Does DOJ’s Withdrawal Of Healthcare Enforcement Policies Have Broader Implications For Information Exchange And Benchmarking Activities?

On February 3, 2023, the Antitrust Division of the U.S. Department of Justice (DOJ) announced that it was withdrawing three “outdated” antitrust enforcement policy statements related to healthcare markets.  “After careful review and consideration, the division has determined that the withdrawal of the three statements is the best course of action for promoting competition and transparency,” the agency stated in a press release, with DOJ Antitrust Division head Jonathan Kanter explaining that “The healthcare industry has changed a lot since 1993, and the withdrawal of that era’s out of date guidance is long overdue.”

Included among the three guidance documents was the August 1996 Statements of Antitrust Enforcement Policy In Health Care issued jointly by the DOJ and the Federal Trade Commission (FTC).  In Statement 6.A of that document, the DOJ and FTC declared that “[p]articipation by competing providers in surveys of prices for health care services, or surveys of salaries, wages or benefits of personnel, does not necessarily raise antitrust concerns,” and even acknowledged that “such surveys can have significant benefits for health care consumers.”  Seeking to establish an “antitrust safety zone,” the DOJ and FTC declared that they would not challenge “absent extraordinary circumstances” provider participation in written surveys if (1) the survey was managed by a third party; (2) the information provided by participants was based on data more than three months old; and (3) there were at least five participants, with no individual participant’s data representing more than 25% of any statistic, so that recipients could not identify the prices charged or compensation paid by any particular participant.

Although issued as guidance specific to the health care industry, the DOJ/FTC Health Care Statements—and in particular Statement 6.A and the “antitrust safety zone” it defined—have been used across a range of industries over the past 25 years by antitrust practitioners to minimize the antitrust risk of information exchange and benchmarking activities.  Statement 6.B of the Health Care Statements described the approach of the DOJ and FTC more generally toward exchanges of price and cost information outside the “antitrust safety zone,” and observed that exchanges of historical data would be evaluated “to determine whether the information exchange may have an anticompetitive effect that outweighs any procompetitive justification for the exchange,” which tracks longstanding precedent describing those sorts of information exchanges as subject to the so-called “rule of reason” for antitrust purposes.  Statement 6.B also warned that “[e]xchanges of future prices for provider services or future compensation of employees are very likely to be considered anticompetitive,” and if they result in an agreement among competitors as to the prices to be paid for services or wages, then “that agreement will be considered unlawful per se.” This again tracks longstanding precedent prohibiting price-fixing agreements under Section 1 of the Sherman Act.

Because Statement 6 of the Health Care Statements was based on longstanding precedent regarding information exchanges and benchmarking activity, the recent withdrawal by the DOJ of that policy statement is unlikely to have a significant impact outside the health care industry.  With the DOJ’s recent announcement, health care industry participants will no longer be able to rely upon the “antitrust safety zones” defined in the Health Care Statements, as well as guidance provided in two other DOJ documents:  a 1996 policy statement focused on cooperative cost-cutting arrangements among health care providers; and a 2011 policy statement regarding accountable care organizations participating in the Medicare shared savings program.  As the DOJ acknowledged in its February 3, 2023 press release, however, “[g]uidance documents are non-binding and do not create legal rights or obligations.” The DOJ’s most recent announcement certainly hints at more robust antitrust enforcement in the health care industry, but it is Congress and the courts, not the DOJ, that define and decide the scope of the antitrust laws in the United States.