Vermont state action v. the Texas TACO

“State action “ antitrust immunity is an often-overlooked element of Vermont’s reform plan. I don’t worry about provider market power with a single payer. But the Texas legislature proposed its version of state action immunity (SB 8), without the single payer reforms. Texas would license local “Bud Light” versions of ACOs (called Texas ACOs or TACOs Certified Healthcare Collaboratives), granting them full antitrust immunity (and lots of market power) to negotiate with payers. The FTC was not impressed:

  • Not needed

“Federal antitrust law already permits joint activity by health care collaboratives that is reasonably necessary to create efficiencies, improve quality of and access to health care, and have an overall precompetitive effect…We therefore see no need for new legislation to authorize collaboratives and collective negotiations.”

  • Anticompetitive

“the Bill appears intended to shield a broad range of anticompetitive conduct from antitrust challenge. This may cover anticompetitive mergers and acquisitions as well as a range of agreements among competitors that, although not strictly speaking per se illegal, are so inherently likely to injure competition that they are condemned under the rule of reason absent any plausible procompetitive justification.”

  • FAIL on state action

Parties claiming antitrust immunity under the state action doctrine bear the burden of establishing that they are entitled to such immunity. As the Supreme Court has made clear, this is a high bar.  The regulatory program proposed by the Bill appears not to meet that bar.”

For a sampler of prior TIE coverage of ACO market power questions, see Austin here and here and your truly here.

h/t to Fierce healthcare


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