Proposed Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program, 21894-21902 [2011-9466]
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requirements on request for waiver of
the new eligibility requirement for
provider. This requirement aims to
allow potential providers to apply for
waiver of the new requirement so that
these providers may continue to provide
VRS on an interim basis until the new
certification process becomes effective.
Potential VRS providers wishing to
receive a temporary waiver shall
provide, in writing, a description of the
specific requirement(s) for which it is
seeking a waiver, along with
documentation demonstrating the
applicant’s plan and ability to come into
compliance with all of these
requirements (other than the
certification requirement) within a
specified period of time, which shall not
exceed three months from the date on
which the rules become effective.
Evidence of the applicant’s plan and
ability to come into compliance with the
new rules shall include the applicant’s
detailed plan for modifying its business
structure and operations in order to
meet the new requirements, along with
submission of the following relevant
documentation to support the waiver
request:
• A copy of each deed or lease for
each call center operated by the
applicant;
• A list of individuals or entities that
hold at least a 10 percent ownership
share in the applicant’s business and a
description of the applicant’s
organizational structure, including the
names of its executives, officers,
partners, and board of directors;
• A list of all of the names of
applicant’s full-time and part-time
employees;
• Proofs of purchase or license
agreements for use of all equipment
and/or technologies, including
hardware and software, used by the
applicant for its call center functions,
including but not limited to, automatic
call distribution (ACD) routing, call
setup, mapping, call features, billing for
compensation from the TRS fund, and
registration;
• Copies of employment agreements
for all of the provider’s executives and
CAs;
• A list of all financing arrangements
pertaining to the provision of Internetbased relay service, including
documentation on loans for equipment,
inventory, property, promissory notes,
and liens;
• Copies of all other agreements
associated with the provision of
Internet-based relay service; and
• A list of all sponsorship
arrangements (e.g., those providing
financial support or in-kind interpreting
or personnel service for social activities
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in exchange for brand marketing),
including any associated agreements.
Federal Communications Commission.
Marlene H. Dortch,
Secretary, Office of the Secretary, Office of
Managing Director.
[FR Doc. 2011–9407 Filed 4–18–11; 8:45 am]
BILLING CODE 6712–01–P
FEDERAL TRADE COMMISSION
Department of Justice
Antitrust Division
Proposed Statement of Antitrust
Enforcement Policy Regarding
Accountable Care Organizations
Participating in the Medicare Shared
Savings Program
FTC; Antitrust Division, DOJ.
Notice with comment period.
AGENCY:
FEDERAL RESERVE SYSTEM
ACTION:
Federal Open Market Committee;
Domestic Policy Directive of March 15,
2011
SUMMARY:
In accordance with Section 271.25 of
its rules regarding availability of
information (12 CFR part 271), there is
set forth below the domestic policy
directive issued by the Federal Open
Market Committee at its meeting held
on March 15, 2011.1
The Federal Open Market Committee
seeks monetary and financial conditions
that will foster price stability and
promote sustainable growth in output.
To further its long-run objectives, the
Committee seeks conditions in reserve
markets consistent with federal funds
trading in a range from 0 to 1⁄4 percent.
The Committee directs the Desk to
execute purchases of longer-term
Treasury securities in order to increase
the total face value of domestic
securities held in the System Open
Market Account to approximately $2.6
trillion by the end of June 2011. The
Committee also directs the Desk to
reinvest principal payments from
agency debt and agency mortgagebacked securities in longer-term
Treasury securities. The System Open
Market Account Manager and the
Secretary will keep the Committee
informed of ongoing developments
regarding the System’s balance sheet
that could affect the attainment over
time of the Committee’s objectives of
maximum employment and price
stability.
By order of the Federal Open Market
Committee, April 6, 2011.
William B. English,
Secretary, Federal Open Market Committee.
[FR Doc. 2011–9364 Filed 4–18–11; 8:45 am]
BILLING CODE 6210–01–P
1 Copies of the Minutes of the Federal Open
Market Committee at its meeting held on March 15,
2011, which includes the domestic policy directive
issued at the meeting, are available upon request to
the Board of Governors of the Federal Reserve
System, Washington, DC 20551. The minutes are
published in the Federal Reserve Bulletin and in
the Board’s Annual Report.
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The FTC and DOJ (the
‘‘Agencies’’) are proposing an
enforcement policy regarding the
application of the antitrust laws to
health care collaborations among
otherwise independent providers and
provider groups, formed after March 23,
2010, the date on which the Patient
Protection and Affordable Care Act was
enacted, that seek to participate, or have
otherwise been approved to participate,
as accountable care organizations
(ACOs) under the Medicare Shared
Savings Program, Section 3022 of the
Affordable Care Act (Patient Protection
and Affordable Care Act, Public Law
111–48 (2010) and the Health Care and
Education Reconciliation Act of 2010,
Public Law 111–52 (2010)).
DATES: Public comments must be
received on or before May 31, 2011.
ADDRESSES: Interested parties are
invited to submit written comments
electronically or in paper form, by
following the instructions in the
Request for Comment part of the
SUPPLEMENTARY INFORMATION section
below.
FOR FURTHER INFORMATION CONTACT:
Daniel Gilman, (202) 326–3136 (FTC) or
Gail Kursh, (202) 307–5799 (DOJ).
SUPPLEMENTARY INFORMATION:
Proposed Statement of Antitrust
Enforcement Policy Regarding
Accountable Care Organizations
Participating in the Medicare Shared
Savings Program
I. Introduction
The Patient Protection and Affordable
Care Act and the Health Care and
Education Reconciliation Act of 2010
(collectively, the ‘‘Affordable Care Act’’)
seek to improve the quality and reduce
the costs of health care services in the
United States by, among other things,
encouraging physicians, hospitals, and
other health care providers to become
accountable for a patient population
through integrated health care delivery
systems.1 One delivery system reform is
1 Patient Protection and Affordable Care Act,
Public Law 111–48 (2010); the Health Care and
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the Affordable Care Act’s Medicare
Shared Savings Program (the ‘‘Shared
Savings Program’’), which promotes the
formation and operation of Accountable
Care Organizations (‘‘ACOs’’ 2) to serve
Medicare fee-for-service beneficiaries.3
Under this provision, ‘‘groups of
providers * * * meeting the criteria
specified by the [Department of Health
and Human Services] Secretary may
work together to manage and coordinate
care for Medicare * * * beneficiaries
through an [ACO].’’ 4 An ACO may share
in some portion of any savings it creates
if the ACO meets certain quality
performance standards established by
the Secretary of Health and Human
Services through the Centers for
Medicare and Medicaid Services
(‘‘CMS’’). The Affordable Care Act
requires an ACO that wishes to
participate in the Shared Savings
Program to enter into an agreement with
CMS for not less than three years.5
Recent commentary suggests that
health care providers are more likely to
integrate their care delivery for
Medicare beneficiaries through ACOs if
they can also use the ACOs for
commercially insured patients.6 This
preference to operate in both the
Medicare and commercial markets
appears to reflect the significant
resources and time required to integrate
independent provider practices, a desire
to provide more patients—not just
Medicare patients—with the benefits of
integrated health care, and the intent to
develop new delivery and payment
systems with commercial purchasers of
health care services (including health
insurance plans and other private
payers).
The Federal Trade Commission and
the Antitrust Division of the Department
of Justice (the ‘‘Agencies’’) recognize that
ACOs may generate opportunities for
health care providers to innovate in
both the Medicare and commercial
markets and achieve for many
consumers the benefits Congress
intended for Medicare beneficiaries
through the Shared Savings Program.
Education Reconciliation Act of 2010, Public Law
111–52 (2010).
2 As used in this document, ‘‘ACO’’ refers to
Accountable Care Organizations under the
Medicare Shared Savings Program, which also may
operate in commercial markets. Patient Protection
and Affordable Care Act, Public Law 111–48,
section 2706 (2010).
3 Id.
4 Id.
5 Id.
6 Fed. Trade Comm’n & Dep’t of Health and
Human Serv., Workshop Regarding Accountable
Care Organizations, and Implications Regarding
Antitrust, Physician Self-Referral, Anti-Kickback,
and Civil Monetary Penalty (CMP) Laws (Oct. 5,
2010).
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Therefore, to maximize and foster
opportunities for ACO innovation, the
Agencies wish both to clarify the
antitrust analysis of newly formed
collaborations among independent
providers that seek to become ACOs in
the Shared Savings Program 7 and to
coordinate the antitrust analysis with
the CMS review of those ACO
applications. The Agencies recognize
that not all such ACOs are likely to
benefit consumers, and under certain
conditions ACOs could reduce
competition and harm consumers
through higher prices or lower quality of
care. Thus, the antitrust analysis of ACO
applicants to the Shared Savings
Program must ensure that ACOs have an
opportunity to achieve substantial
efficiencies, yet the analysis must
remain sufficiently rigorous to protect
both Medicare beneficiaries and
commercially insured patients from
potential anticompetitive harm.
To achieve these goals, the Agencies
have developed this Statement of
Antitrust Enforcement Policy Regarding
Accountable Care Organizations
Participating in the Medicare Shared
Savings Program (the ‘‘Policy
Statement’’). The Policy Statement is
intended to ensure that health care
providers have the antitrust clarity and
guidance needed to form procompetitive
ACOs that participate in both the
Medicare and commercial markets. The
Policy Statement describes (l) The ACOs
to which the Policy Statement will
apply; 8 (2) when the Agencies will
apply rule of reason treatment to those
ACOs; (3) an antitrust safety zone; (4)
the Agency review of ACOs exceeding a
50 percent share threshold mandated by
CMS under the Shared Savings Program;
and (5) options for ACOs to obtain
additional antitrust certainty if they are
outside the safety zone and below the
mandatory review threshold.9
II. Applicability of the Policy Statement
This Policy Statement applies to
collaborations among otherwise
independent providers and provider
7 ‘‘Newly formed competitor collaborations’’ are
those formed in whole or in part after March 23,
2010, the date on which the Patient Protection and
Affordable Care Act was enacted. Patient Protection
and Affordable Care Act, Public Law 111–48 (2010).
8 The analytical principles underlying this Policy
Statement would also apply to various ACO
initiatives undertaken by the Innovation Center
within CMS so long as those ACOs are substantially
clinically or financially integrated.
9 This Policy Statement provides guidance to
allow ACOs to determine whether they are likely
to present competitive concerns. It does not reflect
the full analysis that the Agencies may use in
evaluating ACOs or any other transaction or course
of conduct.
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21895
groups,10 formed after March 23, 2010,
that seek to participate, or have
otherwise been approved to participate,
in the Shared Savings Program. For ease
of reference, we refer to such
collaborations as ACOs, although they
may not yet have been approved to
participate as ACOs in the Shared
Savings Program. We refer to the
otherwise independent providers and
provider groups that constitute the ACO
as ACO participants. This Policy
Statement, including its provisions for
streamlined analysis, does not apply to
mergers. Merger transactions, including
transactions that meet the criteria set
forth in Section 1.3 of the Competitor
Collaboration Guidelines,11 will be
evaluated under the Agencies’
Horizontal Merger Guidelines.12
III. The Agencies Will Apply Rule of
Reason Analysis to ACOs That Meet
Certain Conditions
The antitrust laws treat naked pricefixing and market-allocation agreements
among competitors as per se illegal.
Joint price agreements among competing
health care providers are evaluated
under the rule of reason, however, if the
providers are financially or clinically
integrated and the agreement is
reasonably necessary to accomplish the
procompetitive benefits of the
integration.
A rule of reason analysis evaluates
whether the collaboration is likely to
have substantial anticompetitive effects
and, if so, whether the collaboration’s
potential procompetitive efficiencies are
likely to outweigh those effects. The
greater the likely anticompetitive
effects, the greater the likely efficiencies
must be to pass muster under the
antitrust laws. The Agencies have
articulated the standards for both
financial and clinical integration in
various policy statements, speeches,
business reviews, and advisory
opinions. For example, the Agencies’
Statements of Antitrust Enforcement
Policy in Health Care (the ‘‘Health Care
Statements’’) explain that where
participants in physician or
multiprovider joint ventures have
10 A ‘‘collaboration’’ comprises a set of
agreements, other than merger agreements, among
otherwise independent entities jointly to engage in
economic activity, and the resulting economic
activity. U.S. Dep’t of Justice & Fed. Trade Comm’n,
Antitrust Guidelines for Collaborations Among
Competitors § 1.1 (2000), available at https://
www.ftc.gov/os/2000/04/ftcdojguidelines.pdf.
11 U.S. Dep’t of Justice & Fed. Trade Comm’n,
Antitrust Guidelines for Collaborations Among
Competitors § 1.3 (2000), available at https://
www.ftc.gov/os/2000/04/ftcdojguidelines.pdf.
12 U.S. Dep’t of Justice & Fed. Trade Comm’n,
Horizontal Merger Guidelines (rev. ed. 2010),
available at https://www.justice.gov/atr/public/
guidelines/hmg-2010.pdf.
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agreed to share substantial financial risk
as defined in the Health Care
Statements, their risk-sharing
arrangement generally establishes both
an overall efficiency goal for the venture
and the incentives for the participants to
meet that goal. Accordingly, the setting
of price is integral to the venture’s use
of such an arrangement and therefore
warrants evaluation under the rule of
reason.13 The Health Care Statements
provide examples of financial risksharing arrangements that satisfy this
standard, but also recognize that other
acceptable financial risk-sharing
arrangements might develop.14
The Health Care Statements further
explain that provider joint ventures also
may involve clinical integration
sufficient to ensure that the venture is
likely to produce significant
efficiencies.15 Clinical integration can
be evidenced by the joint venture
implementing an active and ongoing
program to evaluate and modify practice
patterns by the venture’s provider
participants and to create a high degree
of interdependence and cooperation
among the providers to control costs
and ensure quality.16 Federal Trade
Commission staff advisory opinions
discuss evidence sufficient to
demonstrate clinical integration in
specific factual circumstances.17
The Affordable Care Act provides that
CMS may approve ACOs that meet
certain eligibility criteria, including (1)
A formal legal structure that allows the
ACO to receive and distribute payments
for shared savings; (2) a leadership and
management structure that includes
clinical and administrative processes;
(3) processes to promote evidence-based
medicine and patient engagement; (4)
reporting on quality and cost measures;
and (5) coordinated care for
beneficiaries.18 CMS has further defined
these eligibility criteria through
proposed regulations.19
13 Dep’t of Justice & Fed. Trade Comm’n,
Statements of Antitrust Enforcement Policy in
Health Care (1996) [hereinafter Health Care
Statements], available at https://www.ftc.gov/
reports/hlth3s.pdf.
14 Id.
15 Id. at 83–87, 110–11.
16 See, e.g., Christine A. Varney, Assistant
Attorney Gen., Antitrust Div., U.S. Dep’t of Justice,
Antitrust and Healthcare at 12 (May 24, 2010),
available at https://www.justice.gov/atr/public/
speeches/258898.pdf.
17 See Fed. Trade Comm’n, Advisory Opinions
(1982–2010), available at https://www.ftc.gov/bc/
healthcare/industryguide/advisory.htm#2010.
18 Patient Protection and Affordable Care Act,
Public Law 111–48, section 3022 (2010).
19 CMS Notice of Proposed Rulemaking, Medicare
Program; Medicare Shared Savings Program:
Accountable Care Organizations (2011) [hereinafter
CMS NPRM on ACOs].
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By contrast, the Agencies have not
previously listed specific criteria
required to establish clinical integration,
but instead have responded to detailed
proposals from health care providers
who have decided how they wish to
integrate their health care delivery
systems to improve quality and lower
costs.20 The Agencies have wished to
avoid dictating prescriptions for how
clinical integration should take place.
Nonetheless, the Agencies recognize
that health care providers seeking to
create ACOs in the context of the Shared
Savings Program could benefit from
greater certainty in evaluating whether
an ACO that satisfies the CMS eligibility
criteria could be subject to an antitrust
investigation and potential challenge as
per se illegal.
The Agencies have determined that
CMS’s proposed eligibility criteria are
broadly consistent with the indicia of
clinical integration that the Agencies
previously set forth in the Health Care
Statements and identified in the context
of specific proposals for clinical
integration from health care providers.21
The Agencies also have determined that
organizations meeting the CMS criteria
for approval as an ACO are reasonably
likely to be bona fide arrangements
intended to improve the quality, and
reduce the costs, of providing medical
and other health care services through
their participants’ joint efforts. Further,
if a CMS-approved ACO provides the
same or essentially the same services in
the commercial market, the Agencies
have determined that the integration
criteria are sufficiently rigorous that
joint negotiations with private-sector
payers will be treated as subordinate
and reasonably related to the ACO’s
primary purpose of improving health
care services.
Further, CMS will collect and
evaluate cost, utilization, and quality
metrics annually relating to each ACO’s
performance in the Shared Savings
Program over the three-year agreement
period. This extensive monitoring of
cost, utilization, and quality metrics
will help the Agencies determine the
extent to which the proposed CMS
eligibility criteria in fact lead to cost
savings and improved health care
quality and may help inform the
20 See generally FTC Staff Advisory Opinions
(2002–Present), available at https://www.ftc.gov/bc/
healthcare/industryguide/opinionguidance.htm.
21 See, e.g., Tristate Health Partners, Inc. Advisory
Opinion from FTC Staff (April 13, 2009) (evaluating
Tristate Health Partners’ proposal and stating that,
if implemented as proposed, Federal Trade
Commission staff would not recommend that the
Commission challenge the proposed program),
available at https://www.ftc.gov/os/closings/staff/
090413tristateaoletter.pdf.
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Agencies’ future analysis of ACOs and
other provider organizations.
Therefore, the Agencies will provide
rule of reason treatment to an ACO if,
in the commercial market, the ACO uses
the same governance and leadership
structure and the same clinical and
administrative processes as it uses to
qualify for and participate in the Shared
Savings Program. This rule of reason
treatment will apply to the ACO for the
duration of its participation in the
Shared Savings Program. The Agencies
further note that CMS’s proposed
regulations allow an ACO to propose
alternative ways to establish clinical
integration, and the Agencies are willing
to consider other proposals for clinical
integration as well.
IV. The Agencies’ Antitrust Analysis of
ACOs That Meet CMS Eligibility
Criteria
As an initial step in determining
whether an ACO is likely to raise
competitive concerns, the Agencies will
use a streamlined analysis that evaluates
the ACO’s share of services in each ACO
participant’s Primary Service Area
(‘‘PSA’’).22 The higher the PSA share, the
greater the risk the ACO will be
anticompetitive. An ACO with high PSA
shares may reduce quality, innovation,
and choice for Medicare and
commercial patients, in part by reducing
the ability of competing equally or more
efficient ACOs to form. High PSA shares
also may allow the ACO to raise prices
to commercial health plans above
competitive levels. On the other hand,
if there are already other competing
ACOs, or sufficient suitable unaffiliated
physicians and hospitals to form
competing ACOs, it is less likely that
the ACO would raise significant
competitive concerns.
The following Sections describe how
the Agencies will treat ACO applicants
that meet CMS eligibility criteria for the
Shared Savings Program, based on
different ranges of PSA shares.23
Depending on an ACO’s range of PSA
shares, CMS may mandate, or an ACO
may choose to seek, an expedited
antitrust review. An ACO will submit its
request for expedited review to both
Agencies, and the Agencies will then
determine which Agency will be the
reviewing Agency and will notify the
applicant of such.24 The Agencies shall
22 While a PSA does not necessarily constitute a
relevant antitrust geographic market, it nonetheless
provides a useful tool for evaluating potential
competitive effects.
23 We expect ACOs to maintain, for the duration
of the agreement period with CMS, the data on
which they relied to calculate their PSA shares.
24 The provisions regarding non-disclosure of
competitively sensitive or business confidential
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establish a Federal Trade Commission/
Department of Justice ACO Working
Group to collaborate and discuss issues
arising out of the ACO reviews. This
process will allow ACOs to rely on the
expertise of both Agencies and ensure
efficient, cooperative, and expeditious
reviews.25
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A. The Antitrust Safety Zone for ACOs
in the Shared Savings Program
This Section sets forth an antitrust
safety zone for ACOs that meet the CMS
eligibility criteria to participate in the
Shared Savings Program and are highly
unlikely to raise significant competitive
concerns. The Agencies will not
challenge ACOs that fall within the
safety zone, absent extraordinary
circumstances. ACOs in the safety zone,
therefore, have no obligation to contact
the Agencies.
The Agencies emphasize that ACOs
outside the safety zone are not
presumptively unlawful. Indeed, ACOs
outside the safety zone frequently may
be procompetitive and lawful. Rather,
the creation of a safety zone simply
reflects a view that ACOs that fall
within it are highly unlikely to raise
significant competitive concerns, so no
initial competitive review is necessary.
For an ACO to fall within the safety
zone, independent ACO participants
(e.g., physician group practices) that
provide the same service (a ‘‘common
service’’) must have a combined share of
30 percent or less of each common
service in each participant’s PSA,
wherever two or more ACO participants
provide that service to patients from
that PSA.26 The PSA for each service is
defined as ‘‘the lowest number of
contiguous postal zip codes from which
the [ACO participant] draws at least 75
percent of its [patients]’’ for that
service.27
information set forth in 28 CFR 50.6 (2010) (U.S.
Department of Justice business review letters) and
16 CFR 1.1–1.4 (2010) (Federal Trade Commission
advisory opinions) would generally apply to the
expedited review process.
25 For example, it has been standard practice for
the Agencies to share with each other their
proposed health care business review and staff
advisory opinion letters before issuing them in final
form to ensure application of consistent standards
of antitrust review.
26 For example, if two physician group practices
form an ACO and each includes cardiologists and
oncologists, cardiology and oncology would be
common services. If, on the other hand, one
physician group practice consists only of
cardiologists and the other only of oncologists, then
there are no common services and the ACO falls
within the safety zone regardless of its share,
subject to the dominant provider limitation,
described below.
27 Medicare Program: Physicians’ Referrals to
Health Care Entities With Which They Have
Financial Relationships (Phase II), 69 FR 16094
(Mar. 26, 2004).
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Any hospital or ambulatory surgery
center (‘‘ASC’’) participating in an ACO
must be non-exclusive to the ACO to fall
within the safety zone, regardless of its
PSA share. In a non-exclusive ACO, a
hospital or ASC is allowed to contract
individually or affiliate with other
ACOs or commercial payers.28 The
safety zone for physician and other
provider services (regardless of whether
the physicians or other providers are
hospital employees) does not differ
based on whether the physicians or
other providers are exclusive or nonexclusive to the ACO, unless they fall
within the rural exception or dominant
provider limitation described below.
The Appendix to this Policy
Statement describes how, and identifies
the data sources available, to calculate
an ACO’s shares of services (i.e.,
physician specialties, major diagnostic
categories (‘‘MDCs’’) for inpatient
facilities, and outpatient categories for
outpatient facilities) 29 in the relevant
PSAs and provides examples.
Rural Exception: An ACO may
include one physician per specialty
from each rural county (as defined by
the U.S. Census Bureau) on a nonexclusive basis and qualify for the safety
zone, even if the inclusion of these
physicians causes the ACO’s share of
any common service to exceed 30
percent in any ACO participant’s PSA
for that service.30 Likewise, an ACO
may include Rural Hospitals 31 on a
non-exclusive basis and qualify for the
safety zone, even if the inclusion of a
Rural Hospital causes the ACO’s share
of any common service to exceed 30
percent in any ACO participant’s PSA
for that service.
Dominant Provider Limitation: This
limitation applies to any ACO that
28 The ACO must be non-exclusive in fact and not
just in name. The Health Care Statements explain
the indicia of non-exclusivity that the Agencies
consider relevant to this evaluation. Health Care
Statements, supra note 9, at 66–67.
29 While these services do not necessarily
constitute relevant antitrust product markets, they
nonetheless provide a useful tool for evaluating
potential competitive effects.
30 The definition and list of rural counties are
available at https://www.census.gov/geo/www/ua/
2010urbanruralclass.html.
31 For the purposes of this Policy Statement, a
Rural Hospital is defined as a Sole Community
Hospital or a Critical Access Hospital. A Sole
Community Hospital is a hospital that is paid under
the Medicare hospital inpatient prospective
payment system and is either located more than 35
miles from other like hospitals or is located in a
rural area, and meets the criteria for Sole
Community Hospital status as specified at 42 CFR
412.92. See also https://www.cms.gov/
MLNProducts/downloads/
SoleCommHospfctsht508–09.pdf. A Critical Access
Hospital is a rural community hospital that has
been certified as a Medicare Critical Access
Hospital, based on the criteria described in 42 CFR
part 485 subpart F.
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includes a participant with a greater
than 50 percent share in its PSA of any
service that no other ACO participant
provides to patients in that PSA. Under
these conditions, the ACO participant (a
‘‘dominant provider’’) must be nonexclusive to the ACO to fall within the
safety zone.32 In addition, to fall within
the safety zone, an ACO with a
dominant provider cannot require a
commercial payer to contract
exclusively with the ACO or otherwise
restrict a commercial payer’s ability to
contract or deal with other ACOs or
provider networks.
The safety zone will remain in effect
for the duration of an ACO’s agreement
with CMS, unless there is a significant
change to the ACO’s provider
composition. An ACO that is not within
the rural exception and later exceeds the
30 percent share limitation solely
because it attracts more patients will not
lose its safety zone status.
B. Mandatory Antitrust Agency Review
of ACOs Exceeding the 50 Percent PSA
Share Threshold
As described in the CMS regulations,
an ACO that does not qualify for the
rural exception cannot participate in the
Shared Savings Program if its share
exceeds 50 percent for any common
service that two or more independent
ACO participants provide to patients in
the same PSA, unless, as part of the
CMS application process, the ACO
provides CMS with a letter from one of
the Agencies stating that the reviewing
Agency has no present intention to
challenge or recommend challenging the
ACO under the antitrust laws.33 This 50
percent share threshold for mandatory
review provides a valuable indication of
the potential for competitive harm from
ACOs with high PSA shares. When
conducting a review, however, the
Agencies will consider any information
or alternative data suggesting that the
PSA shares may not reflect the ACO’s
likely market power, and also will
consider any substantial procompetitive
justification for why the ACO needs that
proposed share to provide high-quality,
32 For example, a physician group participating in
the ACO may comprise a specialty not found in any
other ACO participant. In this case, the ACO may
be eligible for the safety zone even if the physician
group’s share exceeds 50 percent, but only if the
physician group participates in the ACO on a nonexclusive basis and the ACO does not restrict a
commercial payer’s ability to contract or deal with
other ACOs or provider groups.
33 CMS NPRM on ACOs. When the Federal Trade
Commission is the reviewing Agency, Commission
staff will perform the ACO review pursuant to the
Commission’s authorization of its staff in 16 CFR
1.1(b). When the Antitrust Division is the reviewing
Agency, the Assistant Attorney General in charge of
the Antitrust Division or her delegate will sign the
letter. 28 CFR 50.6.
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cost-effective care to Medicare
beneficiaries and patients in the
commercial market.
The Agencies are committed to
providing an expedited review of ACOs
that exceed the 50 percent PSA share
threshold. To obtain this expedited
review, however, the ACO must submit
the following documents and
information to the reviewing Agency:34
1. The application and all supporting
documents that the ACO plans to
submit, or has submitted, to CMS or that
CMS requires the ACO to retain as part
of the Shared Savings Program
application process
2. Documents or agreements relating
to the ability of the ACO participants to
compete with the ACO, either
individually or through other ACOs or
entities, or to any financial or other
incentives to encourage ACO
participants to contract with CMS or
commercial payers through the
proposed ACO
3. Documents discussing the ACO’s
business strategies or plans to compete
in the Medicare and commercial
markets and the ACO’s likely impact on
the prices, cost, or quality of any service
provided by the ACO to Medicare
beneficiaries, commercial health plans,
or other payers
4. Documents showing the formation
of any ACO or ACO participant that was
formed in whole or in part, or otherwise
affiliated with the ACO, after March 23,
2010
5. Information sufficient to show the
following:
a. The ACO’s PSA share calculations
for each common service, as described
in the Appendix, and the ACO’s PSA
share calculations for each common
service provided to commercial
customers where those shares differ
significantly from the PSA share
calculations based on Medicare data
(e.g., PSA share calculations for
pediatricians or obstetricians)
b. Restrictions that prevent ACO
participants from obtaining information
regarding prices that other ACO
participants charge commercial payers
that do not contract through the ACO
c. The identity, including points of
contact, of the five largest commercial
health plans or other payers, actual or
projected, for the ACO’s services
d. The identity of any other existing
or proposed ACO known to operate, or
34 The ACO must represent in writing that it has
undertaken a good-faith search for the documents
and information specified in this Policy Statement
and, where applicable, provided all responsive
material. Moreover, the Agencies may request
additional documents and information where
necessary to evaluate the ACO.
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known to plan to operate, in any PSA
in which the ACO will provide services
All of the above documents and
information must be received by the
reviewing Agency at least 90 days before
the last day on which CMS has stated
that it will accept ACO applications to
participate in the Shared Savings
Program for the relevant calendar
year.35
Within 90 days of receiving all of the
above documents and information, the
reviewing Agency will advise the ACO
that the Agency
1. has no present intent to challenge
or recommend challenging the ACO, as
described in the documents provided
and, if appropriate, conditioned on the
ACO’s written agreement to take
specific steps to remedy concerns raised
by the Agency; or
2. is likely to challenge or recommend
challenging the ACO if it proceeds.
Pursuant to CMS regulations, CMS will
not approve for the Shared Savings
Program an ACO that has received a
letter stating that the reviewing Agency
is likely to challenge or recommend
challenging the ACO if it proceeds.36
ACOs that exceed the 50 percent
threshold can reduce the likelihood of
antitrust concern by avoiding the
conduct set forth in Section IV.C (1)
through (5) below.
C. ACOs Below the 50 Percent
Mandatory Review Threshold and
Outside the Safety Zone
ACOs that are outside the safety zone
and below the 50 percent mandatory
review threshold frequently may be
procompetitive. The key issue is
whether the ACO, on balance, will
provide consumers with high-quality,
cost-effective health care or, instead,
increase price and reduce consumer
choice and value. An ACO in this
category that does not impede the
functioning of a competitive market and
that engages in procompetitive activities
will not raise competitive concerns and
may proceed without Agency scrutiny.
As is current practice, however, if it
appears that an ACO’s formation or
conduct may be anticompetitive, one of
35 For example, if CMS sets November 1, 2011, as
the last date for accepting applications to begin
participation in the Shared Savings Program on
January 1, 2012, then the Agency must receive all
of the above documents and information on or
before August 3, 2011.
36 Moreover, if at any time during the ACO’s
agreement period with CMS there is a significant
change to the ACO’s provider composition such
that the ACO exceeds the 50 percent threshold or
is materially different than what was initially
reviewed, the ACO must seek antitrust review as set
forth above. However, an ACO that exceeds the 50
percent threshold solely because it attracts more
patients will not be required to seek antitrust
review. CMS NPRM on ACOs.
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the Agencies may investigate the ACO
and, if appropriate, take enforcement
action at any time during the ACO’s
participation in the Shared Savings
Program.
To provide additional antitrust
guidance for ACOs that fall below the
mandatory review threshold and outside
the safety zone, the Agencies identify
five types of conduct that an ACO can
avoid to reduce significantly the
likelihood of an antitrust investigation.
Specifically, the Agencies believe that
an ACO in this category is highly
unlikely to present competitive
concerns if the ACO avoids the conduct
set forth in (1) through (5) below.
Avoiding the first four types of conduct
is important to facilitate payers’ ability
to offer insurance products that
differentiate among providers based on
cost and quality. Avoiding the final type
of conduct ensures that the ACO does
not facilitate collusion involving ACO
participants that contract with payers
outside the ACO.
1. Preventing or discouraging
commercial payers from directing or
incentivizing patients to choose certain
providers, including providers that do
not participate in the ACO, through
‘‘anti-steering,’’ ‘‘guaranteed inclusion,’’
‘‘product participation,’’ ‘‘price parity,’’
or similar contractual clauses or
provisions
2. Tying sales (either explicitly or
implicitly through pricing policies) of
the ACO’s services to the commercial
payer’s purchase of other services from
providers outside the ACO (and vice
versa), including providers affiliated
with an ACO participant (e.g., an ACO
may not require a purchaser to contract
with all the hospitals in the same
network as the hospital that belongs to
the ACO)
3. With an exception for primary care
physicians, contracting with other ACO
physician specialists, hospitals, ASCs,
or other providers on an exclusive basis,
thus preventing or discouraging them
from contracting outside the ACO,
either individually or through other
ACOs or provider networks
4. Restricting a commercial payer’s
ability to make available to its health
plan enrollees cost, quality, efficiency,
and performance information to aid
enrollees in evaluating and selecting
providers in the health plan, if that
information is similar to the cost,
quality, efficiency, and performance
measures used in the Shared Savings
Program
5. Sharing among the ACO’s provider
participants competitively sensitive
pricing or other data that they could use
to set prices or other terms for services
they provide outside the ACO
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An ACO that desires further certainty
regarding the application of the antitrust
laws to its formation and planned
operation can seek an expedited review
from one of the Agencies, similar to the
mandatory review for ACOs above the
50 percent threshold described in
Section IV.B above. The reviewing
Agency will complete the review within
90 days of receiving all of the necessary
documents and information (as
described in the mandatory review
above and according to the same
deadlines) and will inform the ACO of
the outcome of the review. The
reviewing Agency will advise the ACO
of the Agency’s intention according to
the options described in Section IV.B
above. Pursuant to CMS regulations,
CMS will not approve for the Shared
Savings Program an ACO that has
received a letter stating that the
reviewing Agency is likely to challenge
or recommend challenging the ACO if it
proceeds.37
Appendix
This Appendix explains how to
calculate the PSA shares of common
services discussed in this Policy
Statement.38 There are three steps:
1. Identify each service provided by at
least two independent ACO participants
(i.e., each common service). A service is
defined as follows:
a. For physicians, a service is the
physician’s primary specialty, as
designated on the physician’s Medicare
Enrollment Application. Each specialty
is identified by its Medicare Specialty
Code (‘‘MSC’’), as defined by CMS.39
b. For inpatient facilities (e.g.,
hospitals), a service is an MDC.40
c. For outpatient facilities (e.g., ASCs
or hospitals), a service is an outpatient
category, as defined by CMS.41
2. Identify the PSA for each common
service for each participant (e.g.,
physician group, inpatient facility, or
outpatient facility) in the ACO. For each
common service and each participant,
the PSA is defined as the lowest number
of contiguous postal zip codes from
37 CMS
NPRM on ACOs.
ACO participant that wants to determine
whether it meets the dominant provider limitation
of the safety zone should calculate its PSA share in
a similar manner.
39 CMS will make publicly available the most
current list of applicable specialties. Specialty
Codes 01 (general practice), 08 (family practice), 11
(internal medicine), and 38 (geriatric medicine) are
considered ‘‘Primary Care’’ specialties, and are
treated as a single service for the purposes of this
Policy Statement.
40 CMS will make publicly available the most
current list of MDCs.
41 CMS will make publicly available a list of
applicable outpatient categories as well as data
necessary to assign procedure codes to the
appropriate category.
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which the participant draws at least 75
percent of its patients for that service.42
3. Calculate the ACO’s PSA share for
each common service in each PSA from
which at least two ACO participants
serve patients for that service. For
physician services, the ACO applicant
should calculate its shares of Medicare
fee-for-service allowed charges (i.e., the
amount that a provider is entitled to
receive for the service provided) during
the most recent calendar year for which
data are available. For outpatient
services, the ACO applicant should
calculate its shares of Medicare fee-forservice payments during the most recent
calendar year for which data are
available. CMS will make public the
data necessary to identify the full range
of services and the aggregate fee-forservice allowed charges or payments for
each service, by zip code. For inpatient
services, the ACO applicant should
calculate its shares of inpatient
discharges, using state-level all-payer
hospital discharge data where available,
for the most recent calendar year for
which data are available. For ACOs
located in a state where all-payer
hospital discharge data are not
available, the ACO applicant should
calculate its shares of Medicare fee-forservice payments during the most recent
federal fiscal year for which data are
available (CMS will make public the
necessary data). For those services that
are rarely used by Medicare
beneficiaries (e.g., pediatrics, obstetrics,
and neonatal care), the ACO may use
other available data to determine the
relevant shares. For example, for
services where Medicare data are not
applicable, data on the number of
actively participating physicians within
the specialty and within the PSA may
be a reasonable alternative for the
purposes of calculating shares of
physician services.
Example of How To Calculate an ACO’s
PSA Shares
The following example illustrates
how to calculate the ACO’s relevant
PSA shares. Assume that two
independent physician practices, two
independent hospitals, and an ASC
propose to form an ACO. For purposes
of this example, further assume that the
hospitals do not directly employ
physicians. If they do, then services
provided by the hospitals’ employed
physicians would need to be taken into
account in calculating the ACO’s shares
for each common service.
42 This PSA calculation is based on the Stark II
regulations. Medicare Program: Physicians’
Referrals to Health Care Entities With Which They
Have Financial Relationships (Phase II), 69 FR
16094 (Mar. 26, 2004).
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For the physician groups:
1. Identify the Physician Groups’
common MSCs. In this example,
Physician Group A (‘‘PG A’’) has
physicians with general surgery (MSC
02) and orthopedic surgery specialties
(MSC 20). Physician Group B (‘‘PG B’’)
has physicians with orthopedic surgery
(MSC 20) and cardiology (MSC 06)
specialties. The common service is
orthopedic surgery, not general surgery
or cardiology, because PG A does not
have cardiologists and PG B does not
have general surgeons.
2. Identify the PSAs by zip code for
orthopedic surgery for each Physician
Group. In this example, there will be
two PSAs: One for PG A’s orthopedic
surgery practice (‘‘PSA A’’) and one for
PG B’s orthopedic surgery practice
(‘‘PSA B’’).
3. Determine the ACO’s share in each
of the relevant PSAs. In this example,
both PG A’s and PG B’s orthopedic
surgeons serve patients located in both
PSAs. Thus, shares need to be
calculated in PSA A and PSA B. The
ACO’s share of orthopedic surgery in
PSA A would be the total Medicare
allowed charges for claims billed by the
ACO’s orthopedic surgeons (which are
PG A’s and PG B’s total allowed charges
for claims billed by orthopedic surgeons
for Medicare beneficiaries in PSA A’s
zip codes) divided by the total allowed
charges for orthopedic surgery for all
Medicare beneficiaries in PSA A.
Likewise, the ACO’s share of orthopedic
surgery services in PSA B would be the
total Medicare allowed charges for
claims billed by the ACO’s orthopedic
surgeons (which are PG A’s and PG B’s
total allowed charges for claims billed
by orthopedic surgeons for Medicare
beneficiaries in PSA B’s zip codes)
divided by the total allowed charges for
orthopedic surgery for all Medicare
beneficiaries in PSA B.
For the inpatient services:
1. Identify the hospitals’ common
MDCs. In this example, Hospital 1 and
Hospital 2 each provide services in 10
MDCs, but only two are common
services: Cardiac care (i.e., services
related to diseases and disorders of the
circulatory system—MDC 05) and
orthopedic care (i.e., services related to
diseases and disorders of the
musculoskeletal system and connective
tissue—MDC 08).
2. Identify the PSAs by zip codes for
cardiac care and orthopedic care for
each hospital. In this example, there
will be four PSAs: Hospital 1 PSA for
cardiac care, Hospital 1 PSA for
orthopedic care, Hospital 2 PSA for
cardiac care, and Hospital 2 PSA for
orthopedic care.
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3. Determine the ACO’s share in each
of the relevant PSAs. In this example,
Hospital l and Hospital 2 both serve
cardiac patients located in each
hospital’s PSA for cardiac care, and both
serve orthopedic patients in each
hospital’s PSA for orthopedic care.
Thus, shares need to be calculated in all
four PSAs. The ACO’s share of cardiac
care in Hospital 1’s PSA would be the
ACO’s total number of inpatient
discharges for MDC 05 (which are
Hospital 1’s and Hospital 2’s total
inpatient discharges for cardiac care in
Hospital l’s PSA) divided by the total
number of inpatient discharges for MDC
05 for all residents of this PSA. Use the
same process for the other three PSAs.
For the outpatient services:
1. Identify the hospitals’ and ASC’s
common outpatient categories. In this
example, Hospital 1 does not provide
outpatient services, while Hospital 2
and the ASC each provide services in 10
outpatient categories, but only two are
common services: cardiovascular tests/
procedures (outpatient category 2) and
musculoskeletal procedures (outpatient
category 5).
2. Identify the PSAs by zip codes for
cardiovascular tests/procedures and
musculoskeletal procedures for each
facility. In this example, there will be
four PSAs: Hospital 2 PSA for
cardiovascular tests/procedures,
Hospital 2 PSA for musculoskeletal
procedures, ASC PSA for cardiovascular
tests/procedures, and ASC PSA for
musculoskeletal procedures.
3. Determine the ACO’s share in each
of the relevant PSAs. In this example,
Hospital 2 and ASC both provide
cardiovascular tests/procedures to
patients located in each facility’s PSA
for cardiovascular tests/procedures, and
both provide musculoskeletal
procedures to patients located in each
facility’s PSA for musculoskeletal
procedures. Thus, shares need to be
calculated in all four PSAs. The ACO’s
share of cardiovascular tests/procedures
in Hospital 2’s PSA would be the ACO’s
total Medicare fee-for-service payments
for outpatient category 2 (which are
Hospital 2’s and the ASC’s total
payments for outpatient cardiovascular
tests/procedures for Medicare
beneficiaries in Hospital 2’s PSA)
divided by the total payments for
outpatient category 2 for all Medicare
beneficiaries in this PSA. Use the same
process for the other three PSAs.
Application to the Safety Zone: In this
example, the ACO would calculate ten
PSA shares. If all of the shares are 30
percent or below and the hospital
inpatient and outpatient services are
non-exclusive to the ACO, then the ACO
would fall within the safety zone. In
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other words, the 30 percent threshold
must be met in each relevant PSA for
each common service. If that condition
is not met, then the ACO does not fall
within the safety zone.
Application to the Mandatory Review
Threshold: If only one of the ten PSA
shares in this example exceeds 50
percent, the ACO would be required to
obtain an antitrust review from one of
the Agencies before participating in the
Shared Savings Program. In other
words, mandatory review is necessary
even if the share for only one common
service exceeds 50 percent in any PSA
in which another ACO participant
provides that service.
V. Request for Comments
The Agencies seek public comment
from health care providers, payers,
consumers, antitrust practitioners, and
other stakeholders on the following:
1. Whether and, if so, why the
guidance in the proposed Policy
Statement should be changed in any
respect;
2. Whether other sources of data exist
that ACO applicants could use to
determine relevant PSA shares (as
identified in Step 3 of the Appendix)
for:
(a) Physician services rarely used by
Medicare beneficiaries (e.g., pediatrics,
obstetrics, and neonatal care); and
(b) Inpatient hospital services located
in states where all-payer hospital
discharge data are not available.
3. Whether providing the documents
and information required to obtain an
expedited antitrust review will present
an undue burden on ACO applicants—
specifically, the Agencies seek comment
on:
(a) The necessity of and practical
utility for the proposed collection of
information;
(b) The accuracy of the estimated time
and cost to prepare responses to the
requested collection of information;
(c) Ways to enhance the quality,
utility, and clarity of the information to
be collected; and
(d) Ways to minimize the burden of
collecting the information on those who
are to respond.
Interested parties are invited to
submit written comments electronically
or in paper form. Comments should
state ‘‘Proposed Statement of Antitrust
Enforcement Policy Regarding ACOs
Participating in the Medicare Shared
Savings Program, Matter V100017’’ both
in the text and on the envelope. Please
note that your comment, including your
name and your state, will be placed on
the public record of this proceeding,
including on the publicly accessible
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FTC Web site, at https://www.ftc.gov/os/
comments/aco-comments/index.shtm.
Because comments will be made
public, they should not include any
sensitive personal information, such as
an individual’s Social Security number;
date of birth; driver’s license number or
other state identification number, or
foreign country equivalent; passport
number; financial account number; or
credit or debit card number. Comments
also should not include any sensitive
health information, such as medical
records or other individually
identifiable health information. In
addition, comments should not include
any ‘‘[t]rade secret or any commercial or
financial information which is obtained
from any person and which is privileged
or confidential,’’ as provided in Section
6(f) of the FTC Act, 15 U.S.C. 46(f), and
Commission Rule 4.10(a)(2), 16 CFR
4.10(a)(2). Comments containing
material for which confidential
treatment is requested must be filed in
paper form and clearly labeled
‘‘Confidential.’’
Because mail delivered to the FTC by
the U.S. Postal Service is subject to
delay due to heightened security
screening, please consider submitting
your comments electronically.
Comments filed electronically should be
submitted by using the following Web
link: https://
ftcpublic.commentworks.com/ftc/
acoenforcementpolicy (and following
the instructions on the web-based form).
To ensure that the Agencies consider an
electronic comment, you must file it on
the web-based form at the Web link
https://ftcpublic.commentworks.com/
ftc/acoenforcementpolicy. If this Notice
appears at https://www.regulations.gov/
#!home, you may also file an electronic
comment through that Web site. The
Agencies will consider all comments
that regulations.gov forwards to the
Commission. You may also visit the
FTC Web site at https://www.ftc.gov/opp/
aco/ to read the Notice and the news
release describing it.
A comment filed in paper form
should reference the ‘‘Proposed
Statement of Antitrust Enforcement
Policy Regarding ACOs Participating in
the Medicare Shared Savings Program,
Matter V100017’’ both in the text and on
the envelope, and should be mailed or
delivered to the following address:
Federal Trade Commission, Office of the
Secretary, Room H–113 (Annex W), 600
Pennsylvania Avenue, NW.,
Washington, DC 20580. The FTC
requests that any comment filed in
paper form be sent by courier or
overnight service, if possible, because
U.S. postal mail in the Washington area
and at the Commission is subject to
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delay due to heightened security
precautions.
The FTC Act and other laws the
Commission administers permit the
collection of public comments to
consider and use in this proceeding as
appropriate. The Agencies will consider
all timely and responsive public
comments, whether filed in paper or
electronic form. Comments received
will be available to the public on the
FTC Web site, to the extent practicable,
at https://www.ftc.gov/os/comments/acocomments/index.shtm. As a matter of
discretion, the Commission makes every
effort to remove home contact
information for individuals from the
public comments it receives before
placing those comments on the FTC
Web site. More information, including
routine uses permitted by the Privacy
Act, may be found in the FTC’s privacy
policy, at https://www.ftc.gov/ftc/
privacy.shtm.
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Paperwork Reduction Act
The Medicare Shared Savings
Program is exempt from the Paperwork
Reduction Act.43 Nonetheless, the
Agencies are seeking comments relevant
to the utility and burden of the
submission of documents and
information (collectively, ‘‘information’’)
required in connection with requests for
expedited antitrust review as described
above.44 The Agencies are providing
this opportunity for public comment
regarding the utility of the information
to be provided in support of an ACO
request for antitrust review and steps to
minimize the burden of collecting and
submitting that information. Specific
questions regarding these considerations
are included in the Request for
Comment part of the Supplementary
Information section above.
Subject to further refinement by
public comment, calculating the
projected overall burden of collecting
and submitting the required information
necessarily entails estimating the
number of ACOs that will apply for
expedited review, and the average time
necessary per applicant to respond. To
help inform some of these estimates, the
FTC has drawn upon CMS’s notice of
proposed rulemaking regarding the
Medicare Shared Savings Program,
published simultaneously with this
Federal Register notice.45
43 The Patient Protection and Affordable Care Act
provides: ‘‘Chapter 35 of title 44, United States Code
[44 U.S.C. 3501 et seq., the Paperwork Reduction
Act] shall not apply to the [Medicare Shared
Savings] program.’’ Patient Protection and
Affordable Care Act, Public Law 111–48, section
3022 (2010) (codified at 42 U.S.C. 1395jjj(e)).
44 Cf. Paperwork Reduction Act, 44 U.S.C. 3501–
3521.
45 CMS NPRM on ACOs.
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CMS has estimated that some 1.5 to 4
million Medicare beneficiaries will be
aligned with a participating ACO during
the first three years of the Shared
Savings Program.46 Moreover, the
amendments to the Social Security Act
that gave rise to the Program specify
that, at a minimum, the ACO shall have
at least 5,000 such beneficiaries
assigned to it in order to be eligible to
participate in the Shared Savings
Program.47 Thus, by extrapolation, there
may be a range of 300 to 800 ACOs.
Not all of these ACO applicants will
be covered by the Policy Statement,
however, because the Statement applies
only to collaborations among otherwise
independent providers and provider
groups 48 formed after March 23, 2010,
the date of passage of the Patient
Protection and Affordable Care Act; it
does not apply to such collaborations
formed earlier or to ACOs created
through merger.49 Our general
understanding is that a number of longexisting institutions will apply to
become ACOs, but also that a number of
ACO applicants are likely to be newly
formed. Accordingly, we estimate that
roughly one-half of ACO applicants will
be covered, yielding a range of 150 to
400 ACOs likely to be covered by the
Policy Statement.
Not all ACO applicants covered by the
Policy Statement will need to seek
expedited antitrust review, however;
only ACO applicants not qualifying for
the rural exception and having a share
46 Id.,
preamble to proposed rule.
3022 of the Affordable Care Act
amended Title XVIII of the Social Security Act (42
U.S.C. 1395 et seq.) by adding new section 1899 to
establish ‘‘a shared savings program * * * that
promotes accountability for a patient population
and coordinates items and services under
[Medicare] Parts A and B, and encourages
investment in infrastructure and redesigned care
processes for high quality and efficient service
delivery.’’ Patient Protection and Affordable Care
Act, Public Law 111–48, section 3022 (2010)
(codified at 42 U.S.C. 1395jjj(a)(1). Section
1899(b)(2)(D) (codified at 42 U.S.C. 1395jjj(b)(2)(D))
specifies the minimum number of beneficiaries per
eligible program participant.
48 A ‘‘collaboration’’ comprises a set of
agreements, other than merger agreements, among
otherwise independent entities jointly to engage in
economic activity, and the resulting economic
activity. U.S. Dep’t of Justice & Fed. Trade Comm’n,
Antitrust Guidelines for Collaborations Among
Competitors § 1.1 (2000), available at https://
www.ftc.gov/os/2000/04/ftcdojguidelines.pdf.
49 Merger transactions, including transactions that
meet the criteria set forth in Section 1.3 of the
Competitor Collaboration Guidelines, will be
evaluated under the Agencies’ Horizontal Merger
Guidelines. See U.S. Dep’t of Justice & Fed. Trade
Comm’n, Antitrust Guidelines for Collaborations
Among Competitors § 1.3 (2000),
available at https://www.ftc.gov/os/2000/04/
ftcdojguidelines.pdf; U.S. Dep’t of Justice & Fed.
Trade Comm’n, Horizontal Merger Guidelines (rev.
ed. 2010),
available at https://www.justice.gov/atr/public/
guidelines/hmg-2010.pdf.
47 Section
PO 00000
Frm 00048
Fmt 4703
Sfmt 4703
21901
over 50 percent for any common service
provided to patients by two or more
independent ACO participants in the
same PSA must do so. Other ACO
applicants that are not required to
obtain an antitrust review and do not
fall within the Policy Statement’s Safety
Zone nonetheless may obtain a review
if they wish additional antitrust
certainty. For the purposes of this
burden analysis, we estimate that the
number of submissions for expedited
antitrust review, both required and
voluntary, will range from roughly onequarter to one-half of all ACO
applications covered by the Policy
Statement. This yields an estimated
range of 38 to 200 ACO applicants that
will seek antitrust review. Erring
conservatively, the following burden
estimate will use the upper bound
estimate, i.e., 200 submissions.
In developing an estimate of the time
necessary for applying ACOs to collect
and review and submit the information
for antitrust review, we note that the
Policy Statement asks for the
application the ACO has submitted or
plans to submit to CMS, information
that will already have been gathered and
organized. Other required information is
similar in nature to that required when
submitting a pre-merger notification
filing under the Hart-Scott-Rodino Act
(‘‘HSR’’); 50 the basic burden estimate for
HSR premerger notification filings,
OMB Control No. 3084–0005, is 39
hours. Accordingly, we estimate that, in
the aggregate, ACOs and their antitrust
counsel likely will devote
approximately 30 to 50 hours to
retrieving, reviewing, and submitting
the information. This estimate is
conservative, since submitters may
submit information about the relevant
markets in a format of their choosing.
There is no prescribed notification and
report form as there is for a submission
under the HSR Rules.51
Estimated Labor Costs
It is not possible to calculate with
precision the labor costs associated with
providing the required information,
because responses will entail
participation by management and
support staff at various compensation
levels within many different entities.
Individuals within some or all of those
labor categories may be involved in the
information-collection process.
Nonetheless, the FTC has assumed that
executive-level personnel and outside
legal counsel will handle most of the
50 See Section 7A of the Clayton Act, 15 U.S.C.
18a, as amended by the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, Public Law 94–435, 90
Stat. 1390.
51 See 16 CFR 801–803 (2010).
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21902
Federal Register / Vol. 76, No. 75 / Tuesday, April 19, 2011 / Notices
tasks involved in gathering and
producing the responsive information,
and has applied an average hourly wage
of $460/hour for their labor. Thus, the
labor costs per applicant for expedited
review should range from
approximately $13,800 to $23,000.
Estimated Annual Capital or Other
Non-Labor Costs
The capital or other non-labor costs
associated with the information requests
will be minimal. Industry members
should already have in place the means
to store information of the volume
requested. In addition, respondents may
have to purchase office supplies such as
file folders, computer CDs or DVDs,
photocopier toner, or paper in order to
comply with the Commission’s requests.
The FTC estimates that such costs will
be minimal.
For the Antitrust Division of the
Department of Justice.
Sharis A. Pozen,
Chief of Staff and Deputy Assistant Attorney
General.
For the Federal Trade Commission.
By direction of the Commission,
Commissioner Rosch dissenting.
Donald S. Clark,
Secretary.
[FR Doc. 2011–9466 Filed 4–18–11; 8:45 am]
BILLING CODE 6750–01–P
DEPARMENT OF HEALTH AND
HUMAN SERVICES
Privacy Act of 1974; Report of a New
System of Records
Office of Grants and
Acquisition Policy and Accountability
(OGAPA), Assistant Secretary for
Financial Resources (ASFR),
Department of Health and Human
Services (HHS).
ACTION: Notice of New System of
Records (SOR).
mstockstill on DSKH9S0YB1PROD with NOTICES
AGENCY:
Acquisition System (HCAS) is an
initiative to reduce the number of
duplicative acquisition systems, thereby
streamlining and standardizing our
procurement processes and systems
across the Department. The use of
disparate systems complicates all
interfaces to financial, inventory, and
other systems that HHS has or will
employ.
HCAS replaced varying Procurement
Request Information System (PRISM)
configurations that existed across HHS,
and replaced legacy acquisition systems
and manual processes necessary for
capturing HHS acquisition transactions
for integration with the Unified
Financial Management System (UFMS).
We are also proposing routine uses for
this system of records.
DATES: Effective Dates: The HHS ASFR/
OGAPA filed a new system report with
the Chair of the House Committee on
Oversight and Government Reform, the
Chair of the Senate Committee on
Homeland Security and Governmental
Affairs, and the Administrator, Office of
Information and Regulatory Affairs,
Office of Management and Budget
(OMB) on April 8, 2011. To ensure that
all parties have adequate time in which
to comment, the new SOR, including
routine uses, will become effective 40
days from the publication of the notice,
or from the date it was submitted to
OMB and the Congress, whichever is
later, unless HHS/ASFR/OGAPA
receives comments that require
alterations to this notice. Although the
Privacy Act requires only that the HHS/
ASFR/OGAPA provide an opportunity
for interested persons to comment on
the proposed routine uses, the HHS/
ASFR/OGAPA invites comments on all
portions of this notice.
FOR FURTHER INFORMATION OR COMMENTS
CONTACT: The public should address
comments to Kowanna Parran at HHS
Office of the Secretary, Assistant
Secretary for Financial Resources, Office
of Grants and Acquisition Policy and
Accountability, Hubert H. Humphrey
SUMMARY: In accordance with the
requirements of the Privacy Act of 1974, Building, 200 Independence Avenue,
Washington, DC 20201. Ms. Parran can
the HHS OGAPA is proposing to
be reached by telephone at (202) 205–
establish a new system titled, ‘‘HHS
0722 or via e-mail at
Consolidated Acquisition Solution
(HCAS), System No. 09–90–0411.’’ As an kowanna.parran@hhs.gov. Comments
received will be available for review at
IT investment, HCAS is monitored by
this location, by appointment, during
the HHS IT Investment Review Board
regular business hours, Monday through
(ITIRB). In addition to the ITIRB
Friday from 9 a.m.–3 p.m., Eastern Time
oversight, HCAS is monitored by the
zone.
HHS/ASFR Office of Grants and
Acquisition Policy and Accountability
SUPPLEMENTARY INFORMATION: The HCAS
(OGAPA).
system itself collects information
At HHS, there were seven different
necessary to support a procurement
systems in place to support the people
relationship between HHS and the
who make buying—procurement—
vendor community. Information is
possible. The HHS Consolidated
collected on HHS Contracting Officers,
VerDate Mar<15>2010
16:19 Apr 18, 2011
Jkt 223001
PO 00000
Frm 00049
Fmt 4703
Sfmt 4703
and HHS vendors. There are limited
instances where an individual’s
information in identifiable form (IIF)
will be collected in order to facilitate a
transaction in HCAS. HCAS collects and
maintains IIF for service fellows and
sole proprietorships that provide vendor
services as individuals. Acquisition
processes supported by HCAS include
acquisition planning, solicitation,
contract creation and approval, contract
award and award closeout, and contract
performance and management. To
support these business processes, IIF
contained in HCAS may include the
following: vendor and contracting
officer names, vendor mailing
addresses, phone numbers, vendor
financial account information, legal
documents, Web URLs, e-mail
addresses, vendor education records,
and vendor tax ID numbers (TIN) or
Social Security numbers.
The Privacy Act allows information
disclosure without an individual’s
consent if the information is to be used
for a purpose that is compatible with the
purpose(s) for which the information
was collected. Any such compatible use
of data is known as a ‘‘routine use.’’ The
Government will only release HCAS
information that can be associated with
an individual as provided for under
‘‘Section III. Proposed Routine Use
Disclosures of Data in the System.’’ Both
identifiable and non-identifiable data
may be disclosed under a routine use.
We will only collect the minimum
personal data necessary to achieve the
purpose of HCAS. We are proposing to
establish the following routine use
disclosures of information maintained
in the system:
(1) To agency contractors or
consultants who have been engaged by
the agency to assist in the
accomplishment of the HCAS
Operations and Maintenance (O&M)
function relating to the purposes for this
system and who need to have access to
the records in order to assist the OGAPA
and HCAS O&M Federal leadership.
We contemplate disclosing
information under this routine use only
in situations in which OGAPA and
HCAS O&M Federal leadership enters
into a contractual or similar agreement
with a third party to assist in
accomplishing a HCAS function relating
to purposes for this system.
The HHS Program Support Center
(PSC) Financial Enterprise Systems
Management (FESM) Operations and
Maintenance (O&M) must be able to give
a contractor or consultant whatever
information is necessary for the
contractor or consultant to fulfill its
duties. In these situations, safeguards
are provided in the contract prohibiting
E:\FR\FM\19APN1.SGM
19APN1
]]>Agencies
[Federal Register Volume 76, Number 75 (Tuesday, April 19, 2011)]
[Notices]
[Pages 21894-21902]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-9466]
=======================================================================
-----------------------------------------------------------------------
FEDERAL TRADE COMMISSION
Department of Justice
Antitrust Division
Proposed Statement of Antitrust Enforcement Policy Regarding
Accountable Care Organizations Participating in the Medicare Shared
Savings Program
AGENCY: FTC; Antitrust Division, DOJ.
ACTION: Notice with comment period.
-----------------------------------------------------------------------
SUMMARY: The FTC and DOJ (the ``Agencies'') are proposing an
enforcement policy regarding the application of the antitrust laws to
health care collaborations among otherwise independent providers and
provider groups, formed after March 23, 2010, the date on which the
Patient Protection and Affordable Care Act was enacted, that seek to
participate, or have otherwise been approved to participate, as
accountable care organizations (ACOs) under the Medicare Shared Savings
Program, Section 3022 of the Affordable Care Act (Patient Protection
and Affordable Care Act, Public Law 111-48 (2010) and the Health Care
and Education Reconciliation Act of 2010, Public Law 111-52 (2010)).
DATES: Public comments must be received on or before May 31, 2011.
ADDRESSES: Interested parties are invited to submit written comments
electronically or in paper form, by following the instructions in the
Request for Comment part of the SUPPLEMENTARY INFORMATION section
below.
FOR FURTHER INFORMATION CONTACT: Daniel Gilman, (202) 326-3136 (FTC) or
Gail Kursh, (202) 307-5799 (DOJ).
SUPPLEMENTARY INFORMATION:
Proposed Statement of Antitrust Enforcement Policy Regarding
Accountable Care Organizations Participating in the Medicare Shared
Savings Program
I. Introduction
The Patient Protection and Affordable Care Act and the Health Care
and Education Reconciliation Act of 2010 (collectively, the
``Affordable Care Act'') seek to improve the quality and reduce the
costs of health care services in the United States by, among other
things, encouraging physicians, hospitals, and other health care
providers to become accountable for a patient population through
integrated health care delivery systems.\1\ One delivery system reform
is
[[Page 21895]]
the Affordable Care Act's Medicare Shared Savings Program (the ``Shared
Savings Program''), which promotes the formation and operation of
Accountable Care Organizations (``ACOs'' \2\) to serve Medicare fee-
for-service beneficiaries.\3\ Under this provision, ``groups of
providers * * * meeting the criteria specified by the [Department of
Health and Human Services] Secretary may work together to manage and
coordinate care for Medicare * * * beneficiaries through an [ACO].''
\4\ An ACO may share in some portion of any savings it creates if the
ACO meets certain quality performance standards established by the
Secretary of Health and Human Services through the Centers for Medicare
and Medicaid Services (``CMS''). The Affordable Care Act requires an
ACO that wishes to participate in the Shared Savings Program to enter
into an agreement with CMS for not less than three years.\5\
---------------------------------------------------------------------------
\1\ Patient Protection and Affordable Care Act, Public Law 111-
48 (2010); the Health Care and Education Reconciliation Act of 2010,
Public Law 111-52 (2010).
\2\ As used in this document, ``ACO'' refers to Accountable Care
Organizations under the Medicare Shared Savings Program, which also
may operate in commercial markets. Patient Protection and Affordable
Care Act, Public Law 111-48, section 2706 (2010).
\3\ Id.
\4\ Id.
\5\ Id.
---------------------------------------------------------------------------
Recent commentary suggests that health care providers are more
likely to integrate their care delivery for Medicare beneficiaries
through ACOs if they can also use the ACOs for commercially insured
patients.\6\ This preference to operate in both the Medicare and
commercial markets appears to reflect the significant resources and
time required to integrate independent provider practices, a desire to
provide more patients--not just Medicare patients--with the benefits of
integrated health care, and the intent to develop new delivery and
payment systems with commercial purchasers of health care services
(including health insurance plans and other private payers).
---------------------------------------------------------------------------
\6\ Fed. Trade Comm'n & Dep't of Health and Human Serv.,
Workshop Regarding Accountable Care Organizations, and Implications
Regarding Antitrust, Physician Self-Referral, Anti-Kickback, and
Civil Monetary Penalty (CMP) Laws (Oct. 5, 2010).
---------------------------------------------------------------------------
The Federal Trade Commission and the Antitrust Division of the
Department of Justice (the ``Agencies'') recognize that ACOs may
generate opportunities for health care providers to innovate in both
the Medicare and commercial markets and achieve for many consumers the
benefits Congress intended for Medicare beneficiaries through the
Shared Savings Program. Therefore, to maximize and foster opportunities
for ACO innovation, the Agencies wish both to clarify the antitrust
analysis of newly formed collaborations among independent providers
that seek to become ACOs in the Shared Savings Program \7\ and to
coordinate the antitrust analysis with the CMS review of those ACO
applications. The Agencies recognize that not all such ACOs are likely
to benefit consumers, and under certain conditions ACOs could reduce
competition and harm consumers through higher prices or lower quality
of care. Thus, the antitrust analysis of ACO applicants to the Shared
Savings Program must ensure that ACOs have an opportunity to achieve
substantial efficiencies, yet the analysis must remain sufficiently
rigorous to protect both Medicare beneficiaries and commercially
insured patients from potential anticompetitive harm.
---------------------------------------------------------------------------
\7\ ``Newly formed competitor collaborations'' are those formed
in whole or in part after March 23, 2010, the date on which the
Patient Protection and Affordable Care Act was enacted. Patient
Protection and Affordable Care Act, Public Law 111-48 (2010).
---------------------------------------------------------------------------
To achieve these goals, the Agencies have developed this Statement
of Antitrust Enforcement Policy Regarding Accountable Care
Organizations Participating in the Medicare Shared Savings Program (the
``Policy Statement''). The Policy Statement is intended to ensure that
health care providers have the antitrust clarity and guidance needed to
form procompetitive ACOs that participate in both the Medicare and
commercial markets. The Policy Statement describes (l) The ACOs to
which the Policy Statement will apply; \8\ (2) when the Agencies will
apply rule of reason treatment to those ACOs; (3) an antitrust safety
zone; (4) the Agency review of ACOs exceeding a 50 percent share
threshold mandated by CMS under the Shared Savings Program; and (5)
options for ACOs to obtain additional antitrust certainty if they are
outside the safety zone and below the mandatory review threshold.\9\
---------------------------------------------------------------------------
\8\ The analytical principles underlying this Policy Statement
would also apply to various ACO initiatives undertaken by the
Innovation Center within CMS so long as those ACOs are substantially
clinically or financially integrated.
\9\ This Policy Statement provides guidance to allow ACOs to
determine whether they are likely to present competitive concerns.
It does not reflect the full analysis that the Agencies may use in
evaluating ACOs or any other transaction or course of conduct.
---------------------------------------------------------------------------
II. Applicability of the Policy Statement
This Policy Statement applies to collaborations among otherwise
independent providers and provider groups,\10\ formed after March 23,
2010, that seek to participate, or have otherwise been approved to
participate, in the Shared Savings Program. For ease of reference, we
refer to such collaborations as ACOs, although they may not yet have
been approved to participate as ACOs in the Shared Savings Program. We
refer to the otherwise independent providers and provider groups that
constitute the ACO as ACO participants. This Policy Statement,
including its provisions for streamlined analysis, does not apply to
mergers. Merger transactions, including transactions that meet the
criteria set forth in Section 1.3 of the Competitor Collaboration
Guidelines,\11\ will be evaluated under the Agencies' Horizontal Merger
Guidelines.\12\
---------------------------------------------------------------------------
\10\ A ``collaboration'' comprises a set of agreements, other
than merger agreements, among otherwise independent entities jointly
to engage in economic activity, and the resulting economic activity.
U.S. Dep't of Justice & Fed. Trade Comm'n, Antitrust Guidelines for
Collaborations Among Competitors Sec. 1.1 (2000), available at
https://www.ftc.gov/os/2000/04/ftcdojguidelines.pdf.
\11\ U.S. Dep't of Justice & Fed. Trade Comm'n, Antitrust
Guidelines for Collaborations Among Competitors Sec. 1.3 (2000),
available at https://www.ftc.gov/os/2000/04/ftcdojguidelines.pdf.
\12\ U.S. Dep't of Justice & Fed. Trade Comm'n, Horizontal
Merger Guidelines (rev. ed. 2010), available at https://www.justice.gov/atr/public/guidelines/hmg-2010.pdf.
---------------------------------------------------------------------------
III. The Agencies Will Apply Rule of Reason Analysis to ACOs That Meet
Certain Conditions
The antitrust laws treat naked price-fixing and market-allocation
agreements among competitors as per se illegal. Joint price agreements
among competing health care providers are evaluated under the rule of
reason, however, if the providers are financially or clinically
integrated and the agreement is reasonably necessary to accomplish the
procompetitive benefits of the integration.
A rule of reason analysis evaluates whether the collaboration is
likely to have substantial anticompetitive effects and, if so, whether
the collaboration's potential procompetitive efficiencies are likely to
outweigh those effects. The greater the likely anticompetitive effects,
the greater the likely efficiencies must be to pass muster under the
antitrust laws. The Agencies have articulated the standards for both
financial and clinical integration in various policy statements,
speeches, business reviews, and advisory opinions. For example, the
Agencies' Statements of Antitrust Enforcement Policy in Health Care
(the ``Health Care Statements'') explain that where participants in
physician or multiprovider joint ventures have
[[Page 21896]]
agreed to share substantial financial risk as defined in the Health
Care Statements, their risk-sharing arrangement generally establishes
both an overall efficiency goal for the venture and the incentives for
the participants to meet that goal. Accordingly, the setting of price
is integral to the venture's use of such an arrangement and therefore
warrants evaluation under the rule of reason.\13\ The Health Care
Statements provide examples of financial risk-sharing arrangements that
satisfy this standard, but also recognize that other acceptable
financial risk-sharing arrangements might develop.\14\
---------------------------------------------------------------------------
\13\ Dep't of Justice & Fed. Trade Comm'n, Statements of
Antitrust Enforcement Policy in Health Care (1996) [hereinafter
Health Care Statements], available at https://www.ftc.gov/reports/hlth3s.pdf.
\14\ Id.
---------------------------------------------------------------------------
The Health Care Statements further explain that provider joint
ventures also may involve clinical integration sufficient to ensure
that the venture is likely to produce significant efficiencies.\15\
Clinical integration can be evidenced by the joint venture implementing
an active and ongoing program to evaluate and modify practice patterns
by the venture's provider participants and to create a high degree of
interdependence and cooperation among the providers to control costs
and ensure quality.\16\ Federal Trade Commission staff advisory
opinions discuss evidence sufficient to demonstrate clinical
integration in specific factual circumstances.\17\
---------------------------------------------------------------------------
\15\ Id. at 83-87, 110-11.
\16\ See, e.g., Christine A. Varney, Assistant Attorney Gen.,
Antitrust Div., U.S. Dep't of Justice, Antitrust and Healthcare at
12 (May 24, 2010), available at https://www.justice.gov/atr/public/speeches/258898.pdf.
\17\ See Fed. Trade Comm'n, Advisory Opinions (1982-2010),
available at https://www.ftc.gov/bc/healthcare/industryguide/advisory.htm#2010.
---------------------------------------------------------------------------
The Affordable Care Act provides that CMS may approve ACOs that
meet certain eligibility criteria, including (1) A formal legal
structure that allows the ACO to receive and distribute payments for
shared savings; (2) a leadership and management structure that includes
clinical and administrative processes; (3) processes to promote
evidence-based medicine and patient engagement; (4) reporting on
quality and cost measures; and (5) coordinated care for
beneficiaries.\18\ CMS has further defined these eligibility criteria
through proposed regulations.\19\
---------------------------------------------------------------------------
\18\ Patient Protection and Affordable Care Act, Public Law 111-
48, section 3022 (2010).
\19\ CMS Notice of Proposed Rulemaking, Medicare Program;
Medicare Shared Savings Program: Accountable Care Organizations
(2011) [hereinafter CMS NPRM on ACOs].
---------------------------------------------------------------------------
By contrast, the Agencies have not previously listed specific
criteria required to establish clinical integration, but instead have
responded to detailed proposals from health care providers who have
decided how they wish to integrate their health care delivery systems
to improve quality and lower costs.\20\ The Agencies have wished to
avoid dictating prescriptions for how clinical integration should take
place. Nonetheless, the Agencies recognize that health care providers
seeking to create ACOs in the context of the Shared Savings Program
could benefit from greater certainty in evaluating whether an ACO that
satisfies the CMS eligibility criteria could be subject to an antitrust
investigation and potential challenge as per se illegal.
---------------------------------------------------------------------------
\20\ See generally FTC Staff Advisory Opinions (2002-Present),
available at https://www.ftc.gov/bc/healthcare/industryguide/opinionguidance.htm.
---------------------------------------------------------------------------
The Agencies have determined that CMS's proposed eligibility
criteria are broadly consistent with the indicia of clinical
integration that the Agencies previously set forth in the Health Care
Statements and identified in the context of specific proposals for
clinical integration from health care providers.\21\ The Agencies also
have determined that organizations meeting the CMS criteria for
approval as an ACO are reasonably likely to be bona fide arrangements
intended to improve the quality, and reduce the costs, of providing
medical and other health care services through their participants'
joint efforts. Further, if a CMS-approved ACO provides the same or
essentially the same services in the commercial market, the Agencies
have determined that the integration criteria are sufficiently rigorous
that joint negotiations with private-sector payers will be treated as
subordinate and reasonably related to the ACO's primary purpose of
improving health care services.
---------------------------------------------------------------------------
\21\ See, e.g., Tristate Health Partners, Inc. Advisory Opinion
from FTC Staff (April 13, 2009) (evaluating Tristate Health
Partners' proposal and stating that, if implemented as proposed,
Federal Trade Commission staff would not recommend that the
Commission challenge the proposed program), available at https://www.ftc.gov/os/closings/staff/090413tristateaoletter.pdf.
---------------------------------------------------------------------------
Further, CMS will collect and evaluate cost, utilization, and
quality metrics annually relating to each ACO's performance in the
Shared Savings Program over the three-year agreement period. This
extensive monitoring of cost, utilization, and quality metrics will
help the Agencies determine the extent to which the proposed CMS
eligibility criteria in fact lead to cost savings and improved health
care quality and may help inform the Agencies' future analysis of ACOs
and other provider organizations.
Therefore, the Agencies will provide rule of reason treatment to an
ACO if, in the commercial market, the ACO uses the same governance and
leadership structure and the same clinical and administrative processes
as it uses to qualify for and participate in the Shared Savings
Program. This rule of reason treatment will apply to the ACO for the
duration of its participation in the Shared Savings Program. The
Agencies further note that CMS's proposed regulations allow an ACO to
propose alternative ways to establish clinical integration, and the
Agencies are willing to consider other proposals for clinical
integration as well.
IV. The Agencies' Antitrust Analysis of ACOs That Meet CMS Eligibility
Criteria
As an initial step in determining whether an ACO is likely to raise
competitive concerns, the Agencies will use a streamlined analysis that
evaluates the ACO's share of services in each ACO participant's Primary
Service Area (``PSA'').\22\ The higher the PSA share, the greater the
risk the ACO will be anticompetitive. An ACO with high PSA shares may
reduce quality, innovation, and choice for Medicare and commercial
patients, in part by reducing the ability of competing equally or more
efficient ACOs to form. High PSA shares also may allow the ACO to raise
prices to commercial health plans above competitive levels. On the
other hand, if there are already other competing ACOs, or sufficient
suitable unaffiliated physicians and hospitals to form competing ACOs,
it is less likely that the ACO would raise significant competitive
concerns.
---------------------------------------------------------------------------
\22\ While a PSA does not necessarily constitute a relevant
antitrust geographic market, it nonetheless provides a useful tool
for evaluating potential competitive effects.
---------------------------------------------------------------------------
The following Sections describe how the Agencies will treat ACO
applicants that meet CMS eligibility criteria for the Shared Savings
Program, based on different ranges of PSA shares.\23\ Depending on an
ACO's range of PSA shares, CMS may mandate, or an ACO may choose to
seek, an expedited antitrust review. An ACO will submit its request for
expedited review to both Agencies, and the Agencies will then determine
which Agency will be the reviewing Agency and will notify the applicant
of such.\24\ The Agencies shall
[[Page 21897]]
establish a Federal Trade Commission/Department of Justice ACO Working
Group to collaborate and discuss issues arising out of the ACO reviews.
This process will allow ACOs to rely on the expertise of both Agencies
and ensure efficient, cooperative, and expeditious reviews.\25\
---------------------------------------------------------------------------
\23\ We expect ACOs to maintain, for the duration of the
agreement period with CMS, the data on which they relied to
calculate their PSA shares.
\24\ The provisions regarding non-disclosure of competitively
sensitive or business confidential information set forth in 28 CFR
50.6 (2010) (U.S. Department of Justice business review letters) and
16 CFR 1.1-1.4 (2010) (Federal Trade Commission advisory opinions)
would generally apply to the expedited review process.
\25\ For example, it has been standard practice for the Agencies
to share with each other their proposed health care business review
and staff advisory opinion letters before issuing them in final form
to ensure application of consistent standards of antitrust review.
---------------------------------------------------------------------------
A. The Antitrust Safety Zone for ACOs in the Shared Savings Program
This Section sets forth an antitrust safety zone for ACOs that meet
the CMS eligibility criteria to participate in the Shared Savings
Program and are highly unlikely to raise significant competitive
concerns. The Agencies will not challenge ACOs that fall within the
safety zone, absent extraordinary circumstances. ACOs in the safety
zone, therefore, have no obligation to contact the Agencies.
The Agencies emphasize that ACOs outside the safety zone are not
presumptively unlawful. Indeed, ACOs outside the safety zone frequently
may be procompetitive and lawful. Rather, the creation of a safety zone
simply reflects a view that ACOs that fall within it are highly
unlikely to raise significant competitive concerns, so no initial
competitive review is necessary.
For an ACO to fall within the safety zone, independent ACO
participants (e.g., physician group practices) that provide the same
service (a ``common service'') must have a combined share of 30 percent
or less of each common service in each participant's PSA, wherever two
or more ACO participants provide that service to patients from that
PSA.\26\ The PSA for each service is defined as ``the lowest number of
contiguous postal zip codes from which the [ACO participant] draws at
least 75 percent of its [patients]'' for that service.\27\
---------------------------------------------------------------------------
\26\ For example, if two physician group practices form an ACO
and each includes cardiologists and oncologists, cardiology and
oncology would be common services. If, on the other hand, one
physician group practice consists only of cardiologists and the
other only of oncologists, then there are no common services and the
ACO falls within the safety zone regardless of its share, subject to
the dominant provider limitation, described below.
\27\ Medicare Program: Physicians' Referrals to Health Care
Entities With Which They Have Financial Relationships (Phase II), 69
FR 16094 (Mar. 26, 2004).
---------------------------------------------------------------------------
Any hospital or ambulatory surgery center (``ASC'') participating
in an ACO must be non-exclusive to the ACO to fall within the safety
zone, regardless of its PSA share. In a non-exclusive ACO, a hospital
or ASC is allowed to contract individually or affiliate with other ACOs
or commercial payers.\28\ The safety zone for physician and other
provider services (regardless of whether the physicians or other
providers are hospital employees) does not differ based on whether the
physicians or other providers are exclusive or non-exclusive to the
ACO, unless they fall within the rural exception or dominant provider
limitation described below.
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\28\ The ACO must be non-exclusive in fact and not just in name.
The Health Care Statements explain the indicia of non-exclusivity
that the Agencies consider relevant to this evaluation. Health Care
Statements, supra note 9, at 66-67.
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The Appendix to this Policy Statement describes how, and identifies
the data sources available, to calculate an ACO's shares of services
(i.e., physician specialties, major diagnostic categories (``MDCs'')
for inpatient facilities, and outpatient categories for outpatient
facilities) \29\ in the relevant PSAs and provides examples.
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\29\ While these services do not necessarily constitute relevant
antitrust product markets, they nonetheless provide a useful tool
for evaluating potential competitive effects.
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Rural Exception: An ACO may include one physician per specialty
from each rural county (as defined by the U.S. Census Bureau) on a non-
exclusive basis and qualify for the safety zone, even if the inclusion
of these physicians causes the ACO's share of any common service to
exceed 30 percent in any ACO participant's PSA for that service.\30\
Likewise, an ACO may include Rural Hospitals \31\ on a non-exclusive
basis and qualify for the safety zone, even if the inclusion of a Rural
Hospital causes the ACO's share of any common service to exceed 30
percent in any ACO participant's PSA for that service.
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\30\ The definition and list of rural counties are available at
https://www.census.gov/geo/www/ua/2010urbanruralclass.html.
\31\ For the purposes of this Policy Statement, a Rural Hospital
is defined as a Sole Community Hospital or a Critical Access
Hospital. A Sole Community Hospital is a hospital that is paid under
the Medicare hospital inpatient prospective payment system and is
either located more than 35 miles from other like hospitals or is
located in a rural area, and meets the criteria for Sole Community
Hospital status as specified at 42 CFR 412.92. See also https://www.cms.gov/MLNProducts/downloads/SoleCommHospfctsht508-09.pdf. A
Critical Access Hospital is a rural community hospital that has been
certified as a Medicare Critical Access Hospital, based on the
criteria described in 42 CFR part 485 subpart F.
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Dominant Provider Limitation: This limitation applies to any ACO
that includes a participant with a greater than 50 percent share in its
PSA of any service that no other ACO participant provides to patients
in that PSA. Under these conditions, the ACO participant (a ``dominant
provider'') must be non-exclusive to the ACO to fall within the safety
zone.\32\ In addition, to fall within the safety zone, an ACO with a
dominant provider cannot require a commercial payer to contract
exclusively with the ACO or otherwise restrict a commercial payer's
ability to contract or deal with other ACOs or provider networks.
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\32\ For example, a physician group participating in the ACO may
comprise a specialty not found in any other ACO participant. In this
case, the ACO may be eligible for the safety zone even if the
physician group's share exceeds 50 percent, but only if the
physician group participates in the ACO on a non-exclusive basis and
the ACO does not restrict a commercial payer's ability to contract
or deal with other ACOs or provider groups.
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The safety zone will remain in effect for the duration of an ACO's
agreement with CMS, unless there is a significant change to the ACO's
provider composition. An ACO that is not within the rural exception and
later exceeds the 30 percent share limitation solely because it
attracts more patients will not lose its safety zone status.
B. Mandatory Antitrust Agency Review of ACOs Exceeding the 50 Percent
PSA Share Threshold
As described in the CMS regulations, an ACO that does not qualify
for the rural exception cannot participate in the Shared Savings
Program if its share exceeds 50 percent for any common service that two
or more independent ACO participants provide to patients in the same
PSA, unless, as part of the CMS application process, the ACO provides
CMS with a letter from one of the Agencies stating that the reviewing
Agency has no present intention to challenge or recommend challenging
the ACO under the antitrust laws.\33\ This 50 percent share threshold
for mandatory review provides a valuable indication of the potential
for competitive harm from ACOs with high PSA shares. When conducting a
review, however, the Agencies will consider any information or
alternative data suggesting that the PSA shares may not reflect the
ACO's likely market power, and also will consider any substantial
procompetitive justification for why the ACO needs that proposed share
to provide high-quality,
[[Page 21898]]
cost-effective care to Medicare beneficiaries and patients in the
commercial market.
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\33\ CMS NPRM on ACOs. When the Federal Trade Commission is the
reviewing Agency, Commission staff will perform the ACO review
pursuant to the Commission's authorization of its staff in 16 CFR
1.1(b). When the Antitrust Division is the reviewing Agency, the
Assistant Attorney General in charge of the Antitrust Division or
her delegate will sign the letter. 28 CFR 50.6.
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The Agencies are committed to providing an expedited review of ACOs
that exceed the 50 percent PSA share threshold. To obtain this
expedited review, however, the ACO must submit the following documents
and information to the reviewing Agency:\34\
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\34\ The ACO must represent in writing that it has undertaken a
good-faith search for the documents and information specified in
this Policy Statement and, where applicable, provided all responsive
material. Moreover, the Agencies may request additional documents
and information where necessary to evaluate the ACO.
---------------------------------------------------------------------------
1. The application and all supporting documents that the ACO plans
to submit, or has submitted, to CMS or that CMS requires the ACO to
retain as part of the Shared Savings Program application process
2. Documents or agreements relating to the ability of the ACO
participants to compete with the ACO, either individually or through
other ACOs or entities, or to any financial or other incentives to
encourage ACO participants to contract with CMS or commercial payers
through the proposed ACO
3. Documents discussing the ACO's business strategies or plans to
compete in the Medicare and commercial markets and the ACO's likely
impact on the prices, cost, or quality of any service provided by the
ACO to Medicare beneficiaries, commercial health plans, or other payers
4. Documents showing the formation of any ACO or ACO participant
that was formed in whole or in part, or otherwise affiliated with the
ACO, after March 23, 2010
5. Information sufficient to show the following:
a. The ACO's PSA share calculations for each common service, as
described in the Appendix, and the ACO's PSA share calculations for
each common service provided to commercial customers where those shares
differ significantly from the PSA share calculations based on Medicare
data (e.g., PSA share calculations for pediatricians or obstetricians)
b. Restrictions that prevent ACO participants from obtaining
information regarding prices that other ACO participants charge
commercial payers that do not contract through the ACO
c. The identity, including points of contact, of the five largest
commercial health plans or other payers, actual or projected, for the
ACO's services
d. The identity of any other existing or proposed ACO known to
operate, or known to plan to operate, in any PSA in which the ACO will
provide services
All of the above documents and information must be received by the
reviewing Agency at least 90 days before the last day on which CMS has
stated that it will accept ACO applications to participate in the
Shared Savings Program for the relevant calendar year.\35\
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\35\ For example, if CMS sets November 1, 2011, as the last date
for accepting applications to begin participation in the Shared
Savings Program on January 1, 2012, then the Agency must receive all
of the above documents and information on or before August 3, 2011.
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Within 90 days of receiving all of the above documents and
information, the reviewing Agency will advise the ACO that the Agency
1. has no present intent to challenge or recommend challenging the
ACO, as described in the documents provided and, if appropriate,
conditioned on the ACO's written agreement to take specific steps to
remedy concerns raised by the Agency; or
2. is likely to challenge or recommend challenging the ACO if it
proceeds. Pursuant to CMS regulations, CMS will not approve for the
Shared Savings Program an ACO that has received a letter stating that
the reviewing Agency is likely to challenge or recommend challenging
the ACO if it proceeds.\36\ ACOs that exceed the 50 percent threshold
can reduce the likelihood of antitrust concern by avoiding the conduct
set forth in Section IV.C (1) through (5) below.
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\36\ Moreover, if at any time during the ACO's agreement period
with CMS there is a significant change to the ACO's provider
composition such that the ACO exceeds the 50 percent threshold or is
materially different than what was initially reviewed, the ACO must
seek antitrust review as set forth above. However, an ACO that
exceeds the 50 percent threshold solely because it attracts more
patients will not be required to seek antitrust review. CMS NPRM on
ACOs.
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C. ACOs Below the 50 Percent Mandatory Review Threshold and Outside the
Safety Zone
ACOs that are outside the safety zone and below the 50 percent
mandatory review threshold frequently may be procompetitive. The key
issue is whether the ACO, on balance, will provide consumers with high-
quality, cost-effective health care or, instead, increase price and
reduce consumer choice and value. An ACO in this category that does not
impede the functioning of a competitive market and that engages in
procompetitive activities will not raise competitive concerns and may
proceed without Agency scrutiny. As is current practice, however, if it
appears that an ACO's formation or conduct may be anticompetitive, one
of the Agencies may investigate the ACO and, if appropriate, take
enforcement action at any time during the ACO's participation in the
Shared Savings Program.
To provide additional antitrust guidance for ACOs that fall below
the mandatory review threshold and outside the safety zone, the
Agencies identify five types of conduct that an ACO can avoid to reduce
significantly the likelihood of an antitrust investigation.
Specifically, the Agencies believe that an ACO in this category is
highly unlikely to present competitive concerns if the ACO avoids the
conduct set forth in (1) through (5) below. Avoiding the first four
types of conduct is important to facilitate payers' ability to offer
insurance products that differentiate among providers based on cost and
quality. Avoiding the final type of conduct ensures that the ACO does
not facilitate collusion involving ACO participants that contract with
payers outside the ACO.
1. Preventing or discouraging commercial payers from directing or
incentivizing patients to choose certain providers, including providers
that do not participate in the ACO, through ``anti-steering,''
``guaranteed inclusion,'' ``product participation,'' ``price parity,''
or similar contractual clauses or provisions
2. Tying sales (either explicitly or implicitly through pricing
policies) of the ACO's services to the commercial payer's purchase of
other services from providers outside the ACO (and vice versa),
including providers affiliated with an ACO participant (e.g., an ACO
may not require a purchaser to contract with all the hospitals in the
same network as the hospital that belongs to the ACO)
3. With an exception for primary care physicians, contracting with
other ACO physician specialists, hospitals, ASCs, or other providers on
an exclusive basis, thus preventing or discouraging them from
contracting outside the ACO, either individually or through other ACOs
or provider networks
4. Restricting a commercial payer's ability to make available to
its health plan enrollees cost, quality, efficiency, and performance
information to aid enrollees in evaluating and selecting providers in
the health plan, if that information is similar to the cost, quality,
efficiency, and performance measures used in the Shared Savings Program
5. Sharing among the ACO's provider participants competitively
sensitive pricing or other data that they could use to set prices or
other terms for services they provide outside the ACO
[[Page 21899]]
An ACO that desires further certainty regarding the application of
the antitrust laws to its formation and planned operation can seek an
expedited review from one of the Agencies, similar to the mandatory
review for ACOs above the 50 percent threshold described in Section
IV.B above. The reviewing Agency will complete the review within 90
days of receiving all of the necessary documents and information (as
described in the mandatory review above and according to the same
deadlines) and will inform the ACO of the outcome of the review. The
reviewing Agency will advise the ACO of the Agency's intention
according to the options described in Section IV.B above. Pursuant to
CMS regulations, CMS will not approve for the Shared Savings Program an
ACO that has received a letter stating that the reviewing Agency is
likely to challenge or recommend challenging the ACO if it
proceeds.\37\
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\37\ CMS NPRM on ACOs.
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Appendix
This Appendix explains how to calculate the PSA shares of common
services discussed in this Policy Statement.\38\ There are three steps:
---------------------------------------------------------------------------
\38\ Any ACO participant that wants to determine whether it
meets the dominant provider limitation of the safety zone should
calculate its PSA share in a similar manner.
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1. Identify each service provided by at least two independent ACO
participants (i.e., each common service). A service is defined as
follows:
a. For physicians, a service is the physician's primary specialty,
as designated on the physician's Medicare Enrollment Application. Each
specialty is identified by its Medicare Specialty Code (``MSC''), as
defined by CMS.\39\
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\39\ CMS will make publicly available the most current list of
applicable specialties. Specialty Codes 01 (general practice), 08
(family practice), 11 (internal medicine), and 38 (geriatric
medicine) are considered ``Primary Care'' specialties, and are
treated as a single service for the purposes of this Policy
Statement.
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b. For inpatient facilities (e.g., hospitals), a service is an
MDC.\40\
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\40\ CMS will make publicly available the most current list of
MDCs.
---------------------------------------------------------------------------
c. For outpatient facilities (e.g., ASCs or hospitals), a service
is an outpatient category, as defined by CMS.\41\
---------------------------------------------------------------------------
\41\ CMS will make publicly available a list of applicable
outpatient categories as well as data necessary to assign procedure
codes to the appropriate category.
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2. Identify the PSA for each common service for each participant
(e.g., physician group, inpatient facility, or outpatient facility) in
the ACO. For each common service and each participant, the PSA is
defined as the lowest number of contiguous postal zip codes from which
the participant draws at least 75 percent of its patients for that
service.\42\
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\42\ This PSA calculation is based on the Stark II regulations.
Medicare Program: Physicians' Referrals to Health Care Entities With
Which They Have Financial Relationships (Phase II), 69 FR 16094
(Mar. 26, 2004).
---------------------------------------------------------------------------
3. Calculate the ACO's PSA share for each common service in each
PSA from which at least two ACO participants serve patients for that
service. For physician services, the ACO applicant should calculate its
shares of Medicare fee-for-service allowed charges (i.e., the amount
that a provider is entitled to receive for the service provided) during
the most recent calendar year for which data are available. For
outpatient services, the ACO applicant should calculate its shares of
Medicare fee-for-service payments during the most recent calendar year
for which data are available. CMS will make public the data necessary
to identify the full range of services and the aggregate fee-for-
service allowed charges or payments for each service, by zip code. For
inpatient services, the ACO applicant should calculate its shares of
inpatient discharges, using state-level all-payer hospital discharge
data where available, for the most recent calendar year for which data
are available. For ACOs located in a state where all-payer hospital
discharge data are not available, the ACO applicant should calculate
its shares of Medicare fee-for-service payments during the most recent
federal fiscal year for which data are available (CMS will make public
the necessary data). For those services that are rarely used by
Medicare beneficiaries (e.g., pediatrics, obstetrics, and neonatal
care), the ACO may use other available data to determine the relevant
shares. For example, for services where Medicare data are not
applicable, data on the number of actively participating physicians
within the specialty and within the PSA may be a reasonable alternative
for the purposes of calculating shares of physician services.
Example of How To Calculate an ACO's PSA Shares
The following example illustrates how to calculate the ACO's
relevant PSA shares. Assume that two independent physician practices,
two independent hospitals, and an ASC propose to form an ACO. For
purposes of this example, further assume that the hospitals do not
directly employ physicians. If they do, then services provided by the
hospitals' employed physicians would need to be taken into account in
calculating the ACO's shares for each common service.
For the physician groups:
1. Identify the Physician Groups' common MSCs. In this example,
Physician Group A (``PG A'') has physicians with general surgery (MSC
02) and orthopedic surgery specialties (MSC 20). Physician Group B
(``PG B'') has physicians with orthopedic surgery (MSC 20) and
cardiology (MSC 06) specialties. The common service is orthopedic
surgery, not general surgery or cardiology, because PG A does not have
cardiologists and PG B does not have general surgeons.
2. Identify the PSAs by zip code for orthopedic surgery for each
Physician Group. In this example, there will be two PSAs: One for PG
A's orthopedic surgery practice (``PSA A'') and one for PG B's
orthopedic surgery practice (``PSA B'').
3. Determine the ACO's share in each of the relevant PSAs. In this
example, both PG A's and PG B's orthopedic surgeons serve patients
located in both PSAs. Thus, shares need to be calculated in PSA A and
PSA B. The ACO's share of orthopedic surgery in PSA A would be the
total Medicare allowed charges for claims billed by the ACO's
orthopedic surgeons (which are PG A's and PG B's total allowed charges
for claims billed by orthopedic surgeons for Medicare beneficiaries in
PSA A's zip codes) divided by the total allowed charges for orthopedic
surgery for all Medicare beneficiaries in PSA A. Likewise, the ACO's
share of orthopedic surgery services in PSA B would be the total
Medicare allowed charges for claims billed by the ACO's orthopedic
surgeons (which are PG A's and PG B's total allowed charges for claims
billed by orthopedic surgeons for Medicare beneficiaries in PSA B's zip
codes) divided by the total allowed charges for orthopedic surgery for
all Medicare beneficiaries in PSA B.
For the inpatient services:
1. Identify the hospitals' common MDCs. In this example, Hospital 1
and Hospital 2 each provide services in 10 MDCs, but only two are
common services: Cardiac care (i.e., services related to diseases and
disorders of the circulatory system--MDC 05) and orthopedic care (i.e.,
services related to diseases and disorders of the musculoskeletal
system and connective tissue--MDC 08).
2. Identify the PSAs by zip codes for cardiac care and orthopedic
care for each hospital. In this example, there will be four PSAs:
Hospital 1 PSA for cardiac care, Hospital 1 PSA for orthopedic care,
Hospital 2 PSA for cardiac care, and Hospital 2 PSA for orthopedic
care.
[[Page 21900]]
3. Determine the ACO's share in each of the relevant PSAs. In this
example, Hospital l and Hospital 2 both serve cardiac patients located
in each hospital's PSA for cardiac care, and both serve orthopedic
patients in each hospital's PSA for orthopedic care. Thus, shares need
to be calculated in all four PSAs. The ACO's share of cardiac care in
Hospital 1's PSA would be the ACO's total number of inpatient
discharges for MDC 05 (which are Hospital 1's and Hospital 2's total
inpatient discharges for cardiac care in Hospital l's PSA) divided by
the total number of inpatient discharges for MDC 05 for all residents
of this PSA. Use the same process for the other three PSAs.
For the outpatient services:
1. Identify the hospitals' and ASC's common outpatient categories.
In this example, Hospital 1 does not provide outpatient services, while
Hospital 2 and the ASC each provide services in 10 outpatient
categories, but only two are common services: cardiovascular tests/
procedures (outpatient category 2) and musculoskeletal procedures
(outpatient category 5).
2. Identify the PSAs by zip codes for cardiovascular tests/
procedures and musculoskeletal procedures for each facility. In this
example, there will be four PSAs: Hospital 2 PSA for cardiovascular
tests/procedures, Hospital 2 PSA for musculoskeletal procedures, ASC
PSA for cardiovascular tests/procedures, and ASC PSA for
musculoskeletal procedures.
3. Determine the ACO's share in each of the relevant PSAs. In this
example, Hospital 2 and ASC both provide cardiovascular tests/
procedures to patients located in each facility's PSA for
cardiovascular tests/procedures, and both provide musculoskeletal
procedures to patients located in each facility's PSA for
musculoskeletal procedures. Thus, shares need to be calculated in all
four PSAs. The ACO's share of cardiovascular tests/procedures in
Hospital 2's PSA would be the ACO's total Medicare fee-for-service
payments for outpatient category 2 (which are Hospital 2's and the
ASC's total payments for outpatient cardiovascular tests/procedures for
Medicare beneficiaries in Hospital 2's PSA) divided by the total
payments for outpatient category 2 for all Medicare beneficiaries in
this PSA. Use the same process for the other three PSAs.
Application to the Safety Zone: In this example, the ACO would
calculate ten PSA shares. If all of the shares are 30 percent or below
and the hospital inpatient and outpatient services are non-exclusive to
the ACO, then the ACO would fall within the safety zone. In other
words, the 30 percent threshold must be met in each relevant PSA for
each common service. If that condition is not met, then the ACO does
not fall within the safety zone.
Application to the Mandatory Review Threshold: If only one of the
ten PSA shares in this example exceeds 50 percent, the ACO would be
required to obtain an antitrust review from one of the Agencies before
participating in the Shared Savings Program. In other words, mandatory
review is necessary even if the share for only one common service
exceeds 50 percent in any PSA in which another ACO participant provides
that service.
V. Request for Comments
The Agencies seek public comment from health care providers,
payers, consumers, antitrust practitioners, and other stakeholders on
the following:
1. Whether and, if so, why the guidance in the proposed Policy
Statement should be changed in any respect;
2. Whether other sources of data exist that ACO applicants could
use to determine relevant PSA shares (as identified in Step 3 of the
Appendix) for:
(a) Physician services rarely used by Medicare beneficiaries (e.g.,
pediatrics, obstetrics, and neonatal care); and
(b) Inpatient hospital services located in states where all-payer
hospital discharge data are not available.
3. Whether providing the documents and information required to
obtain an expedited antitrust review will present an undue burden on
ACO applicants--specifically, the Agencies seek comment on:
(a) The necessity of and practical utility for the proposed
collection of information;
(b) The accuracy of the estimated time and cost to prepare
responses to the requested collection of information;
(c) Ways to enhance the quality, utility, and clarity of the
information to be collected; and
(d) Ways to minimize the burden of collecting the information on
those who are to respond.
Interested parties are invited to submit written comments
electronically or in paper form. Comments should state ``Proposed
Statement of Antitrust Enforcement Policy Regarding ACOs Participating
in the Medicare Shared Savings Program, Matter V100017'' both in the
text and on the envelope. Please note that your comment, including your
name and your state, will be placed on the public record of this
proceeding, including on the publicly accessible FTC Web site, at
https://www.ftc.gov/os/comments/aco-comments/index.shtm.
Because comments will be made public, they should not include any
sensitive personal information, such as an individual's Social Security
number; date of birth; driver's license number or other state
identification number, or foreign country equivalent; passport number;
financial account number; or credit or debit card number. Comments also
should not include any sensitive health information, such as medical
records or other individually identifiable health information. In
addition, comments should not include any ``[t]rade secret or any
commercial or financial information which is obtained from any person
and which is privileged or confidential,'' as provided in Section 6(f)
of the FTC Act, 15 U.S.C. 46(f), and Commission Rule 4.10(a)(2), 16 CFR
4.10(a)(2). Comments containing material for which confidential
treatment is requested must be filed in paper form and clearly labeled
``Confidential.''
Because mail delivered to the FTC by the U.S. Postal Service is
subject to delay due to heightened security screening, please consider
submitting your comments electronically. Comments filed electronically
should be submitted by using the following Web link: https://ftcpublic.commentworks.com/ftc/acoenforcementpolicy (and following the
instructions on the web-based form). To ensure that the Agencies
consider an electronic comment, you must file it on the web-based form
at the Web link https://ftcpublic.commentworks.com/ftc/acoenforcementpolicy. If this Notice appears at https://www.regulations.gov/#!home, you may also file an electronic comment
through that Web site. The Agencies will consider all comments that
regulations.gov forwards to the Commission. You may also visit the FTC
Web site at https://www.ftc.gov/opp/aco/ to read the Notice and the news
release describing it.
A comment filed in paper form should reference the ``Proposed
Statement of Antitrust Enforcement Policy Regarding ACOs Participating
in the Medicare Shared Savings Program, Matter V100017'' both in the
text and on the envelope, and should be mailed or delivered to the
following address: Federal Trade Commission, Office of the Secretary,
Room H-113 (Annex W), 600 Pennsylvania Avenue, NW., Washington, DC
20580. The FTC requests that any comment filed in paper form be sent by
courier or overnight service, if possible, because U.S. postal mail in
the Washington area and at the Commission is subject to
[[Page 21901]]
delay due to heightened security precautions.
The FTC Act and other laws the Commission administers permit the
collection of public comments to consider and use in this proceeding as
appropriate. The Agencies will consider all timely and responsive
public comments, whether filed in paper or electronic form. Comments
received will be available to the public on the FTC Web site, to the
extent practicable, at https://www.ftc.gov/os/comments/aco-comments/index.shtm. As a matter of discretion, the Commission makes every
effort to remove home contact information for individuals from the
public comments it receives before placing those comments on the FTC
Web site. More information, including routine uses permitted by the
Privacy Act, may be found in the FTC's privacy policy, at https://www.ftc.gov/ftc/privacy.shtm.
Paperwork Reduction Act
The Medicare Shared Savings Program is exempt from the Paperwork
Reduction Act.\43\ Nonetheless, the Agencies are seeking comments
relevant to the utility and burden of the submission of documents and
information (collectively, ``information'') required in connection with
requests for expedited antitrust review as described above.\44\ The
Agencies are providing this opportunity for public comment regarding
the utility of the information to be provided in support of an ACO
request for antitrust review and steps to minimize the burden of
collecting and submitting that information. Specific questions
regarding these considerations are included in the Request for Comment
part of the Supplementary Information section above.
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\43\ The Patient Protection and Affordable Care Act provides:
``Chapter 35 of title 44, United States Code [44 U.S.C. 3501 et
seq., the Paperwork Reduction Act] shall not apply to the [Medicare
Shared Savings] program.'' Patient Protection and Affordable Care
Act, Public Law 111-48, section 3022 (2010) (codified at 42 U.S.C.
1395jjj(e)).
\44\ Cf. Paperwork Reduction Act, 44 U.S.C. 3501-3521.
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Subject to further refinement by public comment, calculating the
projected overall burden of collecting and submitting the required
information necessarily entails estimating the number of ACOs that will
apply for expedited review, and the average time necessary per
applicant to respond. To help inform some of these estimates, the FTC
has drawn upon CMS's notice of proposed rulemaking regarding the
Medicare Shared Savings Program, published simultaneously with this
Federal Register notice.\45\
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\45\ CMS NPRM on ACOs.
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CMS has estimated that some 1.5 to 4 million Medicare beneficiaries
will be aligned with a participating ACO during the first three years
of the Shared Savings Program.\46\ Moreover, the amendments to the
Social Security Act that gave rise to the Program specify that, at a
minimum, the ACO shall have at least 5,000 such beneficiaries assigned
to it in order to be eligible to participate in the Shared Savings
Program.\47\ Thus, by extrapolation, there may be a range of 300 to 800
ACOs.
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\46\ Id., preamble to proposed rule.
\47\ Section 3022 of the Affordable Care Act amended Title XVIII
of the Social Security Act (42 U.S.C. 1395 et seq.) by adding new
section 1899 to establish ``a shared savings program * * * that
promotes accountability for a patient population and coordinates
items and services under [Medicare] Parts A and B, and encourages
investment in infrastructure and redesigned care processes for high
quality and efficient service delivery.'' Patient Protection and
Affordable Care Act, Public Law 111-48, section 3022 (2010)
(codified at 42 U.S.C. 1395jjj(a)(1). Section 1899(b)(2)(D)
(codified at 42 U.S.C. 1395jjj(b)(2)(D)) specifies the minimum
number of beneficiaries per eligible program participant.
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Not all of these ACO applicants will be covered by the Policy
Statement, however, because the Statement applies only to
collaborations among otherwise independent providers and provider
groups \48\ formed after March 23, 2010, the date of passage of the
Patient Protection and Affordable Care Act; it does not apply to such
collaborations formed earlier or to ACOs created through merger.\49\
Our general understanding is that a number of long-existing
institutions will apply to become ACOs, but also that a number of ACO
applicants are likely to be newly formed. Accordingly, we estimate that
roughly one-half of ACO applicants will be covered, yielding a range of
150 to 400 ACOs likely to be covered by the Policy Statement.
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\48\ A ``collaboration'' comprises a set of agreements, other
than merger agreements, among otherwise independent entities jointly
to engage in economic activity, and the resulting economic activity.
U.S. Dep't of Justice & Fed. Trade Comm'n, Antitrust Guidelines for
Collaborations Among Competitors Sec. 1.1 (2000), available at
https://www.ftc.gov/os/2000/04/ftcdojguidelines.pdf.
\49\ Merger transactions, including transactions that meet the
criteria set forth in Section 1.3 of the Competitor Collaboration
Guidelines, will be evaluated under the Agencies' Horizontal Merger
Guidelines. See U.S. Dep't of Justice & Fed. Trade Comm'n, Antitrust
Guidelines for Collaborations Among Competitors Sec. 1.3 (2000),
available at https://www.ftc.gov/os/2000/04/ftcdojguidelines.pdf;
U.S. Dep't of Justice & Fed. Trade Comm'n, Horizontal Merger
Guidelines (rev. ed. 2010), available at https://www.justice.gov/atr/public/guidelines/hmg-2010.pdf.
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Not all ACO applicants covered by the Policy Statement will need to
seek expedited antitrust review, however; only ACO applicants not
qualifying for the rural exception and having a share over 50 percent
for any common service provided to patients by two or more independent
ACO participants in the same PSA must do so. Other ACO applicants that
are not required to obtain an antitrust review and do not fall within
the Policy Statement's Safety Zone nonetheless may obtain a review if
they wish additional antitrust certainty. For the purposes of this
burden analysis, we estimate that the number of submissions for
expedited antitrust review, both required and voluntary, will range
from roughly one-quarter to one-half of all ACO applications covered by
the Policy Statement. This yields an estimated range of 38 to 200 ACO
applicants that will seek antitrust review. Erring conservatively, the
following burden estimate will use the upper bound estimate, i.e., 200
submissions.
In developing an estimate of the time necessary for applying ACOs
to collect and review and submit the information for antitrust review,
we note that the Policy Statement asks for the application the ACO has
submitted or plans to submit to CMS, information that will already have
been gathered and organized. Other required information is similar in
nature to that required when submitting a pre-merger notification
filing under the Hart-Scott-Rodino Act (``HSR''); \50\ the basic burden
estimate for HSR premerger notification filings, OMB Control No. 3084-
0005, is 39 hours. Accordingly, we estimate that, in the aggregate,
ACOs and their antitrust counsel likely will devote approximately 30 to
50 hours to retrieving, reviewing, and submitting the information. This
estimate is conservative, since submitters may submit information about
the relevant markets in a format of their choosing. There is no
prescribed notification and report form as there is for a submission
under the HSR Rules.\51\
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\50\ See Section 7A of the Clayton Act, 15 U.S.C. 18a, as
amended by the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
Public Law 94-435, 90 Stat. 1390.
\51\ See 16 CFR 801-803 (2010).
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Estimated Labor Costs
It is not possible to calculate with precision the labor costs
associated with providing the required information, because responses
will entail participation by management and support staff at various
compensation levels within many different entities. Individuals within
some or all of those labor categories may be involved in the
information-collection process. Nonetheless, the FTC has assumed that
executive-level personnel and outside legal counsel will handle most of
the
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tasks involved in gathering and producing the responsive information,
and has applied an average hourly wage of $460/hour for their labor.
Thus, the labor costs per applicant for expedited review should range
from approximately $13,800 to $23,000.
Estimated Annual Capital or Other Non-Labor Costs
The capital or other non-labor costs associated with the
information requests will be minimal. Industry members should already
have in place the means to store information of the volume requested.
In addition, respondents may have to purchase office supplies such as
file folders, computer CDs or DVDs, photocopier toner, or paper in
order to comply with the Commission's r
