Department of Justice Health Care Monopolies Task Force

“The Task Force will identify and root out monopolies and collusive practices that drive up costs, drive down quality and create single points of failure in the healthcare industry.”

– Assistant Attorney General Jonathan Kanter

On May 9, 2024, the Department of Justice’s (DOJ) Antitrust Division announced a new Task Force on Healthcare Monopolies and Cooperatives (HCMC). Comprised of civil and criminal prosecutors, economists, healthcare industry experts, technologists, data scientists, investigators and policy advisors, the HCMC Task Force aims to “root out monopolies and collusive practices” in the healthcare industry .

The task force will investigate, both civilly and criminally, alleged unfair competition in what the Antitrust Division is calling a “whole-of-apartment” and “whole-of-government” approach to health care antitrust concerns. It’s the latest example of the Biden administration’s increased scrutiny of business practices that the administration believes could violate antitrust laws and will undoubtedly rely heavily on data analytics as part of its initial investigative efforts.

According to the DOJ, the task force will focus on several key areas.

1. “Many sided giants.” The task force will focus on what the DOJ has labeled “multifaceted giants,” ie, vertically integrated “payers” that rely on healthcare “platformization” to “bring” together disparate components of the industry. of healthcare, creating an integrated conglomerate. which includes payers, providers, PBMs, claims processors and banks.
2. Rapid accumulation of health care assets. The KLP Task Force will also focus on entities that have acquired multiple healthcare assets. According to the DOJ, these “quick asset” entities limit competition by functioning as de facto “gatekeepers” in the healthcare industry.
3. Coordination with other Government Agencies. The task force is not limited to the Antitrust Division and will work with, and across, other government agencies to bring multiple investigative tools to bear on alleged anti-competitive behavior in the health care industry. The Antitrust Division lists health care antitrust enforcement as a top priority and signaled that it will work across the Department to enforce antitrust-related misconduct it uncovers during its antitrust investigations.

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1. Review recent M&A activity. The DOJ has signaled an interest in vertically integrated “payer” companies that rely on healthcare “platformization” to “bring together” different components of the healthcare industry. Similar to the DOJ’s last safe harbor for voluntary self-disclosure of matters learned during the course of M&A transactions, companies should carefully evaluate due diligence and engage compliance professionals to reduce risks in transactions.
2. Review books and records. Reviewing your business’s billing practices and assessing whether they align with best practices can help you determine whether your business is at risk of receiving a closer look from the DOJ.
3. Beware of data analysis. The DOJ appears to be particularly interested in taking enforcement action against entities whose business practices have adversely affected patient care. Data analysis will play a major role in the DOJ investigation. Conducting a review of the care provided to ensure it conforms to best practices and industry standards serves as a strong defense against potential government enforcement.
4. Address concerns immediately. The DOJ has offered significant incentives to whistleblowers and companies to disclose potential wrongdoing. Over the past two years, the DOJ has announced numerous policy changes to corporate crime enforcement, which were largely based on a self-described “carrots and sticks” approach (“a mix of incentives and deterrence”). However, the timelines for companies to benefit from these programs are short. Therefore, consulting counsel as soon as an issue arises, or in anticipation of one, is critical to assessing next steps. Whether an internal investigation must be conducted, developing or improving effective compliance programs, or evaluating whether a Voluntary Self-Disclosure is in the best interest of the company are all decisions that need to happen quickly.