The Federal Trade Commission says New York's Certificate of Public Advantage regulations that provide antitrust exemptions for the state's implementation plan for Medicaid redesign "are unnecessary because antitrust law already permits healthcare collaborations that benefit consumers."
The New York State Department of Health says it will move forward with its Medicaid performing provider systems, despite "strong concerns" from the Federal Trade Commission that the healthcare collaboratives are anticompetitive.
New York State's Delivery System Reform Incentive Program (DSRIP), created in April 2014, is the $6.43 billion implementation plan for the state's Medicaid redesign, with a target of reducing avoidable hospital visits by 25% within five years. Provider payouts will be based upon meeting benchmarks in system transformation, clinical management and population health.
In a letter this month, the FTC said New York's Certificate of Public Advantage (COPA) regulations that provide antitrust exemptions for DSRIP "are unnecessary because antitrust law already permits healthcare collaborations that benefit consumers."
"We write to express strong concerns that the COPA regulations, as well as the underlying authorizing legislation, are based on inaccurate premises about the antitrust laws and the value of competition among healthcare providers," the FTC said.
"Because procompetitive healthcare collaborations already are permissible under the antitrust laws, the main effect of the COPA regulations is to immunize conduct that would not [sic]generate efficiencies and therefore would not [sic] pass muster under the antitrust laws. Therefore, COPAs are likely to lead to increased healthcare costs and decreased access to healthcare services for New York consumers."
The New York State Department of Health issued a brief statement that read: "DOH is reviewing the letter from the FTC. In the meantime, DOH is moving forward with the Delivery System Reform Incentive Payment program and does not anticipate that the issues the FTC raises will have any impact on the Performing Provider Systems (PPS) that are working to transform the Medicaid system to provide improved care at a lower cost."
The FTC said the DSRIP PPS networks "are comprised of substantial portions of competing healthcare providers within their respective geographic regions," and itsingled out three newly formed PPS's as cause for concern. They are: Adirondack Health Institute PPS, based in Glens Falls; Advocate Community Partners PPS in New York City; and Staten Island PPS. Adirondack declined to comment, and Advocate Community Partners and Staten Island did not return emailed queries.
The federal agency said it's concerned that "combining the DSRIP program with the COPA regulations will encourage healthcare providers to share competitively sensitive information and engage in joint negotiations with payers in ways that will not yield efficiencies or benefit consumers."
And while the DSRIP program applies only to Medicaid, the FTC said the potential anticompetitive effects of information sharing and joint payment negotiations under a COPA could spill over to include commercial and Medicare patients.
As an example, the FTC said it would be possible for PPS's "to share information about all of their patient populations – including commercial, Medicare, and Medicaid patients – in order to properly implement the value-based payment models contemplated under the DSRIP program."
"The goals of antitrust are consistent with the goals of the (Affordable Care Act)," the FTC said. "Despite what some healthcare industry participants have claimed, the antitrust laws do not prohibit the kinds of collaboration necessary to achieve the healthcare reforms contemplated by the ACA. Specifically, antitrust is not a barrier to New York healthcare providers who seek to form procompetitive collaborative arrangements that are likely to reduce costs and benefit healthcare consumers through increased efficiency and improved coordination of care."
John Commins is the news editor for HealthLeaders.