DOJ and FTC continue focus on healthcare industry with new initiatives

Two recent announcements from antitrust enforcers at the Department of Justice (DOJ) and Federal Trade Commission (FTC) underscore the agencies’ unwavering focus on the healthcare industry within the Biden Administration. 

Both announcements pledge resources to a broad array of industry-specific concerns and hold the potential to work in tandem to enhance the government’s abilities to both detect, and then act on, possible antitrust violations involving healthcare, thereby increasing enforcement risks for the industry.

A new task force

On May 9, 2024, the DOJ’s Antitrust Division announced the creation of its new Task Force on Health Care Monopolies and Collusion (HCMC), which the Division’s top official, Assistant Attorney General Jonathan Kanter, touted as “upping [DOJ’s] game” with respect to the Biden Administration’s ongoing efforts to enforce antitrust laws in the healthcare industry. 

According to DOJ, the HCMC will adopt a “whole of Division” approach, bringing together the Division’s “civil and criminal prosecutors, economists, health care industry experts, technologists, data scientists, and investigators” to address a number of DOJ’s concerns in the industry. Principal among these is the “platformization of health care,” which Kanter said has created multisided intermediaries between healthcare providers and patients. Kanter also cited DOJ’s concerns about the “rich ecosystem of data” and increasing use of algorithmic decision-making impacting care and billing. 

In addition to a “whole of Division” approach, Kanter pledged that the HCMC would advance the Administration’s “whole of government” approach to competition and work across all federal agencies, both to advocate for policies consistent with DOJ’s competition enforcement priorities and to bring to bear all available federal “competition tools” in its efforts. 

A new tipline

The announcement of the HCMC’s creation came the week after the Antitrust Division, FTC, and the US Department of Health and Human Services (HHS) announced the launch of a new online portal for the public to report possible anticompetitive conduct in and affecting the healthcare industry. The portal, HealthyCompetition.gov, details several examples of conduct that DOJ and the FTC assert can harm competition and allows members of the public to report anonymously potential anticompetitive conduct in the industry. 

Among the conduct identified as anticompetitive on the website are transactions that lead to consolidation of healthcare providers, concerns about competition in labor markets for healthcare workers, price fixing among competitors, and anticompetitive uses of healthcare data. 

Potential impacts

On their face, these two developments represent initiatives just begun, with potential impacts that might not be visible for months, if at all. 

But the tandem developments could be significant for the industry, and, after months of talk from the DOJ and FTC about their concerns with competition in healthcare, they signal a possible move to more immediate action. 

In going straight to the public in an industry-specific manner, the HealthyCompetition.gov portal casts a wide net to detect potential antitrust violations. Whether the public ultimately will use it and submit actionable complaints remains to be seen, but, in our experience, the DOJ and FTC take seriously their obligation to review and respond to citizen complaints. Even if a very low percentage of the information brought in through the portal is actionable (a typical tradeoff against the high volume of complaints generated by a direct-to-public interface), it has the potential to focus the enforcers’ investigative activities more quickly on more problematic areas. Moreover, HHS’s Inspector General will be involved in the screening of complaints, and nothing limits HHS’s ability to act on tips that may identify actionable issues in the industry unrelated to antitrust and competition concerns. 

The HCMC likewise begins its life as a concept awaiting proof. But, in its dedication of resources to healthcare-specific concerns (we note that the task force supplements and does not displace existing units of both the Antitrust Division and FTC that are dedicated to aspects of the healthcare industry), it better organizes and prepares DOJ to act on its concerns, which extend beyond merger enforcement. DOJ’s recent track record with similar task forces has met some success, with the Antitrust Division initiating numerous investigations, litigations, and prosecutions through its Civil Conduct Task Force and Procurement Collusion Strike Force, both of which have become entrenched within the Antitrust Division’s organization. 

Also notable is the HCMC’s express inclusion of criminal prosecutors in its ranks, paired with a mandate to address collusive conduct such as price fixing, which the DOJ typically treats as a criminal matter. By adding the specter of criminal enforcement to federal competition agencies’ oft-repeated concerns around consolidation in the healthcare industry (which are addressed through civil and merger enforcement), this also introduces the possibility of mandatory exclusion from federal programs, as well as numerous state programs and insurance plans that follow federal programs’ exclusion decisions, all of which could be triggered by conviction for a Sherman Act offense. 

Going forward

These developments signal the Biden Administration’s most recent escalation of its efforts to aggressively enforce antitrust laws in the healthcare industry, and they have the potential to lead to investigation, civil litigation, or even criminal prosecution. At least for the duration of the Biden Administration, industry participants are encouraged to take note of the increased enforcement risks.  

If you have additional questions or concerns, please reach out to one of the authors.