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The Federal Trade Commission and Department of Justice issued a joint statement about how the agencies will enforce U.S. antitrust laws in regard to new Accountable Care Organizations – groups of health care providers that will be collaborating under the Affordable Care Act of 2010 to improve health care quality and reduce costs.

The joint proposed Policy Statement solicits public comment on the antitrust agencies’ proposed guidance to ensure that newly formed collaborative care organizations, known as ACOs, can innovate to serve Medicare beneficiaries and patients with private health insurance, without raising competitive concerns. The proposed Policy Statement would create an antitrust “safety zone” for certain ACOs and establish expedited antitrust reviews for others.

“The Administration has led an unprecedented, collaborative effort among all of the agencies responsible for developing guidance for ACOs,” said FTC Chairman Jon Leibowitz. “This guidance will help ensure that ACOs meet their goals of improving quality and lowering costs while minimizing the regulatory burden on health care providers.”

The 2010 Act encourages health care providers to form integrated organizations to jointly offer services in order to reduce costs and improve the quality of patient care in the United States. The goal of these joint provider organizations – ACOs – is to better coordinate care, leading to efficiencies and cost savings for consumers. Under the Act, ACOs will serve fee-for-service beneficiaries through Medicare’s Shared Savings Program and must sign up with the Department of Health and Human Services’ Centers for Medicare and Medicaid Services (CMS) to participate in the program for at least three years, starting January 1, 2012.

The FTC and DOJ recognize that ACOs may generate opportunities for health care providers to innovate in both the Medicare and commercial markets to achieve the cost savings Congress intended when establishing the Shared Savings Program. At the same time, however, the agencies also understand that collaborations among competitors – as will occur through the formation of ACOs – may raise concerns about competition. The FTC and DOJ have jointly developed the proposed antitrust Policy Statement to coordinate competition analysis with CMS’s review of ACO applications, to ensure the newly formed organizations do not lead to reduced competition and higher prices for consumers.

The joint Policy Statement is intended to ensure that health care providers have the antitrust guidance they need to form procompetitive ACOs. It describes: 1) the ACOs to which it will apply; 2) when the FTC and DOJ will apply particular antitrust analyses to those ACOs; 3) an antitrust safety zone for certain ACOs; 4) the CMS-mandated antitrust review process for certain other ACOs; and 5) options for ACOs to gain additional antitrust clarity if they fall outside the safety zone but below the CMS-mandated antitrust threshold.

As described in the Policy Statement, the FTC and DOJ will evaluate applicants that meet CMS eligibility criteria for the Shared Savings Program based on the ACOs share of services in each participant’s Primary Service Area, or PSA. ACOs with high PSA shares may pose a higher risk of being anticompetitive and also may reduce quality, innovation, and choice for both Medicare and commercial patients. High PSA shares may reduce the ability of competing ACOs to form, and could allow an ACO to raise prices charged to commercial health plans above competitive levels.

Depending on an ACO’s range of PSA shares, CMS may mandate, or an ACO may choose to seek, an expedited antitrust review. An ACO will submit its request for expedited review to both the FTC and DOJ, and the agencies will determine which of the two will review the request. The FTC and DOJ have committed to a 90-day expedited review of ACOs that are subject to mandatory review, or that seek expedited review, once all required documents and information have been received. The FTC and DOJ will establish a Joint ACO Working Group to collaborate and discuss issues arising out of ACO reviews. This process will allow ACOs to rely on the expertise of both agencies and will ensure efficient, cooperative, and expeditious reviews.

The FTC and DOJ are accepting public comment on the proposed Policy Statement through May 31, 2011. The agencies are seeking comments from health care providers, payers, consumers, antitrust practitioners, and other stakeholders on issues including:

  • Whether, and if so why, the guidance in the proposed Policy Statement should be changed in any respect;
  • Whether other data sources exist that ACO applicants could use to determine relevant PSA shares for: 1) physician services rarely used by Medicare beneficiaries (e.g., pediatrics, obstetrics); and 2) inpatient hospital services located in states where all-payer hospital discharge data are unavailable; and
  • Whether providing the documents and information required to obtain an expedited antitrust review will present an undue burden on ACO applicants.

Comments can be submitted electronically here. The Federal Register notice announcing the proposed Policy Statement contains information on submitting comments via mail, and can be found here. The proposed Policy Statement can be found here and as a link to this press release on the FTC’s website.

The Commission vote approving the proposed Policy Statement and related Federal Register notice was 4-1. Commissioner J. Thomas Rosch dissented. He generally agrees with the analytical framework described in the proposed Policy Statement but dissents because of the statement’s suggestion that the formation of ACOs will be reviewed by both the FTC and the DOJ. Commissioner Rosch believes that responsibility for reviewing the formation of ACOs should remain with the Commission because: 1) the Antitrust Division currently has far less expertise or experience than the Commission in reviewing the formation of ACOs or applying the antitrust laws to them; and 2) the Antitrust Division is more susceptible than the Commission, an independent agency, to lobbying and other political pressure. In his view, the evaluation of some ACOs by the Antitrust Division represents a victory for physicians and hospitals – as well as their lobbyists and political supporters – which have opposed Commission review and antitrust enforcement of clinically-integrated health care providers.

The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to, or write to the Office of Policy and Coordination, Room 394, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave, N.W., Washington, DC 20580. To learn more about the Bureau of Competition, read Competition Counts. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

(FTC File No. V100017)

Contact Information

Cecelia Prewett, Director,
Office of Public Affairs

Mitchell J. Katz
Office of Public Affairs
Susan S. DeSanti, Director
Office of Policy Planning