The U.S. Federal Trade Commission is demanding two health systems and five health insurers hand over a considerable collection of information covering years of patient billing information, quality data and employee wages.
The federal agency will use the data in its study into the effects of certificates of public advantage on prices, quality, access and innovation of healthcare services. The FTC has long been critical of COPAs, regulatory agreements adopted by state governments to permit mergers the federal government may otherwise have sought to prevent on anticompetitive grounds.
Health systems that received the demand letters include Johnson City, Tenn.-based Ballad Health, which formed through a COPA approved by the states of Tennessee and Virginia and Cabell Huntington Hospital in Huntington, West Virginia, which acquired a rival provider under a COPA approved by West Virginia. Aetna, Anthem, Blue Cross and Blue Shield of Tennessee, Cigna Corp. and UnitedHealthcare also received orders. None of the insurers responded to requests for comment.
There is some indication that providers may challenge the FTC's authority to demand the information.
Teresa Hicks, a spokeswoman for Ballad, said in a statement that Ballad appreciates the important role the FTC plays in matters subject to federal law, including "the important Supreme Court and constitutional doctrine of the states' rights to regulate economic activity within the states."
"We are reviewing the request by the FTC within the context of the actions of two legislatures and two governors of two different parties that passed legislation specifically asserting state action immunity," she said.
When asked whether Ballad is reviewing whether the FTC has the authority to obtain this information, Hicks replied that Ballad's statement speaks for itself.
A spokeswoman for Cabell Huntington Hospital said only that the system had received the request and is evaluating it.
Dr. Robert Berenson, a fellow with the Urban Institute, wrote in an email that collecting data on the performance of COPAs will help bring empirical data to what so far has been "mostly ideological opinions about whether these mergers are desirable."
Berenson said he does not have an opinion on the FTC's authority in demanding the information.
The amount of information the FTC is demanding is extensive.
The agency wants the two providers to send records related to all inpatient admissions from Jan. 1, 2011 to the present aggregated on a monthly basis, computed separately for Medicaid, Medicare, commercial and all other patients. The data must include the number of patients, total billed charges and total amounts paid by health plans and patients, among other details.
It also wants providers to send any changes in pricing for any services since Jan. 1, 2011. The FTC wants to see all quality of care initiatives and population health initiatives and the effects of those. It wants to see efficiencies, cost savings or benefits achieved as a result of the COPAs.
The FTC is demanding providers share a list of healthcare facilities they have opened, closed, expanded or otherwise modified since Jan. 1, 2011. It wants data on changes in ownership and certain capital investments.
The FTC requested providers share copies of each health plan contract in effect since Jan. 1, 2011.
Additionally, the FTC wants providers to send salary information, hours and benefits information on each employee since Jan. 1, 2011. The agency said it is also studying the impact of hospital consolidation on employee wages.
From insurers, the agency wants a lengthy list of patient records related to patient admissions, outpatient visits, skilled nursing visits, hospice episodes and other types of care in the COPA coverage areas from Jan. 1, 2011 to the present. The information includes billed charges, diagnosis codes, insurance coverage and many other metrics.
All of the information must be provided by Jan. 21, 2020, the FTC wrote in its demand letters to providers and insurers.
"Penalties may be imposed under applicable provisions of federal law for failure to file special reports or for the filing of false reports," the agency wrote in the letters.
The FTC indicated it planned to study COPAs at a June hearing on the subject, at which some panelists aired concerns about the Ballad merger. At the time, Richard Cowart, an attorney representing Ballad, said a federal government study on the subject, "is bordering on irresponsible, frankly."
Ballad has found itself at odds with community members following its 2018 merger. The health system swiftly rolled out changes to consolidate high-level services into its Johnson City hospital, and critics say the changes have prompted unsafe conditions, staff shortages, long waits and heftier bills.