I

103D CONGRESS

2D SESSION H. R. 3486

To establish safe harbors from the application of the antitrust laws for

certain activities of providers of health care services, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

NOVEMBER 10, 1993

Mr. ARCHER introduced the following bill; which was referred to the

Committee on the Judiciary

MAY 12, 1994

Additional sponsors: Mr. CALLAHAN, Mr. BARCIA of Michigan, Mr. GOSS, Mr.

PARKER, Mr. PETRI, Mrs. FOWLER, Mr. CANADY, Mr. DUNCAN, Mr.

DORNAN, Mr. DICKEY, Mr. SUNDQUIST, Mr. DERRICK, Mr. ALLARD, Mr.

KLUG, Mr. GORDON, Mr. BONILLA, Mr. ZELIFF, Mr. INHOFE, Mr.

DELAY, Mr. GOODLING, Mrs. LLOYD, Mr. HUTCHINSON, Mr. CRAPO, Mr.

MANZULLO, Mr. TAYLOR of North Carolina, Mrs. UNSOELD, Mr. BREWSTER, Mr. FRANKS of Connecticut, Mr. FIELDS of Texas, Mr. SWETT,

Mr. NUSSLE, Mr. THOMAS of Wyoming, Mr. UPTON, Mr. BOEHNER, Mr.

SENSENBRENNER, Mr. RAVENEL, Mr. COMBEST, Mr. CRAMER, Mr.

CLEMENT, Mr. LEVY, Mrs. VUCANOVICH, Mr. HALL of Ohio, Mr. MONTGOMERY, Ms. PRYCE of Ohio, Mr. KNOLLENBERG, Mr. PETE GEREN of

Texas, Mr. YOUNG of Alaska, Mr. HOEKSTRA, Mr. SMITH of Oregon, Mr.

RAMSTAD, Mr. INSLEE, Mr. STUMP, Mr. MCDADE, Mr. PAXON, Mr.

PORTMAN, Mr. SMITH of New Jersey, Mr. MCHUGH, Mr. BUNNING, Mr.

BACHUS of Alabama, Mr. HOBSON, Mr. COBLE, Mrs. BYRNE, Mr. ROGERS, Mrs. JOHNSON of Connecticut, Mr. MOORHEAD, Mr. EWING, Mr.

HANCOCK, Mr. INGLIS of South Carolina, Mr. SANGMEISTER, Mr. SHAYS,

Mr. MCCANDLESS, Mr. LIGHTFOOT, Mr. JEFFERSON, Mr. LAZIO, Mr.

KYL, Mr. EHLERS, Mr. BLILEY, Mr. OXLEY, Mr. MACHTLEY, Mr. SOLOMON, Mr. ARMEY, Mr. GOODLATTE, Mr. PACKARD, Mr. ZIMMER, Mr. PETERSON of Minnesota, Mr. DEFAZIO, Ms. MCKINNEY, Mr. ROTH, Mr.

HANSEN, Mr. BARCA of Wisconsin, Mr. DEUTSCH, Mr. MICA, Mr. CASTLE, Ms. DUNN, Mr. MCINNIS, Mr. JOHNSON of South Dakota, Mr.

HUTTO, Mr. ROWLAND, Mr. STEARNS, Mr. PAYNE of Virginia, Mr. COLLINS of Georgia, and Mr. TAUZIN
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A BILL

To establish safe harbors from the application of the antitrust laws for certain activities of providers of health

care services, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Health Care Antitrust

5 Improvements Act of 1993’’.

6 SEC. 2. EXEMPTION FROM ANTITRUST LAWS FOR CERTAIN

7 COMPETITIVE AND COLLABORATIVE ACTIVI8 TIES.

9 (a) EXEMPTION DESCRIBED.—An activity relating to

10 the provision of health care services shall be exempt from

11 the antitrust laws if—

12 (1) the activity is within one of the categories

13 of safe harbors described in section 3;

14 (2) the activity is within an additional safe har15 bor designated by the Attorney General under sec16 tion 4; or

17 (3) the activity is specified in and in compliance

18 with the terms of a certificate of review issued by

19 the Attorney General under section 5 and the activ20 ity occurs—

21 (A) while the certificate is in effect, or
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1 (B) in the case of a certificate issued dur2 ing the 2-year period beginning on the date of

3 the enactment of this Act, at any time on or

4 after the first day of the 2-year period that

5 ends on the date the certificate takes effect.

6 (b) AWARD OF ATTORNEY’S FEES AND COSTS OF

7 SUIT.—

8 (1) IN GENERAL.—If any person brings an ac9 tion alleging a claim under the antitrust laws and

10 the activity on which the claim is based is found by

11 the court to be exempt from such laws under sub12 section (a), the court shall, at the conclusion of the

13 action—

14 (A) award to a substantially prevailing

15 claimant the cost of suit attributable to such

16 claim, including a reasonable attorney’s fee, or

17 (B) award to a substantially prevailing

18 party defending against such claim the cost of

19 such suit attributable to such claim, including

20 reasonable attorney’s fee, if the claim, or the

21 claimant’s conduct during litigation of the

22 claim, was frivolous, unreasonable, without

23 foundation, or in bad faith.

24 (2) OFFSET IN CASES OF BAD FAITH.—The

25 court may reduce an award made pursuant to para-
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1 graph (1) in whole or in part by an award in favor

2 of another party for any part of the cost of suit (in3 cluding a reasonable attorney’s fee) attributable to

4 conduct during the litigation by any prevailing party

5 that the court finds to be frivolous, unreasonable,

6 without foundation, or in bad faith.

7 SEC. 3. SAFE HARBORS.

8 The following activities are safe harbors for purposes

9 of section 2(a)(1):

10 (1) COMBINATIONS WITH MARKET SHARE

11 BELOW THRESHOLD.—Activities relating to health

12 care services of any combination of health care pro13 viders if the number of each type or specialty of pro14 vider in question does not exceed 25 percent of the

15 total number of such type or specialty of provider in

16 the relevant market area.

17 (2) ACTIVITIES OF MEDICAL SELF-REGULATORY

18 ENTITIES.—

19 (A) IN GENERAL.—Subject to subpara20 graph (B), any activity of a medical self-regu21 latory entity relating to standard setting or

22 standard enforcement activities that are de23 signed to promote the quality of health care

24 provided to patients.
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1 (B) EXCEPTION.—No activity of a medical

2 self-regulatory entity may be deemed to fall

3 under the safe harbor established under this

4 paragraph if the activity is conducted for pur5 poses of financial gain.

6 (3) PARTICIPATION IN SURVEYS.—The partici7 pation of a provider of health care services in a writ8 ten survey of the prices of services, reimbursement

9 levels, or the compensation and benefits of employ10 ees and personnel, but only if—

11 (A) the survey is conducted by a third

12 party, such as a purchaser of health care serv13 ices, governmental entity, institution of higher

14 education, or trade association;

15 (B) the information provided by partici16 pants in the survey is based on prices charged,

17 reimbursements received, or compensation and

18 benefits paid prior to the third month preceding

19 the month in which the information is provided;

20 and

21 (C) if the results of the survey are dissemi22 nated, the results are aggregated in a manner

23 that ensures that no recipient of the results

24 may identify the prices charged, reimbursement
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1 received, or compensation and benefits paid by

2 any particular provider.

3 (4) JOINT VENTURES FOR HIGH TECHNOLOGY

4 AND COSTLY EQUIPMENT AND SERVICES.—Any ac5 tivity of a health care cooperative venture relating to

6 the purchase, operation, or marketing of high tech7 nology or other expensive medical equipment, or the

8 provision of high cost or complex services, but only

9 if the number of participants in the venture does not

10 exceed the lowest number needed to support the ven11 ture together with any other providers for whom the

12 participation in the venture is the only means of ob13 taining or operating such equipment or providing

14 such services.

15 (5) HOSPITAL MERGERS.—Activities relating to

16 a merger of 2 hospitals if, during the 3-year period

17 preceding the merger, one of the hospitals had an

18 average of 150 or fewer operational beds and an av19 erage daily inpatient census of less than 50 percent

20 of such beds.

21 (6) JOINT PURCHASING ARRANGEMENTS.—Any

22 joint purchasing arrangement among health care

23 providers if—

24 (A) the purchases under the arrangement

25 represent less than 35 percent of the total sales
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1 of the product purchased in the relevant market

2 area; and

3 (B) the amounts paid under the arrange4 ment represent less than 20 percent of the total

5 revenues of the supplier of the product pur6 chased.

7 (7) NEGOTIATIONS.—Activities consisting of

8 good faith negotiations to carry out any activity—

9 (A) described in this section,

10 (B) within an additional safe harbor des11 ignated by the Attorney General under section

12 4,

13 (C) that is the subject of an application for

14 a certificate of review under section 5, or

15 (D) that is deemed a submission of a noti16 fication under section 6(a)(2)(B),

17 without regard to whether such an activity is carried

18 out.

19 SEC. 4. DESIGNATION OF ADDITIONAL SAFE HARBORS.

20 (a) IN GENERAL.—

21 (1) SOLICITATION OF PROPOSALS.—Not later

22 than 30 days after the date of the enactment of this

23 Act, the Attorney General shall publish a notice in

24 the Federal Register soliciting proposals for addi25 tional safe harbors.
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1 (2) REVIEW AND REPORT ON PROPOSED SAFE

2 HARBORS.—Not later than 180 days after the date

3 of the enactment of this Act, the Attorney General

4 (in consultation with the Secretary of Health and

5 Human Services and the Chair of the Federal Trade

6 Commission) shall—

7 (A) review the proposed safe harbors sub8 mitted under paragraph (1); and

9 (B) submit a report to Congress describing

10 the proposals to be included in the publication

11 of additional safe harbors described in para12 graph (3) and the proposals that are not to be

13 so included, together with explanations there14 fore.

15 (3) PUBLICATION OF ADDITIONAL SAFE HAR16 BORS.—Not later than 180 days after the date of

17 the enactment of this Act, the Attorney General (in

18 consultation with the Secretary of Health and

19 Human Services and the Chair of the Federal Trade

20 Commission) shall publish in the Federal Register

21 proposed additional safe harbors for purposes of sec22 tion 2(a)(2) for providers of health care services.

23 Not later than 180 days after publishing such pro24 posed safe harbors in the Federal Register, the At-
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1 torney General shall issue final rules establishing

2 such safe harbors.

3 (b) CRITERIA FOR SAFE HARBORS.—In establishing

4 safe harbors under subsection (a), the Attorney General

5 shall take into account the following:

6 (1) The extent to which a competitive or col7 laborative activity will accomplish any of the follow8 ing:

9 (A) An increase in access to health care

10 services.

11 (B) The enhancement of the quality of

12 health care services.

13 (C) The establishment of cost efficiencies

14 that will be passed on to consumers, including

15 economies of scale and reduced transaction and

16 administrative costs.

17 (D) An increase in the ability of health

18 care facilities to provide services in medically

19 underserved areas or to medically underserved

20 populations.

21 (E) An improvement in the utilization of

22 health care resources or the reduction in the in23 efficient duplication of the use of such re24 sources.
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1 (2) Whether the designation of an activity as a

2 safe harbor under subsection (a) will result in the

3 following outcomes:

4 (A) Health plans and other health care in5 surers, consumers of health care services, and

6 health care providers will be better able to ne7 gotiate payment and service arrangements

8 which will reduce costs to consumers.

9 (B) Taking into consideration the charac10 teristics of the particular purchasers and pro11 viders involved, competition will not be unduly

12 restricted.

13 (C) Equally efficient and less restrictive al14 ternatives do not exist to meet the criteria de15 scribed in paragraph (1).

16 (D) The activity will not unreasonably

17 foreclose competition by denying competitors a

18 necessary element of competition.

19 SEC. 5. CERTIFICATES OF REVIEW.

20 (a) ESTABLISHMENT OF PROGRAM.—In consultation

21 with the Secretary and the Chair, the Attorney General

22 shall (not later than 180 days after the date of the enact23 ment of this Act) issue certificates of review in accordance

24 with this section for providers of health care services and
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1 advise and assist any person with respect to applying for

2 such a certificate of review.

3 (b) PROCEDURES FOR APPLICATION FOR CERTIFI4 CATE.—

5 (1) FORM; CONTENT.—To apply for a certifi6 cate of review, a person shall submit to the Attorney

7 General a written application which—

8 (A) specifies the activities relating to the

9 provision of health care services which satisfy

10 the criteria described in section 4(b) and which

11 will be included in the certificate; and

12 (B) is in a form and contains any informa13 tion, including information pertaining to the

14 overall market in which the applicant operates,

15 required by rule or regulation promulgated

16 under section 8.

17 (2) PUBLICATION OF NOTICE IN FEDERAL REG18 ISTER.—Within 10 days after an application submit19 ted under paragraph (1) is received by the Attorney

20 General, the Attorney General shall publish in the

21 Federal Register a notice that announces that an

22 application for a certificate of review has been sub23 mitted, identifies each person submitting the appli24 cation, and describes the conduct for which the ap25 plication is submitted.
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1 (3) ESTABLISHMENT OF PROCEDURES FOR IS2 SUANCE OF CERTIFICATE.—In consultation with the

3 Chair and the Secretary, the Attorney General shall

4 establish procedures to be used in applying for and

5 in determining whether to approve an application for

6 a certificate of review under this title. Under such

7 procedures the Attorney General shall approve an

8 application if the Attorney General determines that

9 the activities to be covered under the certificate will

10 satisfy the criteria described in section 4(b) for addi11 tional safe harbors designated under such section

12 and that the benefits of the issuance of the certifi13 cate will outweigh any disadvantages that may result

14 from reduced competition.

15 (4) TIMING FOR DECISION ON APPLICATION.—

16 (A) IN GENERAL.—Within 90 days after

17 the Attorney General receives an application for

18 a certificate of review, the Attorney General

19 shall determine whether the applicant’s health

20 care market activities are in accordance with

21 the procedures described in paragraph (3). If

22 the Attorney General, with the concurrence of

23 the Secretary, determines that such procedures

24 are met, the Attorney General shall issue to the
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1 applicant a certificate of review. The certificate

2 of review shall specify—

3 (i) the health care market activities to

4 which the certificate applies,

5 (ii) the person to whom the certificate

6 of review is issued, and

7 (iii) any terms and conditions the At8 torney General or the Secretary deems nec9 essary to assure compliance with the appli10 cable procedures described in paragraph

11 (3).

12 (B) APPLICATIONS DEEMED APPROVED.—

13 If the Attorney General does not reject an ap14 plication before the expiration of the 90-period

15 beginning on the date the Attorney General re16 ceives the application, the Attorney General

17 shall be deemed to have approved the applica18 tion and to have issued a certificate of review

19 relating to the applicant’s health care market

20 activities covered under the application.

21 (5) EXPEDITED ACTION.—If the applicant indi22 cates a special need for prompt disposition, the At23 torney General and the Secretary may expedite ac24 tion on the application, except that no certificate of

25 review may be issued within 30 days of publication
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1 of notice in the Federal Register under subsection

2 (b)(2).

3 (6) ACTIONS UPON DENIAL.—

4 (A) NOTIFICATION.—If the Attorney Gen5 eral denies in whole or in part an application

6 for a certificate, the Attorney General shall no7 tify the applicant of the Attorney General’s de8 termination and the reasons for it.

9 (B) REQUEST FOR RECONSIDERATION.—

10 An applicant may, within 30 days of receipt of

11 notification that the application has been denied

12 in whole or in part, request the Attorney Gen13 eral to reconsider the determination. The Attor14 ney General, with the concurrence of the Sec15 retary, shall notify the applicant of the deter16 mination upon reconsideration within 30 days

17 of receipt of the request.

18 (C) RETURN OF DOCUMENTS.—If the At19 torney General denies an application for the is20 suance of a certificate of review and thereafter

21 receives from the applicant a request for the re22 turn of documents submitted by the applicant

23 in connection with the application for the cer24 tificate, the Attorney General and the Secretary

25 shall return to the applicant, not later than 30
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1 days after receipt of the request, the documents

2 and all copies of the documents available to the

3 Attorney General and the Secretary, except to

4 the extent that the information has been made

5 public under an exception to the rule against

6 public disclosure described in subsection

7 (g)(2)(B).

8 (7) FRAUDULENT PROCUREMENT.—A certifi9 cate of review shall be void ab initio with respect to

10 any health care market activities for which the cer11 tificate was procured by fraud.

12 (c) AMENDMENT AND REVOCATION OF CERTIFI13 CATES.—

14 (1) NOTIFICATION OF CHANGES.—Any appli15 cant who receives a certificate of review—

16 (A) shall promptly report to the Attorney

17 General any change relevant to the matters

18 specified in the certificate; and

19 (B) may submit to the Attorney General

20 an application to amend the certificate to re21 flect the effect of the change on the conduct

22 specified in the certificate.

23 (2) AMENDMENT TO CERTIFICATE.—An appli24 cation for an amendment to a certificate of review

25 shall be treated as an application for the issuance of
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1 a certificate. The effective date of an amendment

2 shall be the date on which the application for the

3 amendment is submitted to the Attorney General.

4 (3) REVOCATION.—

5 (A) GROUNDS FOR REVOCATION.—In ac6 cordance with this paragraph, the Attorney

7 General may revoke in whole or in part a cer8 tificate of review issued under this section. The

9 following shall be considered grounds for the

10 revocation of a certificate:

11 (i) After the expiration of the 2-year

12 period beginning on the date a person’s

13 certificate is issued, the activities of the

14 person have not substantially accomplished

15 the purposes for the issuance of the certifi16 cate.

17 (ii) The person has failed to comply

18 with any of the terms or conditions im19 posed under the certificate by the Attorney

20 General or the Secretary under subsection

21 (b)(4).

22 (iii) The activities covered under the

23 certificate no longer satisfy the criteria set

24 forth in section 4(b).
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1 (B) REQUEST FOR COMPLIANCE INFORMA2 TION.—If the Attorney General or Secretary

3 has reason to believe that any of the grounds

4 for revocation of a certificate of review de5 scribed in subparagraph (A) may apply to a

6 person holding the certificate, the Attorney

7 General shall request such information from

8 such person as the Attorney General or the Sec9 retary deems necessary to resolve the matter of

10 compliance. Failure to comply with such request

11 shall be grounds for revocation of the certificate

12 under this paragraph.

13 (C) PROCEDURES FOR REVOCATION.—If

14 the Attorney General or the Secretary deter15 mines that any of the grounds for revocation of

16 a certificate of review described in subpara17 graph (A) apply to a person holding the certifi18 cate, or that such person has failed to comply

19 with a request made under subparagraph (B),

20 the Attorney General shall give written notice of

21 the determination to such person. The notice

22 shall include a statement of the circumstances

23 underlying, and the reasons in support of, the

24 determination. In the 60-day period beginning

25 30 days after the notice is given, the Attorney
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1 General shall revoke the certificate or modify it

2 as the Attorney General or the Secretary deems

3 necessary to cause the certificate to apply only

4 to activities that meet the procedures for the is5 suance of certificates described in subsection

6 (b)(2).

7 (D) INVESTIGATION AUTHORITY.—For

8 purposes of carrying out this paragraph, the

9 Attorney General may conduct investigations in

10 the same manner as the Attorney General con11 ducts investigations under section 3 of the Anti12 trust Civil Process Act, except that no civil in13 vestigative demand may be issued to a person

14 to whom a certificate of review is issued if such

15 person is the target of such investigation.

16 (d) REVIEW OF DETERMINATIONS.—

17 (1) AVAILABILITY OF REVIEW FOR CERTAIN AC18 TIONS.—If the Attorney General denies, in whole or

19 in part, an application for a certificate of review or

20 for an amendment to a certificate, or revokes or

21 modifies a certificate pursuant to paragraph (3), the

22 applicant or certificate holder (as the case may be)

23 may, within 30 days of the denial or revocation,

24 bring an action in any appropriate district court of

25 the United States to set aside the determination on
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1 the ground that such determination is erroneous

2 based on the preponderance of the evidence.

3 (2) NO OTHER REVIEW PERMITTED.—Except

4 as provided in paragraph (1), no action by the At5 torney General or the Secretary pursuant to this

6 title shall be subject to judicial review.

7 (3) EFFECT OF REJECTED APPLICATION.—If

8 the Attorney General denies, in whole or in part, an

9 application for a certificate of review or for an

10 amendment to a certificate, or revokes or amends a

11 certificate, neither the negative determination nor

12 the statement of reasons therefore shall be admissi13 ble in evidence, in any administrative or judicial pro14 ceeding, concerning any claim under the antitrust

15 laws.

16 (e) PUBLICATION OF DECISIONS.—The Attorney

17 General shall publish a notice in the Federal Register on

18 a timely basis of each decision made with respect to an

19 application for a certificate of review under this section

20 or the amendment or revocation of such a certificate, in

21 a manner that protects the confidentiality of any propri22 etary information relating to the application.

23 (f) ANNUAL REPORTS.—Every person to whom a cer24 tificate of review is issued shall submit to the Attorney

25 General an annual report, in such form and at such time
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1 as the Attorney General may require, that contains any

2 necessary updates to the information required under sub3 section (b) and a description of the activities of the holder

4 under the certificate during the preceding year.

5 (g) RESTRICTIONS ON DISCLOSURE OF INFORMA6 TION.—

7 (1) WAIVER OF DISCLOSURE REQUIREMENTS

8 UNDER ADMINISTRATIVE PROCEDURE ACT.—Infor9 mation submitted by any person in connection with

10 the issuance, amendment, or revocation of a certifi11 cate of review shall be exempt from disclosure under

12 section 552 of title 5, United States Code.

13 (2) RESTRICTIONS ON DISCLOSURE OF COM14 MERCIAL OR FINANCIAL INFORMATION.—

15 (A) IN GENERAL.—Except as provided in

16 subparagraph (B), no officer or employee of the

17 United States shall disclose commercial or fi18 nancial information submitted in connection

19 with the issuance, amendment, or revocation of

20 a certificate of review if the information is priv21 ileged or confidential and if disclosure of the in22 formation would cause harm to the person who

23 submitted the information.
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1 (B) EXCEPTIONS.—Subparagraph (A)

2 shall not apply with respect to information dis3 closed—

4 (i) upon a request made by the Con5 gress or any committee of the Congress,

6 (ii) in a judicial or administrative pro7 ceeding, subject to appropriate protective

8 orders,

9 (iii) with the consent of the person

10 who submitted the information,

11 (iv) in the course of making a deter12 mination with respect to the issuance,

13 amendment, or revocation of a certificate

14 of review, if the Attorney General deems

15 disclosure of the information to be nec16 essary in connection with making the

17 determination,

18 (v) in accordance with any require19 ment imposed by a statute of the United

20 States, or

21 (vi) in accordance with any rule or

22 regulation promulgated under subsection

23 (i) permitting the disclosure of the infor24 mation to an agency of the United States

25 or of a State on the condition that the
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1 agency will disclose the information only

2 under the circumstances specified in

3 clauses (i) through (v).

4 (3) PROHIBITION AGAINST USE OF INFORMA5 TION TO SUPPORT OR ANSWER CLAIMS UNDER ANTI6 TRUST LAWS.—Any information disclosed in an ap7 plication for a certificate of review under this section

8 shall only be admissible into evidence in a judicial or

9 administrative proceeding for the sole purpose of

10 establishing that a person is entitled to the protec11 tions provided by such a certificate.

12 SEC. 6. NOTIFICATIONS PROVIDING REDUCTION IN CER13 TAIN PENALTIES UNDER ANTITRUST LAW

14 FOR HEALTH CARE COOPERATIVE VEN15 TURES.

16 (a) NOTIFICATIONS DESCRIBED.—

17 (1) SUBMISSION OF NOTIFICATION BY VEN18 TURE.—Any party to a health care cooperative ven19 ture, acting on such venture’s behalf, may, not later

20 than 90 days after entering into a written agreement

21 to form such venture or not later than 90 days after

22 the date of the enactment of this Act, whichever is

23 later, file with the Attorney General a written notifi24 cation disclosing—
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1 (A) the identities of the parties to such

2 venture,

3 (B) the nature and objectives of such ven4 ture, and

5 (C) such additional information as the At6 torney General may require by regulation.

7 (2) ACTIVITIES DEEMED SUBMISSION OF NOTI8 FICATION.—The following health care cooperative

9 ventures shall be deemed to have filed a written noti10 fication with respect to the venture under paragraph

11 (1):

12 (A) SUBMISSION OF APPLICATION FOR

13 CERTIFICATE OF REVIEW.—Any health care co14 operative venture for which an application for a

15 certificate of review is filed with the Attorney

16 General under section 4.

17 (B) ENGAGING IN RISK-SHARING ACTIVI18 TIES UNDER VENTURE.—Any health care coop19 erative venture whose members engage in risk20 sharing arrangements, including (but not lim21 ited to)—

22 (i) the acceptance of capitation con23 tracts;

24 (ii) the acceptance of contracts with

25 fee withholding mechanisms relating to the
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1 ability to meet established goals for utiliza2 tion review and management; and

3 (iii) the holding by members of signifi4 cant ownership or equity interests in the

5 venture, where the capital contributed by

6 the members is used to fund the oper7 ational costs of the venture such as admin8 istration, marketing, and computer-oper9 ated medical information, if the venture

10 develops and operates comprehensive pro11 grams for utilization management and

12 quality assurance that include controls

13 over the use of institutional, specialized,

14 and ancillary medical services.

15 (C) VENTURES BELOW CERTAIN SIZE.—

16 Any health care cooperative venture consisting

17 of a network of providers not greater than—

18 (i) in the case of a nonexclusive net19 work in which the participating members

20 are permitted to create or join other com21 peting networks, 50 percent of the provid22 ers of health care services in the relevant

23 geographic area and 50 percent of the

24 members of the provider specialty group in

25 the relevant market area; or
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1 (ii) in the case of an exclusive network

2 in which the participating members are not

3 permitted to create or join other competing

4 networks, 35 percent of the providers of

5 health care services in the relevant geo6 graphic area and 35 percent of the mem7 bers of the provider specialty group in the

8 relevant market area.

9 (3) SUBMISSION OF ADDITIONAL INFORMA10 TION.—

11 (A) REQUEST OF ATTORNEY GENERAL.—

12 At any time after receiving a notification filed

13 under paragraph (1), the Attorney General may

14 require the submission of additional information

15 or documentary material relevant to the pro16 posed health care cooperative venture.

17 (B) PARTIES TO VENTURE.—Any party to

18 a health care cooperative venture may submit

19 such additional information on the venture’s be20 half as may be appropriate to ensure that the

21 venture will receive the protections provided

22 under subsection (b).

23 (C) REQUIRED SUBMISSION OF INFORMA24 TION ON CHANGES TO VENTURE.—A health

25 care cooperative venture for which a notification
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1 is in effect under this section shall submit infor2 mation on any change in the membership of the

3 venture not later than 90 days after such

4 change occurs.

5 (4) PUBLICATION OF NOTIFICATION.—

6 (A) INFORMATION MADE PUBLICLY AVAIL7 ABLE.—Not later than 30 days after receiving

8 a notification with respect to a venture under

9 paragraph (1), the Attorney General shall pub10 lish in the Federal Register a notice with re11 spect to the venture that identifies the parties

12 to the venture and generally describes the pur13 pose and planned activity of the venture. Prior

14 to its publication, the contents of the notice

15 shall be made available to the parties to the

16 venture.

17 (B) RESTRICTION ON DISCLOSURE OF

18 OTHER INFORMATION.—All information and

19 documentary material submitted pursuant to

20 this section and all information obtained by the

21 Attorney General in the course of any investiga22 tion or case with respect to a potential violation

23 of the antitrust laws by the health care coopera24 tive venture (other than information and mate25 rial described in subparagraph (A)) shall be ex-
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1 empt from disclosure under section 552 of title

2 5, United States Code, and shall not be made

3 publicly available by any agency of the United

4 States to which such section applies except in

5 a judicial proceeding in which such information

6 and material is subject to any protective order.

7 (5) WITHDRAWAL OF NOTIFICATION.—Any per8 son who files a notification pursuant to this section

9 may withdraw such notification before a publication

10 by the Attorney General pursuant to paragraph (4).

11 Any person who is deemed to have filed a notifica12 tion under paragraph (2)(A) shall be deemed to have

13 withdrawn the notification if the certificate of review

14 in question is revoked or withdrawn under section 5.

15 (6) NO JUDICIAL REVIEW PERMITTED.—Any

16 action taken or not taken by the Attorney General

17 with respect to notifications filed pursuant to this

18 subsection shall not be subject to judicial review.

19 (b) PROTECTIONS FOR VENTURES SUBJECT TO NO20 TIFICATION.—

21 (1) IN GENERAL.—

22 (A) PROTECTIONS DESCRIBED.—The pro23 visions of paragraphs (2), (3), (4), and (5) shall

24 apply with respect to any action under the anti25 trust laws challenging conduct within the scope
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1 of a notification which is in effect pursuant to

2 subsection (a)(1).

3 (B) TIMING OF PROTECTIONS.—The pro4 tections described in this subsection shall apply

5 to the venture that is the subject of a notifica6 tion under subsection (a)(1) as of the earlier

7 of—

8 (i) the date of the publication in the

9 Federal Register of the notice published

10 with respect to the notification; or

11 (ii) if such notice is not published dur12 ing the period required under subsection

13 (a)(4), the expiration of the 30-day period

14 that begins on the date the Attorney Gen15 eral receives any necessary information re16 quired to be submitted under subsection

17 (a)(1) or any additional information re18 quired by the Attorney General under sub19 section (a)(3)(A).

20 (2) APPLICABILITY OF RULE OF REASON

21 STANDARD.—In any action under the antitrust laws,

22 the conduct of any person which is within the scope

23 of a notification filed under subsection (a) shall not

24 be deemed illegal per se, but shall be judged on the

25 basis of its reasonableness, taking into account all
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1 relevant factors affecting competition, including, but

2 not limited to, effects on competition in relevant

3 markets.

4 (3) LIMITATION ON RECOVERY TO ACTUAL

5 DAMAGES AND INTEREST.—Notwithstanding section

6 4 of the Clayton Act, any person who is entitled to

7 recovery under the antitrust laws for conduct that is

8 within the scope of a notification filed under sub9 section (a) shall recover the actual damages sus10 tained by such person and interest calculated at the

11 rate specified in section 1961 of title 28, United

12 States Code, for the period beginning on the earliest

13 date for which injury can be established and ending

14 on the date of judgment, unless the court finds that

15 the award of all or part of such interest is unjust

16 under the circumstances.

17 (4) AWARD OF ATTORNEY’S FEES AND COSTS

18 OF SUIT.—

19 (A) IN GENERAL.—In any action under the

20 antitrust laws brought against a health care co21 operative venture for conduct that is within the

22 scope of a notification filed under subsection

23 (a), the court shall, at the conclusion of the ac24 tion—
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1 (i) award to a substantially prevailing

2 claimant the cost of suit attributable to

3 such claim, including a reasonable attor4 ney’s fee, or

5 (ii) award to a substantially prevailing

6 party defending against such claim the

7 cost of such suit attributable to such claim,

8 including reasonable attorney’s fee, if the

9 claim, or the claimant’s conduct during

10 litigation of the claim, was frivolous, un11 reasonable, without foundation, or in bad

12 faith.

13 (B) OFFSET IN CASES OF BAD FAITH.—

14 The court may reduce an award made pursuant

15 to subparagraph (A) in whole or in part by an

16 award in favor of another party for any part of

17 the cost of suit (including a reasonable attor18 ney’s fee) attributable to conduct during the

19 litigation by any prevailing party that the court

20 finds to be frivolous, unreasonable, without

21 foundation, or in bad faith.

22 (5) RESTRICTIONS ON ADMISSIBILITY OF IN23 FORMATION.—

24 (A) IN GENERAL.—Any information dis25 closed in a notification submitted under sub-
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1 section (a)(1) and the fact of the publication of

2 a notification by the Attorney General under

3 subsection (a)(4) shall only be admissible into

4 evidence in a judicial or administrative proceed5 ing for the sole purpose of establishing that a

6 party to a health care cooperative venture is en7 titled to the protections described in this sub8 section.

9 (B) ACTIONS OF ATTORNEY GENERAL.—

10 No action taken by the Attorney General pursu11 ant to this section shall be admissible into evi12 dence in any judicial or administrative proceed13 ing for the purpose of supporting or answering

14 any claim under the antitrust laws.

15 SEC. 7. REVIEW AND REPORTS ON SAFE HARBORS AND

16 CERTIFICATES OF REVIEW.

17 (a) IN GENERAL.—The Attorney General (in con18 sultation with the Secretary and the Chair) shall periodi19 cally review the safe harbors described in section 3, the

20 additional safe harbors designated under section 4, and

21 the certificates of review issued under section 5, and—

22 (1) with respect to the safe harbors described in

23 section 3, submit such recommendations to Congress

24 as the Attorney General considers appropriate for

25 modifications of such safe harbors;
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1 (2) with respect to the additional safe harbors

2 under designated under section 4, issue proposed re3 visions to such activities and publish the revisions in

4 the Federal Register; and

5 (3) with respect to the certificates of review,

6 submit a report to Congress on the issuance of such

7 certificates, and shall include in the report a descrip8 tion of the effect of such certificates on increasing

9 access to high quality health care services at reduced

10 costs.

11 (b) RECOMMENDATIONS FOR LEGISLATION.—The

12 Attorney General shall include in the reports submitted

13 under subsection (a)(3) any recommendations of the At14 torney General for legislation to improve the program for

15 the issuance of certificates of review established under this

16 title.

17 SEC. 8. RULES, REGULATIONS, AND GUIDELINES.

18 (a) SAFE HARBORS, CERTIFICATES, AND NOTIFICA19 TIONS.—The Attorney General, with the concurrence of

20 the Secretary, shall promulgate such rules, regulations,

21 and guidelines as are necessary to carry out sections 3,

22 4, 5, and 6, including guidelines relating to appropriate

23 geographic and product areas for health care services and

24 providers of health care services.

25 (b) GUIDANCE FOR PROVIDERS.—
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1 (1) IN GENERAL.—To promote greater cer2 tainty regarding the application of the antitrust laws

3 to activities in the health care market, the Attorney

4 General, in consultation with the Secretary and the

5 Chair, shall (not later than 1 year after the date of

6 the enactment of this Act), taking into account the

7 criteria used to designate additional safe harbors

8 under section 4 and grant certificates of review

9 under section 5, publish guidelines—

10 (A) to assist providers of health care serv11 ices in analyzing whether the activities of such

12 providers may be subject to a safe harbor under

13 sections 3 or 4; and

14 (B) describing specific types of activities

15 which would meet the requirements for a cer16 tificate of review under section 5, and summa17 rizing the factual and legal bases on which the

18 activities would meet the requirements.

19 (2) PERIODIC UPDATE.—The Attorney General

20 shall periodically update the guidelines published

21 under paragraph (1) as the Attorney General consid22 ers appropriate.

23 (3) WAIVER OF ADMINISTRATIVE PROCEDURE

24 ACT.—Section 553 of title 5, United States Code,
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1 shall not apply to the issuance of guidelines under

2 paragraph (1).

3 SEC. 9. ESTABLISHMENT OF HHS OFFICE OF HEALTH CARE

4 COMPETITION POLICY.

5 (a) IN GENERAL.—There is established within the

6 Department of Health and Human Services an Office to

7 be known as the Office of Health Care Competition Policy

8 (hereafter in this section referred to as the ‘‘Office’’). The

9 Office shall be headed by a director, who shall be ap10 pointed by the Secretary.

11 (b) DUTIES.—The Office shall coordinate the respon12 sibilities of the Secretary under this Act and otherwise as13 sist the Secretary in developing policies relating to the

14 competitive and collaborative activities of providers of

15 health care services.

16 SEC. 10. DEFINITIONS.

17 In this Act, the following definitions shall apply:

18 (1) The term ‘‘antitrust laws’’—

19 (A) has the meaning given it in subsection

20 (a) of the first section of the Clayton Act (15

21 U.S.C. 12(a)), except that such term includes

22 section 5 of the Federal Trade Commission Act

23 (15 U.S.C. 45) to the extent such section ap24 plies to unfair methods of competition; and
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1 (B) includes any State law similar to the

2 laws referred to in subparagraph (A).

3 (2) The term ‘‘Chair’’ means the Chair of the

4 Federal Trade Commission.

5 (3) The term ‘‘health benefit plan’’ means any

6 hospital or medical expense incurred policy or certifi7 cate, hospital or medical service plan contract, or

8 health maintenance subscriber contract, or a mul9 tiple employer welfare arrangement or employee ben10 efit plan (as defined under the Employee Retirement

11 Income Security Act of 1974) which provides bene12 fits with respect to health care services.

13 (4) The term ‘‘health care cooperative venture’’

14 means any activities, including attempts to enter

15 into or perform a contract or agreement, carried out

16 by 2 or more persons for the purpose of providing

17 health care services.

18 (5) The term ‘‘health care services’’ means any

19 services for which payment may be made under a

20 health benefit plan, including services related to the

21 delivery or administration of such services.

22 (6) The term ‘‘medical self-regulatory entity’’

23 means a medical society or association, a specialty

24 board, a recognized accrediting agency, or a hospital

25 medical staff, and includes the members, officers,
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1 employees, consultants, and volunteers or commit2 tees of such an entity.

3 (7) The term ‘‘person’’ includes a State or unit

4 of local government.

5 (8) The term ‘‘provider of health care services’’

6 means any individual or entity that is engaged in the

7 delivery of health care services in a State and that

8 is required by State law or regulation to be licensed

9 or certified by the State to engage in the delivery of

10 such services in the State.

11 (9) The term ‘‘Secretary’’ means the Secretary

12 of Health and Human Services.

13 (10) The term ‘‘specialty group’’ means a medi14 cal specialty or subspecialty in which a provider of

15 health care services may be licensed to practice by

16 a State (as determined by the Secretary in consulta17 tion with the certification boards for such specialties

18 and subspecialties).

19 (11) The term ‘‘standard setting and enforce20 ment activities’’ means—

21 (A) accreditation of health care practition22 ers, health care providers, medical education in23 stitutions, or medical education programs,

24 (B) technology assessment and risk man25 agement activities,
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1 (C) the development and implementation of

2 practice guidelines or practice parameters, or

3 (D) official peer review proceedings under4 taken by a hospital medical staff (or committee

5 thereof) or a medical society or association for

6 purposes of evaluating the professional conduct

7 or quality of health care provided by a medical

8 professional.

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