[Federal Register Volume 80, Number 21 (Monday, February 2, 2015)]
[Notices]
[Pages 5533-5537]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-01856]


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FEDERAL TRADE COMMISSION


Announcement of Public Workshop, ``Examining Health Care 
Competition''

AGENCY: Federal Trade Commission.

ACTION: Notice of public workshop and opportunity for comment.

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SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'') will 
hold a second public workshop on February 24-25, 2015, as part of the 
workshop series, ``Examining Health Care Competition,'' \1\ to study 
recent developments related to health care provider organization and 
payment models that may affect competition and consumer protection in 
the provision of health care services. The workshop will be co-hosted 
by the Department of Justice, Antitrust Division (``DOJ''). Specific 
topics for discussion may include: early observations regarding 
accountable care organizations; alternatives to traditional fee-for-
service payment models; trends in provider consolidation; trends in 
provider network and benefit design strategies, as well as contracting 
practices and regulatory activity that may enhance or undermine these 
strategies; and early observations regarding health insurance 
exchanges. This notice invites public comments on a series of topics. 
The FTC and DOJ (the ``Agencies'') will consider these comments as they 
prepare for the workshop and may use them in subsequent reports or 
policy papers, if any. For additional information, visit the workshop 
Web site at http://www.ftc.gov/news-events/events-calendar/2015/02/examining-health-care-competition or http://www.justice.gov/atr/public/workshops/healthcare/2015/02/index.html.
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    \1\ The first workshop in the Examining Health Care Competition 
series was held on March 20-21, 2014, and examined issues concerning 
occupational regulation, interstate licensure and telehealth, health 
information technology, and price and quality transparency. See 
http://www.ftc.gov/news-events/events-calendar/2014/03/examining-health-care-competition.

DATES: The workshop will be held on February 24-25, 2015, in the 
Auditorium of the Constitution Center at 400 7th Street SW., 
Washington, DC 20024. To be considered for the workshop, comments in 
response to this notice should be submitted by February 16, 2015. In 
addition, any interested person may submit written comments in response 
to this notice and workshop discussions until April 30, 2015. Prior to 
the workshop, the Agencies will publish an agenda and additional 
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information on their Web sites.

ADDRESSES: Interested parties may file a comment for this workshop at 
https://ftcpublic.commentworks.com/ftc/examhealthcareworkshop online or 
on paper, by following the instructions in the Request for Comment part 
of the SUPPLEMENTARY INFORMATION section below. Write ``Health Care 
Workshop, Project No. P131207,'' on your comment, and file your comment 
online at https://ftcpublic.commentworks.com/ftc/examhealthcareworkshop 
by following the instructions on the web-based form. If you prefer to 
file your comment on paper, write ``Health Care Workshop, Project No. 
P131207,'' on your comment, and on the envelope, and mail your comment 
to the following address: Federal Trade Commission, Office of the 
Secretary, 600 Pennsylvania Avenue NW., Suite CC-5610 (Annex X), 
Washington, DC 20580, or deliver your comment to the following address: 
Federal Trade Commission, Office of the Secretary, Constitution Center, 
400 7th Street SW., 5th Floor, Suite 5610 (Annex X), Washington, DC 
20024.

FOR FURTHER INFORMATION CONTACT: Stephanie Wilkinson, Attorney Advisor, 
Office of Policy Planning, Federal Trade Commission, 600 Pennsylvania 
Avenue NW., Washington, DC 20580, 202-326-2084, 
<a href="/cdn-cgi/l/email-protection#e7829f868a8e898e89808f82868b938f848695829088958c948f8897a7819384c9808891"><span class="__cf_email__" data-cfemail="ff9a879e929691969198979a9e938b979c9e8d9a88908d948c97908fbf998b9cd1989089">[email protected]</span></a>. For more detailed information 
about the workshop, including an agenda, please visit the workshop Web 
site: http://www.ftc.gov/news-events/events-calendar/2015/02/examining-health-care-competition or http://www.

[[Page 5534]]

justice.gov/atr/public/workshops/healthcare/2015/02/index.html.

SUPPLEMENTARY INFORMATION: The Federal Trade Commission and U.S. 
Department of Justice seek to better understand the competitive 
dynamics and effects of evolving health care provider and payment 
models. In recent years, changes in the way that health care services 
and products are delivered and reimbursed have been occurring in 
response to diverse market trends, including pressure to reduce costs 
and improve quality in the health care industry. The Patient Protection 
and Affordable Care Act (``ACA'') may have accelerated many of these 
changes. Providers are increasingly seeking ways to improve the 
coordination of health care services to patients. Meanwhile, payers are 
seeking ways to incentivize providers to practice more efficient, 
outcomes-based medicine and to avoid the overutilization of services 
and products. This workshop and comment process are expected to 
identify and examine strategies currently used by providers and payers 
seeking to reduce costs and improve quality, with a particular emphasis 
on the strategies' potential implications for competition and consumer 
protection. Information obtained during this workshop and through 
comments will enrich the Agencies' knowledge in this critical sector of 
the economy and thereby support their enforcement, advocacy, and 
consumer education efforts.
    This Notice invites comments on a number of topics, including:
    <bullet> The kinds of changes occurring with respect to health care 
provider organization and payment models;
    <bullet> the economic, quality enhancing, technological, 
regulatory, and legislative factors that may be influencing such 
changes; and
    <bullet> additional empirical research that would be helpful in 
evaluating these topics.

The Agencies are particularly interested in receiving comments on the 
specific topics discussed below, and this Notice includes questions as 
examples of the types of information that are likely to be helpful. 
Commenters should feel neither compelled to answer each question nor 
constrained by the questions listed.

1. Early Observations of Accountable Care Organizations

    Accountable care organizations (``ACOs'') are networks formed by 
physicians, hospitals, and other health care providers to coordinate 
patient care. Although the term ACO is used to describe a wide range of 
provider collaboration, ACO members typically share clinical and 
financial responsibilities for designated patient populations, and are 
held accountable for the quality, appropriateness, and efficiency of 
the health care services they provide. ACOs can be structured to serve 
commercial patient populations, Medicare or Medicaid patient 
populations, or a combination of patient populations.
    Some health policy experts and economists have raised concerns that 
ACOs might increase the ability of providers to obtain and exercise 
market power. For example, providers participating in ACOs may be able 
to exercise market power through collective negotiations with payers. 
Furthermore, in preparing to form ACOs, some providers argue that they 
need to consolidate through merger, claiming that increased scale and 
resources will better position them to achieve positive results as an 
ACO. However, this may lead to more concentrated provider markets.
    In 2011, the FTC and DOJ issued a joint statement regarding the 
antitrust enforcement policy that would be applied to ACOs 
participating in the Medicare Shared Savings Program.\2\ Since that 
time, the Agencies have continued to monitor developments within the 
Medicare ACO programs, not only to enhance their understanding of these 
programs, but also to assess how they may impact the formation and 
operation of ACOs in commercial markets. For example, some health 
policy experts have observed that the Medicare ACO programs may 
encourage the development of ACOs that operate in commercial markets. 
Also, some have warned about the potential for cost-shifting from 
Medicare ACOs to commercial ACOs, which could result in higher prices 
for commercial patients.
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    \2\ See FTC-DOJ Statement of Antitrust Enforcement Policy 
Regarding Accountable Care Organizations Participating in the 
Medicare Shared Savings Program, 60 FR 67,026 (Oct. 28, 2011), 
available at http://www.gpo.gov/fdsys/pkg/FR-2011-10-28/pdf/2011-27944.pdf.
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    Comments regarding early observations of ACOs might address the 
following types of questions:
    <bullet> How are ACOs defined, and what are some of the challenges 
associated with clearly defining an ACO?
    <bullet> How do ACOs operate? Are ACOs an effective mechanism for 
aligning the clinical and financial incentives of providers, payers, 
and patients?
    <bullet> What strategies do ACOs use when trying to achieve the 
goals of reducing costs, improving quality, and increasing patient 
satisfaction?
    <bullet> What are some similarities and differences between ACOs 
and patient-centered medical homes? Are there potential benefits to 
using these provider models in combination with each other?
    <bullet> What preliminary observations can be made regarding the 
success or failure of ACOs that operate in Medicare, Medicaid, or 
commercial markets?
    [cir] Is there any evidence of efficiencies, cost savings, or 
quality improvements?
    <bullet> What preliminary observations can be made regarding the 
competitive impact of ACOs, particularly in commercial markets?
    [cir] Is there any evidence of cost reductions or quality 
improvements as a result of increased competition among providers 
participating in ACOs?
    [cir] What spill-over effects, if any, have been observed between 
Medicare and commercial ACOs, both positive and negative?
    [cir] Is there any evidence to suggest that ACO formation has been 
a mechanism for competing or non-competing providers to achieve and 
exercise market power?
    <bullet> What impact, if any, has ACO formation had on patient 
referral patterns?
    <bullet> Has the FTC-DOJ joint policy statement provided helpful 
guidance to market participants?

2. Alternatives to Traditional Fee-for-Service Payment Models

    Traditional fee-for-service payment models reimburse health care 
providers for services rendered. Some have argued that traditional fee-
for-service payment models have contributed to the high cost of health 
care in the United States because these models may create incentives to 
maximize the volume of health care services provided. In recent years, 
various health policy experts, providers, and payers have emphasized 
the importance of shifting away from traditional fee-for-service 
payment models toward alternative payment models that seek to use 
performance indicators and patient outcomes to reward higher quality 
and more efficient use of medical services.
    Comments regarding alternatives to traditional fee-for-service 
payment models might address the following types of questions:
    <bullet> What are the alternatives to traditional fee-for-service 
payment models, including either reforms to fee-for-service (e.g., 
maintaining a fee-for-service model and adding bonus incentives for 
achieving certain cost and/or quality benchmarks) or replacing fee-for-
service with some type of prospective payment approach (e.g., global 
payment, bundled payment,

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partial capitation)? How are these terms defined?
    [cir] Who bears the financial risk in each model?
    [cir] How are prices established in each model? Is competition a 
significant factor in establishing prices for these models?
    <bullet> How does the use of alternative payment models affect the 
incentives of payers, providers, and patients? How does this differ 
from the incentives created by traditional fee-for-service payment 
models?
    <bullet> What are the challenges of transitioning from traditional 
fee-for-service to an alternative payment model?
    <bullet> What are the economic, quality, legal, or regulatory 
factors influencing this shift away from traditional fee-for-service 
reimbursement?
    <bullet> What impact, if any, do alternative reimbursement methods 
have on efficient forms of provider organization?
    <bullet> Is there a relationship between the size and scale of a 
provider organization and its capacity to bear financial risk? What 
size and scale is sufficient for a provider organization to participate 
in existing or future risk-bearing programs?
    <bullet> What are the competitive implications of this shift away 
from traditional fee-for-service reimbursement?
    <bullet> Is there any evidence that alternative payment models 
increase competition among providers?
    <bullet> Is there any evidence that alternative payment models 
improve coordination and quality of care or reduce costs?
    <bullet> Is there any evidence of alternative payment models 
leading to restrictions on the availability of, or patient use of, 
essential health care services?

3. Trends in Provider Consolidation

    Over the last two decades, there has been significant consolidation 
among health care providers, particularly among hospitals. Some 
economists and health policy experts point to this consolidation as a 
contributor to the rise in health care costs in the United States. The 
Agencies have a long history of analyzing this consolidation and 
bringing enforcement actions against specific mergers and acquisitions 
when they believe an antitrust violation has occurred. Since the 
passage of the ACA, some providers have argued that further 
consolidation is necessary to achieve quality improvements and cost 
reductions through more efficient health care delivery systems. The 
Agencies have long observed that in many cases providers may achieve 
these benefits through various forms of collaboration rather than 
consolidation.
    Comments regarding trends in provider consolidation might address 
the following types of questions:

a. Hospital-Physician Practice Consolidation

    <bullet> What economic, quality, legal, or regulatory factors may 
be influencing consolidation between hospitals and physician practices?
    <bullet> What factors should be considered when analyzing the 
competitive effects of mergers of complementary service providers?
    <bullet> What evidence exists regarding the competitive effects of 
these arrangements, both positive and negative?
    <bullet> What does evidence show regarding physician service fees 
and facility charges following the acquisition of physician practices 
by hospitals?
    <bullet> Is there any evidence that merged hospital systems and 
physician practices have more bargaining power than they would have 
independently, thereby allowing them to negotiate higher reimbursement 
rates or otherwise increase prices?
    <bullet> What does evidence demonstrate about the quality of health 
care services following the acquisition of physician practices by 
hospitals?
    <bullet> Is there any evidence demonstrating that common ownership 
(e.g., hospitals employing physicians or acquiring physician practices) 
produces better quality or cost outcomes than other forms of 
collaboration (e.g., physicians of different specialties forming 
organizations that are not owned by hospitals, or virtual networks of 
physicians)?

b. ``Cross-Market'' Hospital Mergers

    <bullet> Is there theory or evidence that mergers between hospitals 
that operate in different geographic or service markets may increase 
the combined entity's ability to negotiate higher reimbursement rates 
with health plans?
    <bullet> If such mergers can lead to anticompetitive effects, what 
kinds of evidence and economic analysis would help to identify such 
effects?
    <bullet> If traditional antitrust analysis of relevant product and 
geographic markets does not adequately identify anticompetitive harm in 
these situations, what other factors, if any, may help identify such 
harm?

c. Provider-Payer Consolidation

    <bullet> What are the recent trends and some examples of providers 
and payers that have consolidated, or otherwise partnered, to offer 
integrated health care services and insurance plans to consumers?
    <bullet> What are the competitive implications of such 
consolidation in both payer and provider markets?
    [cir] Does this type of consolidation increase the incentives for 
exclusionary conduct or otherwise facilitate the exercise of market 
power? If so, under what circumstances?
    [cir] Does this type of consolidation affect incentives to 
coordinate and improve the quality of health care, as well as reduce 
costs?
    [cir] Does this type of consolidation increase competition in 
health insurance markets, by allowing providers to compete with payers?

4. Provider Network and Benefit Design

    There are many ways for health plans to design provider networks 
and benefits packages for consumers, which range from individuals 
purchasing health insurance to large national employers contracting for 
health insurance coverage for their employees. Recent developments 
include strategies that limit the number of providers in a network. 
Certain contracting practices or regulatory activity may potentially 
enhance or undermine the use of these strategies to spur competition 
among providers and reduce health care costs.
    Comments regarding provider network and benefit design might 
address the following types of questions:
    <bullet> What types of provider network and benefit design 
strategies have been implemented recently or are under consideration?
    <bullet> What are the competitive effects of network design 
strategies that limit the number of providers in a network (e.g., 
narrow networks, tiered networks, reference pricing, etc.)?
    [cir] Can these strategies lead to cost reductions or improved 
coordination and quality of care?
    [cir] Are there circumstances under which they might create or 
facilitate the exercise of market power, or otherwise be 
anticompetitive?
    <bullet> What is the relationship between market structure and 
network and benefit design?
    [cir] Is robust provider competition a predicate for successful 
implementation of any of these designs?
    [cir] Does concentration in health insurance markets impact 
provider network and benefit design strategies?
    [cir] To what extent might some network and benefit designs enhance 
competition, even when provider or payer markets are highly 
concentrated?
    <bullet> What types of provider-payer contracting practices may 
limit the

[[Page 5536]]

implementation of these types of network design strategies (e.g., anti-
tiering/anti-steering provisions, gag clauses, all-or-nothing 
contracting, and most-favored nation provisions)?
    [cir] How prevalent are these contracting practices and which 
parties seek to include them?
    [cir] What are the procompetitive rationales for adopting these 
provisions, and what are their potential anticompetitive effects?
    [cir] To what extent might these practices affect incentives for 
innovation in health plan pricing models?
    <bullet> What types of regulatory or legislative interventions may 
enhance or undermine innovative network and benefit design strategies 
(e.g., essential benefits and network adequacy requirements, any 
willing provider legislation, price transparency legislation, or 
prohibitions on certain provider-payer contracting practices)?

5. Early Observations of Health Insurance Exchanges

    Most Americans receive health insurance through their employers. As 
a result of the ACA, individuals without employer-sponsored coverage 
can now purchase health insurance on public exchanges. Small group 
employers also can utilize public exchanges to make coverage available 
to their employees. In addition to public exchanges, private exchanges 
created by private sector companies, such as health insurance companies 
or consulting firms, also are emerging.
    Comments regarding early observations of health insurance exchanges 
might address the following types of questions:
    <bullet> How many and what types of plans are being offered on the 
exchanges?
    <bullet> Who is buying on the exchanges and what types of plans are 
they choosing?
    [cir] Have actuarial values and other information created greater 
transparency and helped consumers make meaningful decisions about the 
health plans that they purchase?
    [cir] What does evidence demonstrate about the use of narrow 
provider networks in the exchange plan offerings?
    <bullet> How do the state-based exchanges differ from the federally 
facilitated exchanges?
    <bullet> How have the exchanges and related regulatory developments 
impacted competition in health insurance markets?
    [cir] Have the exchanges had any impact on the pricing of health 
insurance plans?
    [cir] Has there been entry or exit from the individual health 
insurance market as a result of the exchanges?
    [cir] Have incumbent health insurers offered new types of products 
or lowered their prices in response to competition from the exchanges?
    [cir] What has been the competitive impact of the multistate plans 
and cooperatives?
    [cir] Have there been any discernible changes to concentration 
levels in health insurance markets since the exchanges were introduced?
    [cir] Have requirements like minimum benefits, medical loss ratios, 
and guaranteed issue affected competition among health insurers?
    <bullet> How do the exchanges impact antitrust enforcement?
    [cir] Is there potential for anticompetitive practices that may 
undermine competition on the exchanges?
    <bullet> What are the recent trends in health insurance markets 
(e.g., increased use of private exchanges, increasing self-insurance by 
employers, employers migrating employees to public or private 
exchanges, increased small-employer coverage)?
    You can file a comment online or on paper. To be considered for the 
workshop, comments in response to this notice should be submitted by 
February 16, 2015. In addition, any interested person may submit 
written comments in response to this notice and workshop discussions 
until April 30, 2015. Comments should refer to ``Health Care Workshop, 
Project No. P131207.'' Comments filed in electronic form should be 
submitted using the following web link: https://ftcpublic.commentworks.com/ftc/examhealthcareworkshop and by following 
the instructions on the web-based form. If this notice appears at 
http://www.regulations.gov, you may also file an electronic comment 
through that Web site. The Agencies will consider all comments that 
regulations.gov forwards to them.
    A comment filed in paper form should include the ``Health Care 
Workshop, Project No. P131207'' reference both in the text and on the 
envelope, and should be mailed to the following address: Federal Trade 
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite 
CC-5610 (Annex X), Washington, DC 20580, or delivered to the following 
address: Federal Trade Commission, Office of the Secretary, 400 7th 
Street SW., 5th Floor, Suite 5610 (Annex X), Washington, DC 20024. If 
possible, submit your paper comment to the Commission by courier or 
overnight service.
    Please note that your comment--including your name and state--will 
be placed on the public record of this proceeding, including on the 
publicly accessible FTC and DOJ Web sites, at http://www.ftc.gov/os/publiccomments.shtm and http://www.justice.gov/atr/public/workshops/healthcare/2015/02/index.html. As a matter of discretion, the 
Commission tries to remove individuals' home contact information from 
comments before placing them on the Commission's Web site.
    Because comments will be made public, you are solely responsible 
for making sure that your comment does 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. You are also solely 
responsible for making sure that your comment does not include any 
sensitive health information, such as medical records or other 
individually identifiable health information. In addition, comments 
should not include ``trade secret or any commercial or financial 
information which . . . is privileged or confidential,'' as discussed 
in Section 6(f) of the Federal Trade Commission Act (``FTC Act''), 15 
U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). In 
particular, do not include competitively sensitive information such as 
costs, sales statistics, inventories, formulas, patterns, devices, 
manufacturing processes, or customer names.
    Comments containing material for which confidential treatment is 
requested must be filed in paper form, must be clearly labeled 
``Confidential,'' and must comply with FTC Rule 4.9(c), 16 CFR 4.9(c). 
For any copyrighted material, please provide authorization (signed by 
the publisher or author if they retain the copyright) so that the 
material may be republished on the Agencies' Web sites.
    The FTC Act and other laws that the Commission administers permit 
the collection of public comments to consider and use in this 
proceeding as appropriate. The Commission will consider all timely and 
responsive public comments that it receives, whether filed in paper or 
electronic form. More information, including routine uses permitted by 
the Privacy Act, may be found in the FTC's privacy policy, available at 
http://www.ftc.gov/ftc/privacy.htm.


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    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2015-01856 Filed 1-27-15; 8:45 am]
BILLING CODE 6750-01-P


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