Government agencies soften stance on what constitutes price fixing.

The Federal Trade Commission and the Department of Justice have modified their views on what constitutes price fixing by integrated delivery systems. Recently released enforcement policy statements indicate that joint agreements on price between competing providers will not necessarily constitute price fixing, even without risk sharing, if the system is sufficiently integrated. The enforcement policy statements indicate that if integration arises from the combined efforts of previously competing providers, involves improvements in clinical efficiency or quality, and demonstrates no anticompetitive intent, it will be sufficient to withstand Federal scrutiny.

How PHOs can avoid price-fixing charges.

Last fall, the U.S. Department of Justice (DOJ) sent the message to PHOs that when negotiating with third parties, they need to be careful not to break antitrust laws, or they could face heavy monetary damages--or even criminal liability. In settlements with PHOs in Danbury, Connecticut, and St. Joseph, Missouri, the DOJ said that PHOs could not become involved in pricing decisions unless they acted in one of two ways: as a qualified managed care plan in which providers share financial risk or as a messenger between providers and third parties. The two cases show how networks may and may not engage in negotiations with payers.

Avoiding antitrust liability for denial of access to resources: some safe harbors.

Antitrust issues frequently arise in connection with claims that providers were denied access to institutions, such as hospitals and payors, and their resources. This article sets forth some "safe harbors," circumstances under which liability is unlikely, that may often avoid antitrust liability in denial of access cases.

Focusing on economic realities can advance hospital mergers.

Hospital executives and even many attorneys frequently misunderstand the antitrust risks raised by hospital mergers and acquisitions. On one hand, until recently some people incorrectly believed that not-for-profit hospital mergers and acquisitions would not be subject to governmental scrutiny. On the other hand, many analyze hospital mergers and acquisitions by applying standard antitrust principles, without considering the unique features of, or recent developments in, the healthcare market. Yet the special characteristics of the hospital industry today can lead to approval of mergers under circumstances that in other industries would likely lead to a court challenge. The investigation by the Federal Trade Commission or the Justice Department's Antitrust Division is pivotal. Governmental investigators are willing to consider the impact of the new economic conditions affecting hospitals. Factors to consider when trying to determine whether a hospital merger or acquisition will raise antitrust concerns are: 1. Market shares of the parties. 2. Factors that relate to market size. 3. Potential for substantial cost savings. 4. Potential for expanding services. 5. Significant weaknesses in one or both hospitals. 6. Presence of strong buyers in the market. 7. Evidence that merging hospitals complement one another. 8. Examples of vigorous competition between hospitals and outpatient facilities. 9. Whether the parties involved must provide advance notice of the transaction to the government.