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Obamacare, Antitrust Laws Can Coexist, Says FTC Official

By Jad Chamseddine, CQ Roll Call

December 15, 2015 -- A top Federal Trade Commission (FTC) official is denying accusations by congressional Republicans and medical providers that the health care law has triggered excessive industry consolidation.

Federal antitrust rules can regulate competition in harmony with the Affordable Care Act, the White House's landmark legislative achievement, according to Deborah Feinstein, director of the FTC's Bureau of Competition. Republicans have criticized the health law, which mandates that individuals carry health insurance or face a penalty, since its passage in 2010. Republicans have pointed to statistics showing that mergers among hospitals nearly doubled between 2009 and 2013. 

"We frequently hear that there is a conflict between the Affordable Care Act (ACA) and antitrust enforcement," Feinstein said Tuesday at the National Press Club in Washington. "The goals of the ACA are in harmony and not in conflict."

Feinstein added that the health law does not bar hospitals and other providers from corroborating unless it is done in an anti-competitive manner, such as in fixing prices. "There are other practical ways of achieving coordinated care and alternative payment models beyond merging with a close competitor," Feinstein said.

The FTC, which shares antitrust enforcement duties with the Justice Department, is mainly in charge of reviewing mergers by providers such as hospitals and pharmaceutical companies, while the Justice Department typically oversees consolidation among insurers.

Feinstein said her agency would not block a merger of hospitals or physician-owned practice groups that improves quality with a slight price increase. She added that transactions the FTC takes issue with are often unnecessary and deliver no economical benefit to consumers. Injunctions filed to prevent these mergers are rare, with the FTC only challenging a "handful" of the "hundreds of these transactions" that occur annually, she said.

Even so, the FTC has stepped up enforcement efforts in blocking anti-competitive hospital mergers. Buoyed by recent high-profile victories in federal court such as the blocking of Idaho's St. Luke Health System Ltd.'s acquisition of Saltzer Medical Group PA and forcing Ohio's ProMedica to divest itself of St. Luke's Hospital in Toledo, the FTC is sending a message to the hospitals and physician-owned practice groups to work within the confines of these laws.

Feinstein said the FTC had to change its strategy after experiencing a "losing streak" when trying to block hospital mergers in the 1990s. That included developing better economic models to examine competition.

Just last week, the FTC was joined by the Pennsylvania Attorney General's office in blocking the proposed merger between hospitals PinnacleHealth System and Penn State Hershey Medical Center on grounds that the combination would hurt consumers.

Feinstein also addressed growing concern among some lawmakers in Congress that drug prices are increasing too rapidly, saying the FTC cannot control costs because it is not a regulatory body that can put a cap on prices.

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