II

103D CONGRESS

1ST SESSION S. 1658

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 SENATE OF THE UNITED STATES

NOVEMBER 10 (legislative day, NOVEMBER 2), 1993

Mr. HATCH (for himself and Mr. THURMOND) introduced the following bill;

which was read twice and referred to the Committee on the Judiciary

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’’.
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1 SEC. 2. EXEMPTION FROM ANTITRUST LAWS FOR CERTAIN

2 COMPETITIVE AND COLLABORATIVE ACTIVI3 TIES.

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

5 the provision of health care services shall be exempt from

6 the antitrust laws if—

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

8 of safe harbors described in section 3;

9 (2) the activity is within an additional safe har10 bor designated by the Attorney General under sec11 tion 4; or

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

13 with the terms of a certificate of review issued by

14 the Attorney General under section 5 and the activ15 ity occurs—

16 (A) while the certificate is in effect, or

17 (B) in the case of a certificate issued dur18 ing the 2-year period beginning on the date of

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

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

21 ends on the date the certificate takes effect.

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

23 SUIT.—

24 (1) IN GENERAL.—If any person brings an ac25 tion alleging a claim under the antitrust laws and

26 the activity on which the claim is based is found by
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1 the court to be exempt from such laws under sub2 section (a), the court shall, at the conclusion of the

3 action—

4 (A) award to a substantially prevailing

5 claimant the cost of suit attributable to such

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

7 (B) award to a substantially prevailing

8 party defending against such claim the cost of

9 such suit attributable to such claim, including

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

11 claimant’s conduct during litigation of the

12 claim, was frivolous, unreasonable, without

13 foundation, or in bad faith.

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

15 court may reduce an award made pursuant to para16 graph (1) in whole or in part by an award in favor

17 of another party for any part of the cost of suit (in18 cluding a reasonable attorney’s fee) attributable to

19 conduct during the litigation by any prevailing party

20 that the court finds to be frivolous, unreasonable,

21 without foundation, or in bad faith.

22 SEC. 3. SAFE HARBORS.

23 The following activities are safe harbors for purposes

24 of section 2(a)(1):
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1 (1) COMBINATIONS WITH MARKET SHARE

2 BELOW THRESHOLD.—Activities relating to health

3 care services of any combination of health care pro4 viders if the number of each type or specialty of pro5 vider in question does not exceed 20 percent of the

6 total number of such type or specialty of provider in

7 the relevant market area.

8 (2) ACTIVITIES OF MEDICAL SELF-REGULATORY

9 ENTITIES.—

10 (A) IN GENERAL.—Subject to subpara11 graph (B), any activity of a medical self-regu12 latory entity relating to standard setting or

13 standard enforcement activities that are de14 signed to promote the quality of health care

15 provided to patients.

16 (B) EXCEPTION.—No activity of a medical

17 self-regulatory entity may be deemed to fall

18 under the safe harbor established under this

19 paragraph if the activity is conducted for pur20 poses of financial gain.

21 (3) PARTICIPATION IN SURVEYS.—The partici22 pation of a provider of health care services in a writ23 ten survey of the prices of services, reimbursement

24 levels, or the compensation and benefits of employ25 ees and personnel, but only if—
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1 (A) the survey is conducted by a third

2 party, such as a purchaser of health care serv3 ices, governmental entity, institution of higher

4 education, or trade association;

5 (B) the information provided by partici6 pants in the survey is based on prices charged,

7 reimbursements received, or compensation and

8 benefits paid prior to the third month preceding

9 the month in which the information is provided;

10 and

11 (C) if the results of the survey are dissemi12 nated, the results are aggregated in a manner

13 that ensures that no recipient of the results

14 may identify the prices charged, reimbursement

15 received, or compensation and benefits paid by

16 any particular provider.

17 (4) JOINT VENTURES FOR HIGH TECHNOLOGY

18 AND COSTLY EQUIPMENT AND SERVICES.—Any ac19 tivity of a health care cooperative venture relating to

20 the purchase, operation, or marketing of high tech21 nology or other expensive medical equipment, or the

22 provision of high cost or complex services, but only

23 if the number of participants in the venture does not

24 exceed the lowest number needed to support the ven25 ture. Other providers may be included in the ven-
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1 ture, but only if such other providers could not pur2 chase, operate, or market such equipment or provide

3 a competing service either alone or through the for4 mation of a competing venture.

5 (5) HOSPITAL MERGERS.—Activities relating to

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

7 preceding the merger, one of the hospitals had an

8 average of 150 or fewer operational beds and an av9 erage daily inpatient census of less than 50 percent

10 of such beds.

11 (6) JOINT PURCHASING ARRANGEMENTS.—Any

12 joint purchasing arrangement among health care

13 providers if—

14 (A) the purchases under the arrangement

15 represent less than 35 percent of the total sales

16 of the product or service purchased in the rel17 evant market; and

18 (B) the cost of the products and services

19 purchased jointly accounts for less than 20 per20 cent of the total revenues from all products or

21 services sold by each participant in the joint

22 purchasing arrangement.

23 (7) NEGOTIATIONS.—Activities consisting of

24 good faith negotiations to carry out any activity—

25 (A) described in this section,
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1 (B) within an additional safe harbor des2 ignated by the Attorney General under section

3 4,

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

5 a certificate of review under section 5, or

6 (D) that is deemed a submission of a noti7 fication under section 6(a)(2)(B),

8 without regard to whether such an activity is carried

9 out.

10 SEC. 4. DESIGNATION OF ADDITIONAL SAFE HARBORS.

11 (a) IN GENERAL.—

12 (1) SOLICITATION OF PROPOSALS.—Not later

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

14 Act, the Attorney General shall publish a notice in

15 the Federal Register soliciting proposals for addi16 tional safe harbors.

17 (2) REVIEW AND REPORT ON PROPOSED SAFE

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

19 of the enactment of this Act, the Attorney General

20 (in consultation with the Secretary of Health and

21 Human Services and the Chair of the Federal Trade

22 Commission) shall—

23 (A) review the proposed safe harbors sub24 mitted under paragraph (1); and
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1 (B) submit a report to Congress describing

2 the proposals to be included in the publication

3 of additional safe harbors described in para4 graph (3) and the proposals that are not to be

5 so included, together with explanations there6 fore.

7 (3) PUBLICATION OF ADDITIONAL SAFE HAR8 BORS.—Not later than 180 days after the date of

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

10 consultation with the Secretary of Health and

11 Human Services and the Chair of the Federal Trade

12 Commission) shall publish in the Federal Register

13 proposed additional safe harbors for purposes of sec14 tion 2(a)(2) for providers of health care services.

15 Not later than 180 days after publishing such pro16 posed safe harbors in the Federal Register, the At17 torney General shall issue final rules establishing

18 such safe harbors.

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

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

21 shall take into account the following:

22 (1) The extent to which a competitive or col23 laborative activity will accomplish any of the follow24 ing:
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1 (A) An increase in access to health care

2 services.

3 (B) The enhancement of the quality of

4 health care services.

5 (C) The establishment of cost efficiencies

6 that will be passed on to consumers, including

7 economies of scale and reduced transaction and

8 administrative costs.

9 (D) An increase in the ability of health

10 care facilities to provide services in medically

11 underserved areas or to medically underserved

12 populations.

13 (E) An improvement in the utilization of

14 health care resources or the reduction in the in15 efficient duplication of the use of such re16 sources.

17 (2) Whether the designation of an activity as a

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

19 following outcomes:

20 (A) Health plans and other health care in21 surers, consumers of health care services, and

22 health care providers will be better able to ne23 gotiate payment and service arrangements

24 which will reduce costs to consumers.
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1 (B) Taking into consideration the charac2 teristics of the particular purchasers and pro3 viders involved, competition will not be unduly

4 restricted.

5 (C) Equally efficient and less restrictive al6 ternatives do not exist to meet the criteria de7 scribed in paragraph (1).

8 (D) The activity will not unreasonably

9 foreclose competition by denying competitors a

10 necessary element of competition.

11 SEC. 5. CERTIFICATES OF REVIEW.

12 (a) ESTABLISHMENT OF PROGRAM.—In consultation

13 with the Secretary and the Chair, the Attorney General

14 shall (not later than 180 days after the date of the enact15 ment of this Act) issue certificates of review in accordance

16 with this section for providers of health care services and

17 advise and assist any person with respect to applying for

18 such a certificate of review.

19 (b) PROCEDURES FOR APPLICATION FOR CERTIFI20 CATE.—

21 (1) FORM; CONTENT.—To apply for a certifi22 cate of review, a person shall submit to the Attorney

23 General a written application which—

24 (A) specifies the activities relating to the

25 provision of health care services which satisfy
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1 the criteria described in section 4(b) and which

2 will be included in the certificate; and

3 (B) is in a form and contains any informa4 tion, including information pertaining to the

5 overall market in which the applicant operates,

6 required by rule or regulation promulgated

7 under section 8.

8 (2) PUBLICATION OF NOTICE IN FEDERAL REG9 ISTER.—Within 10 days after an application submit10 ted under paragraph (1) is received by the Attorney

11 General, the Attorney General shall publish in the

12 Federal Register a notice that announces that an

13 application for a certificate of review has been sub14 mitted, identifies each person submitting the appli15 cation, and describes the conduct for which the ap16 plication is submitted.

17 (3) ESTABLISHMENT OF PROCEDURES FOR IS18 SUANCE OF CERTIFICATE.—In consultation with the

19 Chair and the Secretary, the Attorney General shall

20 establish procedures to be used in applying for and

21 in determining whether to approve an application for

22 a certificate of review under this title. Under such

23 procedures the Attorney General shall approve an

24 application if the Attorney General determines that

25 the activities to be covered under the certificate will
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1 satisfy the criteria described in section 4(b) for addi2 tional safe harbors designated under such section

3 and that the benefits of the issuance of the certifi4 cate will outweigh any disadvantages that may result

5 from reduced competition.

6 (4) TIMING FOR DECISION ON APPLICATION.—

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

8 the Attorney General receives an application for

9 a certificate of review, the Attorney General

10 shall determine whether the applicant’s health

11 care market activities are in accordance with

12 the procedures described in paragraph (3). If

13 the Attorney General, with the concurrence of

14 the Secretary, determines that such procedures

15 are met, the Attorney General shall issue to the

16 applicant a certificate of review. The certificate

17 of review shall specify—

18 (i) the health care market activities to

19 which the certificate applies,

20 (ii) the person to whom the certificate

21 of review is issued, and

22 (iii) any terms and conditions the At23 torney General or the Secretary deems nec24 essary to assure compliance with the appli-
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1 cable procedures described in paragraph

2 (3).

3 (B) APPLICATIONS DEEMED APPROVED.—

4 If the Attorney General does not reject an ap5 plication before the expiration of the 90-day pe6 riod beginning on the date the Attorney General

7 receives the application, the Attorney General

8 shall be deemed to have approved the applica9 tion and to have issued a certificate of review

10 relating to the applicant’s health care market

11 activities covered under the application.

12 (5) EXPEDITED ACTION.—If the applicant indi13 cates a special need for prompt disposition, the At14 torney General and the Secretary may expedite ac15 tion on the application, except that no certificate of

16 review may be issued within 30 days of publication

17 of notice in the Federal Register under subsection

18 (b)(2).

19 (6) ACTIONS UPON DENIAL.—

20 (A) NOTIFICATION.—If the Attorney Gen21 eral denies in whole or in part an application

22 for a certificate, the Attorney General shall no23 tify the applicant of the Attorney General’s de24 termination and the reasons for it.
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1 (B) REQUEST FOR RECONSIDERATION.—

2 An applicant may, within 30 days of receipt of

3 notification that the application has been denied

4 in whole or in part, request the Attorney Gen5 eral to reconsider the determination. The Attor6 ney General, with the concurrence of the Sec7 retary, shall notify the applicant of the deter8 mination upon reconsideration within 30 days

9 of receipt of the request.

10 (C) RETURN OF DOCUMENTS.—If the At11 torney General denies an application for the is12 suance of a certificate of review and thereafter

13 receives from the applicant a request for the re14 turn of documents submitted by the applicant

15 in connection with the application for the cer16 tificate, the Attorney General and the Secretary

17 shall return to the applicant, not later than 30

18 days after receipt of the request, the documents

19 and all copies of the documents available to the

20 Attorney General and the Secretary, except to

21 the extent that the information has been made

22 public under an exception to the rule against

23 public disclosure described in subsection

24 (g)(2)(B).
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1 (7) FRAUDULENT PROCUREMENT.—A certifi2 cate of review shall be void ab initio with respect to

3 any health care market activities for which the cer4 tificate was procured by fraud.

5 (c) AMENDMENT AND REVOCATION OF CERTIFI6 CATES.—

7 (1) NOTIFICATION OF CHANGES.—Any appli8 cant who receives a certificate of review—

9 (A) shall promptly report to the Attorney

10 General any change relevant to the matters

11 specified in the certificate; and

12 (B) may submit to the Attorney General

13 an application to amend the certificate to re14 flect the effect of the change on the conduct

15 specified in the certificate.

16 (2) AMENDMENT TO CERTIFICATE.—An appli17 cation for an amendment to a certificate of review

18 shall be treated as an application for the issuance of

19 a certificate. The effective date of an amendment

20 shall be the date on which the application for the

21 amendment is submitted to the Attorney General.

22 (3) REVOCATION.—

23 (A) GROUNDS FOR REVOCATION.—In ac24 cordance with this paragraph, the Attorney

25 General may revoke in whole or in part a cer-
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1 tificate of review issued under this section. The

2 following shall be considered grounds for the

3 revocation of a certificate:

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

5 period beginning on the date a person’s

6 certificate is issued, the activities of the

7 person have not substantially accomplished

8 the purposes for the issuance of the certifi9 cate.

10 (ii) The person has failed to comply

11 with any of the terms or conditions im12 posed under the certificate by the Attorney

13 General or the Secretary under subsection

14 (b)(4).

15 (iii) The activities covered under the

16 certificate no longer satisfy the criteria set

17 forth in section 4(b).

18 (B) REQUEST FOR COMPLIANCE INFORMA19 TION.—If the Attorney General or Secretary

20 has reason to believe that any of the grounds

21 for revocation of a certificate of review de22 scribed in subparagraph (A) may apply to a

23 person holding the certificate, the Attorney

24 General shall request such information from

25 such person as the Attorney General or the Sec-
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1 retary deems necessary to resolve the matter of

2 compliance. Failure to comply with such request

3 shall be grounds for revocation of the certificate

4 under this paragraph.

5 (C) PROCEDURES FOR REVOCATION.—If

6 the Attorney General or the Secretary deter7 mines that any of the grounds for revocation of

8 a certificate of review described in subpara9 graph (A) apply to a person holding the certifi10 cate, or that such person has failed to comply

11 with a request made under subparagraph (B),

12 the Attorney General shall give written notice of

13 the determination to such person. The notice

14 shall include a statement of the circumstances

15 underlying, and the reasons in support of, the

16 determination. In the 60-day period beginning

17 30 days after the notice is given, the Attorney

18 General shall revoke the certificate or modify it

19 as the Attorney General or the Secretary deems

20 necessary to cause the certificate to apply only

21 to activities that meet the procedures for the is22 suance of certificates described in subsection

23 (b)(2).

24 (D) INVESTIGATION AUTHORITY.—For

25 purposes of carrying out this paragraph, the
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1 Attorney General may conduct investigations in

2 the same manner as the Attorney General con3 ducts investigations under section 3 of the Anti4 trust Civil Process Act, except that no civil in5 vestigative demand may be issued to a person

6 to whom a certificate of review is issued if such

7 person is the target of such investigation.

8 (d) REVIEW OF DETERMINATIONS.—

9 (1) AVAILABILITY OF REVIEW FOR CERTAIN AC10 TIONS.—If the Attorney General denies, in whole or

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

12 for an amendment to a certificate, or revokes or

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

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

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

16 bring an action in any appropriate district court of

17 the United States to set aside the determination on

18 the ground that such determination is erroneous

19 based on the preponderance of the evidence.

20 (2) NO OTHER REVIEW PERMITTED.—Except

21 as provided in paragraph (1), no action by the At22 torney General or the Secretary pursuant to this

23 title shall be subject to judicial review.

24 (3) EFFECT OF REJECTED APPLICATION.—If

25 the Attorney General denies, in whole or in part, an
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1 application for a certificate of review or for an

2 amendment to a certificate, or revokes or amends a

3 certificate, neither the negative determination nor

4 the statement of reasons therefore shall be admissi5 ble in evidence, in any administrative or judicial pro6 ceeding, concerning any claim under the antitrust

7 laws.

8 (e) PUBLICATION OF DECISIONS.—The Attorney

9 General shall publish a notice in the Federal Register on

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

11 application for a certificate of review under this section

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

13 a manner that protects the confidentiality of any propri14 etary information relating to the application.

15 (f) ANNUAL REPORTS.—Every person to whom a cer16 tificate of review is issued shall submit to the Attorney

17 General an annual report, in such form and at such time

18 as the Attorney General may require, that contains any

19 necessary updates to the information required under sub20 section (b) and a description of the activities of the holder

21 under the certificate during the preceding year.

22 (g) RESTRICTIONS ON DISCLOSURE OF INFORMA23 TION.—

24 (1) WAIVER OF DISCLOSURE REQUIREMENTS

25 UNDER ADMINISTRATIVE PROCEDURE ACT.—Infor-
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1 mation submitted by any person in connection with

2 the issuance, amendment, or revocation of a certifi3 cate of review shall be exempt from disclosure under

4 section 552 of title 5, United States Code.

5 (2) RESTRICTIONS ON DISCLOSURE OF COM6 MERCIAL OR FINANCIAL INFORMATION.—

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

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

9 United States shall disclose commercial or fi10 nancial information submitted in connection

11 with the issuance, amendment, or revocation of

12 a certificate of review if the information is priv13 ileged or confidential and if disclosure of the in14 formation would cause harm to the person who

15 submitted the information.

16 (B) EXCEPTIONS.—Subparagraph (A)

17 shall not apply with respect to information dis18 closed—

19 (i) upon a request made by the Con20 gress or any committee of the Congress,

21 (ii) in a judicial or administrative pro22 ceeding, subject to appropriate protective

23 orders,

24 (iii) with the consent of the person

25 who submitted the information,
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1 (iv) in the course of making a deter2 mination with respect to the issuance,

3 amendment, or revocation of a certificate

4 of review, if the Attorney General deems

5 disclosure of the information to be nec6 essary in connection with making the de7 termination,

8 (v) in accordance with any require9 ment imposed by a statute of the United

10 States, or

11 (vi) in accordance with any rule or

12 regulation promulgated under subsection

13 (i) permitting the disclosure of the infor14 mation to an agency of the United States

15 or of a State on the condition that the

16 agency will disclose the information only

17 under the circumstances specified in

18 clauses (i) through (v).

19 (3) PROHIBITION AGAINST USE OF INFORMA20 TION TO SUPPORT OR ANSWER CLAIMS UNDER ANTI21 TRUST LAWS.—Any information disclosed in an ap22 plication for a certificate of review under this section

23 shall only be admissible into evidence in a judicial or

24 administrative proceeding for the sole purpose of es-
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1 tablishing that a person is entitled to the protections

2 provided by such a certificate.

3 SEC. 6. NOTIFICATIONS PROVIDING REDUCTION IN CER4 TAIN PENALTIES UNDER ANTITRUST LAW

5 FOR HEALTH CARE COOPERATIVE VEN6 TURES.

7 (a) NOTIFICATIONS DESCRIBED.—

8 (1) SUBMISSION OF NOTIFICATION BY VEN9 TURE.—Any party to a health care cooperative ven10 ture, acting on such venture’s behalf, may, not later

11 than 90 days after entering into a written agreement

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

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

14 later, file with the Attorney General a written notifi15 cation disclosing—

16 (A) the identities of the parties to such

17 venture,

18 (B) the nature and objectives of such ven19 ture, and

20 (C) such additional information as the At21 torney General may require by regulation.

22 (2) ACTIVITIES DEEMED SUBMISSION OF NOTI23 FICATION.—The following health care cooperative

24 ventures shall be deemed to have filed a written noti-
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1 fication with respect to the venture under paragraph

2 (1):

3 (A) SUBMISSION OF APPLICATION FOR

4 CERTIFICATE OF REVIEW.—Any health care co5 operative venture for which an application for a

6 certificate of review is filed with the Attorney

7 General under section 4.

8 (B) CERTAIN VENTURES.—Any health care

9 cooperative venture meeting the following re10 quirements:

11 (i) The venture consists of a network

12 of non-institutional providers not greater

13 than—

14 (I) in the case of a nonexclusive

15 network in which the participating

16 members are permitted to create or

17 join other competing networks, 50

18 percent of the providers of health care

19 services in the relevant geographic

20 area and 50 percent of the members

21 of the provider specialty group in the

22 relevant market; or

23 (II) in the case of an exclusive

24 network in which the participating

25 members are not permitted to create
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1 or join other competing networks, 35

2 percent of the providers of health care

3 services in the relevant geographic

4 area and 35 percent of the members

5 of the provider specialty group in the

6 relevant market.

7 (ii) Each member of the venture as8 sumes substantial financial risk for the op9 eration of the venture through risk-sharing

10 arrangements, including (but not limited

11 to)—

12 (I) the acceptance of capitation

13 contracts;

14 (II) the acceptance of contracts

15 with fee withholding mechanisms re16 lating to the ability to meet estab17 lished goals for utilization review and

18 management; and

19 (III) the holding by members of

20 significant ownership or equity inter21 ests in the venture, where the capital

22 contributed by the members is used to

23 fund the operational costs of the ven24 ture such as administration, market25 ing, and computer-operated medical
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1 information, if the venture develops

2 and operates comprehensive programs

3 for utilization management and qual4 ity assurance that include controls

5 over the use of institutional, special6 ized, and ancillary medical services.

7 (3) SUBMISSION OF ADDITIONAL INFORMA8 TION.—

9 (A) REQUEST OF ATTORNEY GENERAL.—

10 At any time after receiving a notification filed

11 under paragraph (1), the Attorney General may

12 require the submission of additional information

13 or documentary material relevant to the pro14 posed health care cooperative venture.

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

16 a health care cooperative venture may submit

17 such additional information on the venture’s be18 half as may be appropriate to ensure that the

19 venture will receive the protections provided

20 under subsection (b).

21 (C) REQUIRED SUBMISSION OF INFORMA22 TION ON CHANGES TO VENTURE.—A health

23 care cooperative venture for which a notification

24 is in effect under this section shall submit infor25 mation on any change in the membership of the
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1 venture not later than 90 days after such

2 change occurs.

3 (4) PUBLICATION OF NOTIFICATION.—

4 (A) INFORMATION MADE PUBLICLY AVAIL5 ABLE.—Not later than 30 days after receiving

6 a notification with respect to a venture under

7 paragraph (1), the Attorney General shall pub8 lish in the Federal Register a notice with re9 spect to the venture that identifies the parties

10 to the venture and generally describes the pur11 pose and planned activity of the venture. Prior

12 to its publication, the contents of the notice

13 shall be made available to the parties to the

14 venture.

15 (B) RESTRICTION ON DISCLOSURE OF

16 OTHER INFORMATION.—All information and

17 documentary material submitted pursuant to

18 this section and all information obtained by the

19 Attorney General in the course of any investiga20 tion or case with respect to a potential violation

21 of the antitrust laws by the health care coopera22 tive venture (other than information and mate23 rial described in subparagraph (A)) shall be ex24 empt from disclosure under section 552 of title

25 5, United States Code, and shall not be made
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1 publicly available by any agency of the United

2 States to which such section applies except in

3 a judicial proceeding in which such information

4 and material is subject to any protective order.

5 (5) WITHDRAWAL OF NOTIFICATION.—Any per6 son who files a notification pursuant to this section

7 may withdraw such notification before a publication

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

9 Any person who is deemed to have filed a notifica10 tion under paragraph (2)(A) shall be deemed to have

11 withdrawn the notification if the certificate of review

12 in question is revoked or withdrawn under section 5.

13 (6) NO JUDICIAL REVIEW PERMITTED.—Any

14 action taken or not taken by the Attorney General

15 with respect to notifications filed pursuant to this

16 subsection shall not be subject to judicial review.

17 (b) PROTECTIONS FOR VENTURES SUBJECT TO NO18 TIFICATION.—

19 (1) IN GENERAL.—

20 (A) PROTECTIONS DESCRIBED.—The pro21 visions of paragraphs (2), (3), (4), and (5) shall

22 apply with respect to any action under the anti23 trust laws challenging conduct within the scope

24 of a notification which is in effect pursuant to

25 subsection (a)(1).
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1 (B) TIMING OF PROTECTIONS.—The pro2 tections described in this subsection shall apply

3 to the venture that is the subject of a notifica4 tion under subsection (a)(1) as of the earlier

5 of—

6 (i) the date of the publication in the

7 Federal Register of the notice published

8 with respect to the notification; or

9 (ii) if such notice is not published dur10 ing the period required under subsection

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

12 that begins on the date the Attorney Gen13 eral receives any necessary information re14 quired to be submitted under subsection

15 (a)(1) or any additional information re16 quired by the Attorney General under sub17 section (a)(3)(A).

18 (2) APPLICABILITY OF RULE OF REASON

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

20 the conduct of any person which is within the scope

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

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

23 basis of its reasonableness, taking into account all

24 relevant factors affecting competition, including, but
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1 not limited to, effects on competition in relevant

2 markets.

3 (3) LIMITATION ON RECOVERY TO ACTUAL

4 DAMAGES AND INTEREST.—Notwithstanding section

5 4 of the Clayton Act, any person who is entitled to

6 recovery under the antitrust laws for conduct that is

7 within the scope of a notification filed under sub8 section (a) shall recover the actual damages sus9 tained by such person and interest calculated at the

10 rate specified in section 1961 of title 28, United

11 States Code, for the period beginning on the earliest

12 date for which injury can be established and ending

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

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

15 under the circumstances.

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

17 OF SUIT.—

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

19 antitrust laws brought against a health care co20 operative venture for conduct that is within the

21 scope of a notification filed under subsection

22 (a), the court shall, at the conclusion of the ac23 tion—

24 (i) award to a substantially prevailing

25 claimant the cost of suit attributable to
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1 such claim, including a reasonable attor2 ney’s fee, or

3 (ii) award to a substantially prevailing

4 party defending against such claim the

5 cost of such suit attributable to such claim,

6 including reasonable attorney’s fee, if the

7 claim, or the claimant’s conduct during

8 litigation of the claim, was frivolous, un9 reasonable, without foundation, or in bad

10 faith.

11 (B) OFFSET IN CASES OF BAD FAITH.—

12 The court may reduce an award made pursuant

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

14 award in favor of another party for any part of

15 the cost of suit (including a reasonable attor16 ney’s fee) attributable to conduct during the

17 litigation by any prevailing party that the court

18 finds to be frivolous, unreasonable, without

19 foundation, or in bad faith.

20 (5) RESTRICTIONS ON ADMISSIBILITY OF IN21 FORMATION.—

22 (A) IN GENERAL.—Any information dis23 closed in a notification submitted under sub24 section (a)(1) and the fact of the publication of

25 a notification by the Attorney General under
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1 subsection (a)(4) shall only be admissible into

2 evidence in a judicial or administrative proceed3 ing for the sole purpose of establishing that a

4 party to a health care cooperative venture is en5 titled to the protections described in this sub6 section.

7 (B) ACTIONS OF ATTORNEY GENERAL.—

8 No action taken by the Attorney General pursu9 ant to this section shall be admissible into evi10 dence in any judicial or administrative proceed11 ing for the purpose of supporting or answering

12 any claim under the antitrust laws.

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

14 CERTIFICATES OF REVIEW.

15 (a) IN GENERAL.—The Attorney General (in con16 sultation with the Secretary and the Chair) shall periodi17 cally review the safe harbors described in section 3, the

18 additional safe harbors designated under section 4, and

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

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

21 section 3, submit such recommendations to Congress

22 as the Attorney General considers appropriate for

23 modifications of such safe harbors;

24 (2) with respect to the additional safe harbors

25 designated under section 4, issue proposed revisions
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1 to such activities and publish the revisions in the

2 Federal Register; and

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

4 submit a report to Congress on the issuance of such

5 certificates, and shall include in the report a descrip6 tion of the effect of such certificates on increasing

7 access to high quality health care services at reduced

8 costs.

9 (b) RECOMMENDATIONS FOR LEGISLATION.—The

10 Attorney General shall include in the reports submitted

11 under subsection (a)(3) any recommendations of the At12 torney General for legislation to improve the program for

13 the issuance of certificates of review established under this

14 title.

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

16 (a) SAFE HARBORS, CERTIFICATES, AND NOTIFICA17 TIONS.—The Attorney General, with the concurrence of

18 the Secretary, shall promulgate such rules, regulations,

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

20 4, 5, and 6, including guidelines defining or relating to

21 relevant geographic and product markets for health care

22 services and providers of health care services.

23 (b) GUIDANCE FOR PROVIDERS.—

24 (1) IN GENERAL.—To promote greater cer25 tainty regarding the application of the antitrust laws
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1 to activities in the health care market, the Attorney

2 General, in consultation with the Secretary and the

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

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

5 criteria used to designate additional safe harbors

6 under section 4 and grant certificates of review

7 under section 5, publish guidelines—

8 (A) to assist providers of health care serv9 ices in analyzing whether the activities of such

10 providers may be subject to a safe harbor under

11 sections 3 or 4; and

12 (B) describing specific types of activities

13 which would meet the requirements for a cer14 tificate of review under section 5, and summa15 rizing the factual and legal bases on which the

16 activities would meet the requirements.

17 (2) PERIODIC UPDATE.—The Attorney General

18 shall periodically update the guidelines published

19 under paragraph (1) as the Attorney General consid20 ers appropriate.

21 (3) WAIVER OF ADMINISTRATIVE PROCEDURE

22 ACT.—Section 553 of title 5, United States Code,

23 shall not apply to the issuance of guidelines under

24 paragraph (1).
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1 SEC. 9. ESTABLISHMENT OF HHS OFFICE OF HEALTH CARE

2 COMPETITION POLICY.

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

4 Department of Health and Human Services an Office to

5 be known as the Office of Health Care Competition Policy

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

7 Office shall be headed by a director, who shall be ap8 pointed by the Secretary.

9 (b) DUTIES.—The Office shall coordinate the respon10 sibilities of the Secretary under this Act and otherwise as11 sist the Secretary in developing policies relating to the

12 competitive and collaborative activities of providers of

13 health care services.

14 SEC. 10. DEFINITIONS.

15 In this Act, the following definitions shall apply:

16 (1) The term ‘‘antitrust laws’’—

17 (A) has the meaning given it in subsection

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

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

20 section 5 of the Federal Trade Commission Act

21 (15 U.S.C. 45) to the extent such section ap22 plies to unfair methods of competition; and

23 (B) includes any State law similar to the

24 laws referred to in subparagraph (A).

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

26 Federal Trade Commission.
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1 (3) The term ‘‘health benefit plan’’ means any

2 hospital or medical expense incurred policy or certifi3 cate, hospital or medical service plan contract, or

4 health maintenance subscriber contract, or a mul5 tiple employer welfare arrangement or employee ben6 efit plan (as defined under the Employee Retirement

7 Income Security Act of 1974) which provides bene8 fits with respect to health care services.

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

10 means any activities, including attempts to enter

11 into or perform a contract or agreement, carried out

12 by 2 or more persons for the purpose of providing

13 health care services.

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

15 services for which payment may be made under a

16 health benefit plan, including services related to the

17 delivery or administration of such services.

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

19 means a medical society or association, a specialty

20 board, a recognized accrediting agency, or a hospital

21 medical staff, and includes the members, officers,

22 employees, consultants, and volunteers or commit23 tees of such an entity.

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

25 of local government.
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1 (8) The term ‘‘provider of health care services’’

2 means any individual or entity that is engaged in the

3 delivery of health care services in a State and that

4 is required by State law or regulation to be licensed

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

6 such services in the State.

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

8 of Health and Human Services.

9 (10) The term ‘‘specialty group’’ means a medi10 cal specialty or subspecialty in which a provider of

11 health care services may be licensed to practice by

12 a State (as determined by the Secretary in consulta13 tion with the certification boards for such specialties

14 and subspecialties).

15 (11) The term ‘‘standard setting and enforce16 ment activities’’ means—

17 (A) accreditation of health care practition18 ers, health care providers, medical education in19 stitutions, or medical education programs,

20 (B) technology assessment and risk man21 agement activities,

22 (C) the development and implementation of

23 practice guidelines or practice parameters, or

24 (D) official peer review proceedings under25 taken by a hospital medical staff (or committee
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1 thereof) or a medical society or association for

2 purposes of evaluating the professional conduct

3 or quality of health care provided by a medical

4 professional.

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