Justice Department’s New Health Care Task Force Announces Continued Aggressive Antitrust Enforcement | Sheppard Mullin Richter & Hampton LLP

The healthcare industry has been the subject of particular antitrust attention in recent years, including recent policy initiatives, private equity warnings, and enforcement actions by both the Department of Justice (DOJ) and the Federal Trade Commission (FTC). The new Health Care Monopoly and Collusion Task Force (HCMC), announced this month by the Department of Justice, is the latest example of antitrust scrutiny of the industry.

Like another recent DOJ Antitrust Division task force, the Procurement Collusion Strike Force (PCSF), HCMC will bring together government enforcement officials to share expertise and coordinate investigations and actions. However, reflecting the agency’s attention to the complex and evolving nature of the health care industry, HCMC will include policy and industry experts, economists and data scientists, among others. The Justice Department’s statement indicated a focus on vertical consolidation of payers, providers and data. Executives, investors and legal advisors should expect increased criminal and civil enforcement actions targeting all aspects of the healthcare industry.

Enforcement

If the PCSF is any example, HCMC will likely mark a further increase in the number of antitrust investigations and enforcement actions in the healthcare industry that have already reached high levels. By comparison, in its first five years of operation, the Department of Justice touts that the PCSF has already initiated more than 100 investigations and obtained more than 50 charges and convictions.

Notably, HCMC’s announcement included the launch of a new webpage on the Antitrust Divisions’ website dedicated to public reporting. The site provides simple explanations of potential harms under antitrust law and includes both a hotline and a complaints portal. The results of this attempt to encourage consumers to provide information remain to be seen, as many of the anticipated breaches would require insider knowledge or the assistance of legal counsel to understand or even detect.

Policy

In addition to enhancing enforcement efforts, the task force will guide the Antitrust Division’s policy and overall strategy and facilitate “policy advocacy.” The inclusion of a policy direction – other than the PCSF’s goals – is not surprising given the agency’s propensity for more aggressive antitrust policies and actions such as the Department’s withdrawal of key health policy statements last year. While policy effects may become apparent later, they could shape the future of the industry.

Why it matters

While the Department of Justice and the FTC continue to aggressively review health care transactions under the new merger guidelines, there will likely be increased scrutiny of business practices that could result in civil and criminal liability under the Sherman and Clayton Acts. Currently, common practices and evolving methods of coordination in the healthcare and healthcare technology industries may require closer examination.