FTC to Study the Impact of COPAs

The Federal Trade Commission issued orders to five health insurance companies and two health systems to provide information that will allow the agency to study the effects of certificates of public advantage (COPAs) on prices, quality, access, and innovation of healthcare services. The FTC also intends to study the impact of hospital consolidation on employee wages.

COPAs are regulatory regimes, adopted by state governments that are intended to displace competition among healthcare providers. COPAs purport to immunize mergers and collaborations from antitrust scrutiny under the state action doctrine. FTC staff are engaged in an ongoing policy project to assess the effects of COPAs, which includes the study of COPAs recently approved for Ballad Health in Tennessee and Virginia, and Cabell Huntington Hospital in West Virginia.

The five health insurance companies receiving orders from the FTC are: 1) Aetna, Inc., 2) Anthem, Inc., 3) BlueCross BlueShield of Tennessee, 4) Cigna Corporation, and 5) United Healthcare. These orders seek patient-level commercial claims data. The two health systems receiving orders from the FTC are: 1) Ballad Health and 2) Cabell Huntington Hospital, Inc. These orders seek aggregated patient billing and discharge data; health system employee wage data; and other information relevant for analyzing the health systems’ prices, quality, access, and innovation.

In June 2019, the FTC held a public workshop to present empirical research on the price effects of three COPAs approved in the 1990s—including Benefis Health System in Montana, Palmetto Health in South Carolina, and Mission Health in North Carolina—and to hear from numerous stakeholders about their experiences with COPAs. Workshop testimony and public comments informed the current study design.

The FTC intends to collect information over the next several years that will help FTC staff to conduct retrospective analyses of the Ballad Health and Cabell COPAs. Once the study is complete, the FTC intends to report publicly the study’s findings in a manner that is consistent with the FTC’s confidentiality rules. This project will enhance the agency’s knowledge of COPAs and inform future advocacy and enforcement. It will also serve as a resource for state governments and stakeholders who may be considering using COPAs.

The Commission is authorized to issue Orders to File a Special Report by Section 6(b) of the FTC Act. The Commission vote to approve issuing the orders was 5-0.

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