1. Managing Antitrust Risks in
Care Collaborations
Sharon E. Caulfield, Esq.
Leading Age Annual Meeting + Nashville + October 22,2014

2. The ACA: Targeting the “Triple Aim”
Improving the U.S. health care system requires simultaneous pursuit of three aims:
Improving the experience of care,
Improving the health of populations, and
Reducing per capita costs of health care
Health Affairs 27, no. 3 (2008): 759–769; /hlthaff

3. The Triple Aim Implementation
Conditions for Success:
enrollment of an identified population,
commitment to universality for its members, and
an “integrator” that accepts responsibility for all three aims for that population.
The Integrator’s Role:
partnerships with individuals and families,
redesign of primary care,
population health management,
financial management,
macro system integration.

4. Drivers of the Reform Environment
The Integrator of Care will most likely be Hospitals and Medicare Primary Care
If outside of Medicare: Supported by payors
Value-based relationships
Cost:
Identify low cost or efficient providers
Quality:
Identify quality measurements
Chronic condition management
For LTC: focus on reducing hospital re-admits
Focus: low cost high quality (where quality = predictable results and reductions of inefficiency)

5. Reform Effect on Insurance Types: More Consistent Environment
LICENSED INSURANCE PRODUCTS
(inc. LTC insurance)
REGULATED BY STATE DIVISION OF INSURANCE
CONFORM TO FEDERAL MANDATES AND ADDITIONAL STATE MANDATES
ERISA AND
GOVERNMENT SPONSORED PLANS
REGULATED BY US DEPARTMENT OF LABOR
CONFORM TO FEDERAL MANDATES
GOVERNMENT PROGRAMS
(MEDICARE, MEDICAID)
REGULATED BY US DEPARTMENT OF HEALTH AND HUMAN SERVICES
UNINSURED
FEDERAL: TAX EXEMPT, MEDICARE
STATES: VARY
PATCH WORK OF LAWS & REGULATIONS

6. Health Care Reform – New Payment Paradigms on Top of Ongoing Systems
Medicare/aid Fee for service
Critical Access Hospital, ESRD, etc. cost-based reimbursement
ASC reimbursements
Commercial payor FFS contracts
Continuation of Medicare Part C and D plans
“New” systems
“Shared Savings Model” of PPACA
MedPAC hospital proposal: “two-sided model”
MedPAC post acute care – bundled payments:

7. Medicare Shared Savings Program Accountable Care Organizations
ACOs are health care providers that have organized into a legal structure that agree to be accountable for the quality, cost, and overall care of Medicare beneficiaries who are assigned to the ACO

8. ACO Shared Savings Proposal
When Medicare ACO meets or exceeds spending targets for its population, it is rewarded with a share of the overall savings
Shared Savings*
*Algorithm for shared savings has not been determined

9. Not many have been formed due to complexity
Compliance & Legal Challenges for ACOs
Not many have been formed due to complexity
Federal
Reform
State
Reform
Accountable Care
Organizations
Stark
Credentialing
Anti-Kickback
Insurance
Regulation
Visual of some of the challenges
Tax
Exemption
Peer
Review
Protection
Antitrust
Tax 9

10. So -- Not doing an ACO? Bundled Payment Initiative
Working with commercial payors
This may require developing a joint venture or other collaborative organization to share information about care systems, costs, and quality
Take Care: There are antitrust risks

11. Antitrust regulators are not slacking under the ACA
Statement of Antitrust Enforcement Policy regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program
October 2011
Addresses also informal ACOs, not just MSSP ACOs
“The Agencies will vigilantly monitor complaints about an ACO’s formation or conduct and take whatever enforcement action may be appropriate.”

12. Antitrust Enforcement post-ACA: A Continuation of Prior Policy
See -- Statements of Antitrust Enforcement Policy in Healthcare (1996)
What’s ok? The 2011 Statement reiterates:
“An ACO that does not impede the functioning of a competitive market will not raise competitive [compliance] concerns.”

13. Avoiding Antitrust Problems
What Post-Acute Providers Need to Know
Key issues
= Price fixing
= Interference with market forces
Both Federal and State enforcement activities are possible

14. Key Antitrust Concepts
Price Fixing:
Contract, combination or Conspiracy
Among Competitors
In Restraint of Trade
(A single integrated entity cannot compete with itself)
Monopolization:
Using a monopoly or conspiring to monopolize
Effect is restraint of trade
(Monopoly power generally 30% of the geographic or product market)

15. Safety Zones per 2011 Antitrust Enforcement Policy
Avoid monopoly power:
Single provider of each service line has 30% or less of the work within the service area
If there is a dominant provider, e.g. the hospital, the hospital is non-exclusive with this collaborative group

16. Good Guidance to Show General Antitrust Awareness
Avoid:
Sharing competitive information that is not necessary for the collaboration
E.g. pharmacy or labor pricing
Setting specific prices for services among competitive, non-integrated post-acute care providers – NO to Price Fixing
E.g. a standardized per diem rate, a standard rate for outpatient physical therapy, a standard transportation rate, without integration

17. Good Guidance to Show Antitrust Awareness
Demonstrate:
Comparative Effectiveness and Quality Data
Benefits Management for Cost Control
E.g. pharmacy, chronic diseases, claims integrity
Patient Care Improvements
Shared communications, technology, data, physician/staff education
Additional Services Enabled by Collaboration
E.g. home care followup; nutritional services, family support

18. THANK YOU! Sharon E. Caulfield, Esq. Caplan and Earnest LLC
1800 Broadway, #200
Boulder, CO 80302