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ACO Alerts: Antitrust & Exempt-Status Implications

Karen Minich-Pourshadi, for HealthLeaders Media, October 24, 2011

Does the final (and greatly revised) rule for establishing an accountable care organization have your organization’s healthcare leaders champing at the bit to participate? If so, proceed with caution and consider the antitrust and tax-exempt status implications.

“I still have some concerns around the antitrust issue. … The rules are still very technical and obviously an organization like I run is very cautious. We don’t want to get in trouble with the government,” says Chris Van Gorder, president and CEO of Scripps Health, a $2 billion-plus not-for-profit health system in San Diego.

Accompanying the release of the new rules governing ACOs on Thursday came a joint statement of enforcement policy from the Department of Justice and the Federal Trade Commission on the antitrust law implications of the ACO regulations, as well as Internal Revenue Service guidance for tax-exempt organizations. Though the guidelines from all three agencies are written to encourage the establishment of ACOs, these documents also give firm parameters on where not to tread.

Michael Regier, senior vice president of legal and corporate affairs, general counsel, and compliance officer for VHA Inc., a healthcare network of 1,400 not-for-profit hospitals, says that while the changes to the guidelines make ACOs more attractive, there remain antitrust and exempt status considerations which must be addressed by any ACO participant.

“There’s no question, even with the new changes to the ACO rules, the antitrust implications remain high on the [DOJ and FTC] agencies’ radar,” says Regier.

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