The FTC is urging the NY Legislature to withdraw a bill which would grant broad antitrust immunity to the Westchester and Erie County health care public benefit corporations. There is continuing scrutiny of state-sponsored population health initiatives (DSRIP) as it relates to the impact on commercial plans and consumers. The NY Attorney General is also opposed to the bill but for other reasons. As noted by the FTC in their letter dated June 5, 2015:

“The bills specifically authorize these corporations “to engage in arrangements, contracts, information sharing and other collaborative activities[,]” which “may include without limitation: joint ventures, joint negotiations with physicians, hospitals and payors, whether such negotiations result in separate or combined agreements; leases; and/or agreements which involve delivery system network creation and operation[.] Among the purported benefits of the corporations’ collaborative efforts, as described in the bills, is “achieving improved reimbursement from non-governmental payors.”

These comments follow the FTC’s April 23, 2015 submittal to DOH regarding COPA concerns. As noted in the FTC web site, they have been placing the DRSIP collaborations under a magnifying glass and are closely examining potential anti-competitive effects as well as the potential for increased health care costs in the non-Medicaid markets. The FTC concludes:

“Thus, it appears that a goal of the bills is to allow ECMC and WCHC to engage in collaborations or transactions that improve their bargaining leverage with commercial payors to increase their reimbursement rates. These higher reimbursement rates are likely to lead to higher health care costs for employers and commercially insured patients. Commercially insured patients likely would face higher premiums, co-pays, deductibles, and other out-of-pocket expenses. Self-insured employers would be particularly vulnerable to higher prices because they pay directly for the costs of their employees’ health care claims. Notwithstanding the bills’ stated goal of improving health care services for medically underserved patients, it is important to understand that competition among health care providers benefits all patients, regardless of whether covered by commercial or governmental programs. FTC staff disagrees with the bills’ suggestion that Medicaid or other governmental programs can cross-subsidize commercially insured patients. In reality, case-mix-adjusted commercial health care prices are usually higher than Medicaid or Medicare prices, and there is little evidence of dynamic cost-shifting in either direction.”

The June 5, 2015 FTC letter is posted here: https://www.ftc.gov/policy/policy-actions/advocacy-filings/2015/06/ftc-staff-comment-new-york-state-senator-tanzenhofer.