Despite two recent setbacks in federal court and a potential tempest brewing in Congress, antitrust officials from the Federal Trade Commission and U.S. Justice Department indicated that the two agencies aren't rolling over dead just yet.
One official all but said the Justice Department intends to go to the mat in the Dubuque, Iowa, hospital merger case, and two FTC officials indicated the agency is close to coming up with a new way to examine provider networks. The revamp comes in the face of proposed federal legislation that could reduce the agencies' flexibility in reviewing such networks for antitrust problems.
The officials spoke last week at a healthcare antitrust conference in Washington sponsored by the National Health Lawyers Association.
Gail Kursh, who heads the healthcare antitrust task force within the Justice Department, said the agency is waiting for a final decision from the U.S. Solicitor General's Office on whether the department will appeal its loss in the Dubuque case to the 8th U.S. Circuit Court of Appeals in St. Louis.
The department has filed a notice of appeal to preserve its right to appeal, but hasn't formally done so.
Last October, the U.S. District Court in Cedar Rapids, Iowa, dismissed the Justice Department's antitrust lawsuit against the proposed merger-like partnership of Dubuque's only two hospitals, Mercy Health Center and Finley Hospital.
Kursh said that, with the solicitor general's approval, the department will be filing its briefs in the case "within the next few weeks."
She said the department intends to argue that the district court's decision erred in several respects, including agreeing with the hospitals that they competed in a geographic market that extended to other hospitals as far as 100 miles away.
"We do not believe that hospitals 100 miles away are legitimate alternatives for most primary and secondary services offered by the Dubuque hospitals," she said.
Kursh also said the department will rebut the district court's opinion that the government's antitrust analysis was static and failed to predict where patients might go if the merged hospitals arbitrarily raised their prices.
Meanwhile, several officials from the FTC addressed legislation backed by the American Medical Association that would ease the legal test provider networks would have to pass in order to gain antitrust clearance (Feb. 5, p. 14). Hearings on the legislation are scheduled for this week.
Similar legislation failed last fall as part of the federal budget package, but it prompted the FTC to revisit how it examines provider networks. Over the past several months the agency has been talking to providers and payers about potential changes in enforcement policies. But despite the FTC's effort, the AMA pushed ahead on the legislative front.
FTC officials who spoke last week left the impression that the agencies aren't enamored of the legislation and hope Congress leaves healthcare antitrust enforcement policies up to the agencies.
"We're sensitive to the concerns raised by the AMA," said Robert Leibenluft, who heads the FTC's healthcare antitrust effort. "The bottom line is there's been a long history of collusive behavior among providers, and that's why we've been concerned."
Leibenluft said the agency's discussions with providers and payers may lead to greater clarification or guidance on how the FTC and Justice Department look at provider networks.
William Baer, director of the FTC's bureau of competition, echoed Leibenluft's sentiments. He said the focus of the agency's talks with providers and payers has been on the types of plans or networks payers want to contract with and whether federal enforcement policies have stood in the way of such deals.
Not coincidentally, the FTC's analysis should be complete "within the next few weeks," Baer said, as the proposed legislation is being debated.