Healthcare Antitrust Issues Beyond Formal Mergers: Joint Ventures, ACO's and Clinical Integration

This seminar, presented by Sheppard Mullin partner David Garcia, provides an overview of the antitrust issues peculiar to currently evolving healthcare provider transactions short of full-fledged conventional mergers that have quickly proliferated as healthcare providers attempt to respond to the changing environment created by the Affordable Care Act. These transactions typically have as their major economic purpose the creation of an ability to jointly negotiate with private third party payor plans on behalf of healthcare providers who would otherwise be prevented from doing so collectively by conventional antitrust principles. Resort to transactions and corporate structures to achieve these goals short of a full-fledged merger in turn springs, at least in large part, from a recognition of the enhanced scrutiny and regulatory skepticism now confronting conventional horizontal mergers between healthcare providers like hospitals and large doctor groups.

The types of structures that will be considered in the seminar include joint ventures, accountable care organizations, various sorts of physician/hospital affiliations, and a species of management and economic integration peculiar to the healthcare marketplace known as "clinical integration" which does not actually require any specific corporate transactional form. Each of these alternative transactions short of a standard merger presents its own particular antitrust concerns, and unlike the conventional merger context, in which the concerns typically involve an analysis of whether the merged entity will be able to exercise market power, some of these structures also raise complex issues under Section 1 of the Sherman Act, which prohibits conspiracies and agreements in restraint of trade between independent economic actors.

Learning Objectives:

I.   Summarize a concise cataloguing of the various types of proliferating healthcare corporate and organizational structures now sweeping provider-side healthcare short of classic mergers

II.  Understand the antitrust risks associated with each of these corporate structures

III. Identify business objectives and/or market characteristics that could make one or more of these structures more or less commercially and/or organizationally attractive

IV. Introduce the status of legal review by agencies and the courts of these various alternatives