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Department of Justice creates health care task force to address competition concerns

The announcement by the U.S. Department of Justice (DOJ) to create a new health care task force signals an even greater focus on addressing competition issues in the health care industry. Large, multi-stakeholder platforms engaged in multiple sectors (e.g.insurance companies purchasing medical practices and/or core healthcare IT and data services) are a key enforcement target.

WHAT HAPPENED:

  • On May 9, 2024, the Department of Justice announced the creation of the Healthcare Monopoly and Collusion Task Force (HCMC) within the Antitrust Division. The HCMC will be tasked with directing and developing political support and conducting investigations – and ultimately civil ones AND criminal enforcement actions – in healthcare markets.
  • Deputy U.S. Attorney General Jonathan Kanter said HCMC will “identify and root out monopolies and collusion that drive up costs, lower quality and create single points of failure in the health care industry.” The press release detailed the following non-exhaustive set of issues that will be priority areas for HCMC: payer and provider consolidation, serial acquisitions, labor, quality of care, medical billing, health IT services, and access to and misuse of health care data .
  • Announcing the formation of the task force at Washington Post Office During the live event, Kanter emphasized the changing nature of the healthcare market. In what he coined “platformization healthcare” patients and consumers now interact with “multi-faceted giants, intermediaries with a coordinated set of interoperating enterprises, including payers, including providers, including PBMs, claims processors, banks” who have become “the gatekeepers of our health care system.” According to Kanter, it is extremely important for the Antitrust Division to adapt its policy and enforcement strategies in health care to the new market realities.
  • HCMC will be led by Katrina Rouse, an antitrust prosecutor at the Department of Justice since 2011, who previously served as chief of the Defense, Industrial and Aerospace Section and as trial attorney in the Health Care and Consumer Products Section. Rouse will oversee a team of civil and criminal prosecutors, economists, health care and technology experts, data analysts, investigators and policy advisers.

WHAT DOES IT MEAN:

  • Antitrust enforcement agencies have used similar task forces in the past to concentrate resources and gather subject matter expertise. For example, the Department of Justice’s Purchasing Collusion Strike Force has successfully investigated and prosecuted government procurement cases.
  • The launch of HCMC reflects growing efforts by antitrust enforcement agencies to respond to changing dynamics in the healthcare space and address the potential harmful effects of these changes on patients, healthcare professionals and communities. In March 2024, the Department of Justice, the Federal Trade Commission (FTC), and the U.S. Department of Health and Human Services (HHS) jointly launched an intergovernmental investigation into the growing role of private equity firms in health care transactions and whether such firms are prioritizing is to maximize profits at the expense of quality and affordability of health care.
  • It is worth noting that the Department of Justice, not the FTC, typically investigates mergers involving health plans and contracting issues between health plans and health care providers. As a result, healthcare industry participants, including health plans, hospitals, physician offices, information technology and data processing companies, should be increasingly vigilant in their antitrust compliance efforts, given the immediate focus of the newly created task force on monopolizing practices and collusion in this space.
  • Companies that believe they are being harmed by consolidation and collusion in any aspect of the healthcare industry also have the opportunity to offensively raise the issue by contacting HCMC. The Department of Justice, the FTC and HHS previously announced the creation of a portal – healthcompetition.gov – through which citizens can report suspected anticompetitive practices in the health care industry.