Accountable Care Organizations: Proposed Rules Would Create Limited "Under 50%" Antitrust Exemptions

The Obama Administration has published its long-awaited health care joint venture rules -- rules which will allow doctors hospitals and health care providers to work together to serve Medicare patients in the US more efficiently -- and, it is hoped, reduce cost of care, overall.

Significantly, under the just-published-for-public-comment proposed rules, so long as any created joint venture does not eclipse the 50 percent of any given market mark, it will enjoy significant exemptions from the antitrust rules. [A PDF file of the full 425 pages of text, of the proposed federal rules, available here.]

Per this morning's New York Times ($ subs. req.):

. . . .Until now, accountable care organizations were like unicorns, creatures that flourished in the imagination but proved persistently elusive in the natural world. The rules define the new entity as a team of doctors, hospitals and other providers that “work together to manage and coordinate care” for people in the traditional fee-for-service Medicare program.

The new entities are specifically authorized for Medicare patients under the health overhaul that President Obama signed in March last year. However, federal officials and health care executives said the standards would also guide similar efforts in the private sector, for people with commercial insurance.

The new law has already set off a wave of mergers, joint ventures and alliances in the health care industry, as providers try to position themselves to cash in on the new incentives.

Officials from the Justice Department and the Federal Trade Commission said Thursday that they would relax enforcement of antitrust laws to promote collaboration by doctors and hospitals that could show how consumers would benefit.

In a joint statement on enforcement policy, the two agencies acknowledged that, “under certain conditions, accountable care organizations could reduce competition and harm consumers through higher prices or lower quality of care” — a fear expressed by some consumer advocates as well.

To minimize this risk, the antitrust agencies said they would closely review any proposed accountable care organization that would have more than 50 percent of the local market for any service. . . .

We will keep you posted, but this should spur deal-doing activity in many of the nation's regional care centers -- especially between larger and smaller suburban hospitals and multi-practice groups.