Key takeaways

The Task Force on Health Care Monopolies and Collusion will focus on healthcare enforcement and policy in response to consolidation concerns across the healthcare industry.

Businesses should be aware of the Task Force's areas of focus, and expect increased civil or criminal scrutiny when conducting operations related to:

• The consolidation of payer and provider businesses
• Multiple acquisitions within the healthcare space
• Operations that affect patient's quality of care
• Changes that affect employee labor issues
• Conduct or deals involving medical billing and health care IT services
• Changes in the access or use of healthcare data
• Vertical integration or bundling of separate lines of commerce into a "coordinated stack"
• The use of artificial intelligence technology

In depth

On March 9, 2024, the DOJ announced the creation of the Task Force on Health Care Monopolies and Collusion. The new Task Force will lead the Division's policies and enforcement strategies related to healthcare industries with an emphasis on advocacy, investigations, and both civil and criminal enforcement. In conjunction with the announcement, Assistant Attorney General Jonathan Kanter expressed concerns that American healthcare spending increasingly went to a "small number of payers, providers, and dominant intermediaries that have consolidated their way to power in communities across the country."¹ In response to this concentration, the new Task Force will "identify and root out monopolies and collusive practices that increase costs, decrease quality and create single points of failure in the health care industry".²

Key to the Task Force's mandate are competition concerns that have been voiced by consumers and industry participants related to payer-provider consolidation, serial acquisitions, labor and quality of care, medical billing, healthcare IT services, and misuse of healthcare data. The Division also suggested that businesses should take care in their policies regarding the use of artificial intelligence, and merger strategy if pursing acquisitions across adjacent markets.

These mandates also coincide with the Division's revival of pursing criminal investigations for violations of Section 2 of the Sherman Act which prohibits monopolization, attempted monopolization, and conspiracies to monopolize. Indeed, on April 10 of this year, the Division announced it secured its second guilty plea from a fuel truck company for a conspiracy to monopolize. Together with the Task Force, this may signal that the Division will advance more criminal Section 2 enforcement in the healthcare sector.

The Task Force will be led by Katrina Rouse, the Deputy Director of Civil Enforcement and Special Counsel for Healthcare. Rouse, who joined the Division in 2011, previously served as the Division's Chief of the Defense Industrials Aerospace Section, the Assistant Chief of the Division's San Francisco Office, and a trial attorney in the Healthcare and Consumer Products Section. Rouse will lead a team of not only civil and criminal attorneys and economists, but also industry experts, technologists, data scientists, investigators, and policy advisors from across the Division.

The creation of the Task Force follows a string of agency actions that highlight the Division's emphasis on health care as an agency priority. These include:

• Tri-Agency Private Equity Focused RFI: On May 1, the DOJ, the Federal Trade Commission (FTC), and US Department of Health and Human Services extended the public comment period for their tri-agency Request for Information that sought details on certain types of market transactions, in particular by private equity, and their effect on consolidation.³ The current deadline for public comment is June 5.
• Portal for Public Reporting of Anticompetitive Practices: On April 18, the DOJ and FTC launched an online portal for the public to report on health care practices that may harm competition. The online portal located at HealthyCompetition.gov, was touted as a "one stop shop to report potential violations" and would "allow the agencies to collaborate early and often".⁴
• DOJ Investigation of Health Insurance Company's Internal Relationships: On February 27, the Wall Street Journal reported that DOJ launched a probe into on a major health insurance company and specifically the relationships between the company's insurance unit and the division offering pharmacy benefit management and physician groups. The company's Medicare billing practices are also under investigation to determine if certain practices artificially increased payments from the government for certain patient care.
• DOJ Pursuit of No-Poach Health Care Prosecutions: Though eventually voluntarily dismissed, the Division sought criminal charges for alleged no-poach agreements against companies in the surgical care markets. The government dismissed the last of the cases in November 2023 after losses on other individual and employer prosecutions in similar cases, but had obtained guilty pleas in the prior year against a nurse staffing agency and its former regional manager.

Conclusion

In conclusion, businesses should be aware of the Task Force's areas of focus, and expect scrutiny where deals and conduct involve these agency priorities. As evidenced by recent agency actions, the Division is increasingly departing from prior practice to pursue new avenues of enforcement. This means new civil and criminal investigations and prosecutions of conduct as well as deals previously cleared by the agency are likely. As a result, businesses should be prepared for more lengthy investigations in never-before investigated markets.

1 Dept. of Justice, Assistant Attorney General Jonathan Kantar Announces Task Force on Health Care Monopolies and Collusion, (Updated May, 9, 2024), available here.

2 Id.

3 Federal Trade Comm'n, FTC, DOJ and HHS Extend Period on Cross-Government Inquiry on Impact of Corporate Greed in Health Care, (Updated May 1, 2024), available here.

4 Federal Trade Comm'n, Federal Agencies Launch Portal for Public Reporting of Anticompetitive Practices in the Health Care Sector, (Updated April 18, 2024), available here.