Health systems across the nation are consolidating to meet the demands of the Patient Protection and Affordable Care Act. However, some systems may be unable to meet many of the health reform law's goals, including integrating hospitals and physician groups, due to antitrust challenges, according to a recent blog post by Philip H. Lebowitz, a partner at Philadelphia-based Duane Morris.
Mr. Lebowitz provided his thoughts on the following challenges health systems face due to the incompatibility of the healthcare marketplace and antitrust laws.
1. Price-fixing allegations being brought against healthcare providers that try to negotiate with commercial payers are an example of the friction between the healthcare marketplace and antitrust laws, according to Mr. Lebowitz. These types of claims have "significantly strengthened the hands of payers in a way that failed to produce the benefits of a competitive marketplace," he said.
2. As another example of incompatibility, Mr. Lebowitz mentioned an antitrust lawsuit that is currently pending in Florida federal court against Rockledge, Fla.-based Health First and three of its wholly owned subsidiaries — an insurer, a hospital and a physician practice group. The case was brought by several physicians and physician groups and accuses HealthFirst of maintaining a monopoly.
This lawsuit exemplifies another challenge concerning the intersection of the PPACA and antitrust laws. Mr. Lebowitz wrote, "Essentially, by fully integrating its business and incentivizing in-network referrals and managed care pricing, Health First became vulnerable to claims of tying, exclusive dealing, price discrimination and monopolization."
3. Given the pressure on hospitals and systems to consolidate to meet the requirements of the PPACA, Mr. Lebowitz believes the antitrust laws are going to have to respond to allow systems and hospitals to provide highly integrated care without violating antitrust laws in the process. In the meantime, or if the laws aren't adjusted, Mr. Lebowitz believes courts will continue to reach contradictory results as they try to apply antitrust precedent to rapidly changing healthcare structures.
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