policy no longer contains provisions for mandatory review of certain proposed collaborations.

The policy applies to collaborations among otherwise independent actors that qualify as true ACO’s, even if they have not yet been approved to participate in the Shared Savings Program. It does not apply to mergers, nor does it apply to fully integrated entities. There was a concern that such collaboration among potential competitors, part of which would involve setting prices for services and allocating coverage areas, would violate the antitrust law’s prohibition on naked price fixing. Because it was clear that, handled properly, ACO’s could be precompetitive as well, the agencies sought to clarify that they would evaluate ACO’s under a rule of reason.

Under a rule of reason analysis the agencies will evaluate whether a particular collaboration is likely to have anti-competitive effect. They have articulated an antitrust safety zone for ACO’s that meet the Centers of Medicare and Medicade Services’ (CMS) eligibility criteria for participation in the Shared Savings Program and are unlikely to raise significant anti-competitive concerns. Determination of whether an ACO falls within the safety zone will require the ACO to determine its market share in its Primary Service Area (PSA) on three major categories of services. This concession streamlines the antitrust analysis as a PSA does not typically define the relevant geographic market. The policy sets out guidelines for doing do, applicable rural exceptions and identifies conduct to avoid. It also establishes a mechanism for voluntary expedited review.

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