Provider Mergers and Health Plan Mergers: Analyzing the Antitrust Risks

The Affordable Care Act appears to have caused an explosion of mergers in the healthcare sector. The Federal Trade Commission has been particularly active in challenging hospital mergers, seeking preliminary injunctions to block three transactions at the present time and an unblemished record of success over the last nine years. Perhaps in part to counteract the effect of these transactions, health plans also are closely examining merging their operations. The Antitrust Division is presently investigating two health plan mergers that, if consummated, would consolidate the five largest commercial health insurers into three—Anthem’s proposed acquisition of Cigna and Aetna’s proposed acquisition of Humana. It thus behooves those working with healthcare providers and insurers to understand the background and reasons for these transactions, the circumstances under which they likely will be investigated, the analysis applied in determining whether challenge is warranted, including the variables the agencies consider, and how challenged transactions have fared in the courts.

This seminar, presented by Jeff Miles of Ober|Kaler, focuses on how the enforcement agencies and courts analyze the lawfulness of these transactions under Section 7 of the Clayton Antitrust Act. Mr. Miles briefly discusses the background and reasons for the transactions and their enforcement history, and then discusses in some depth the analytical framework used by the agencies in assessing transaction lawfulness, the factors they consider, and the circumstances under which a challenge is likely, focusing first on hospital mergers, then on health plan mergers, and with brief remarks about the acquisition of physician practices by hospitals. He concludes with several practical suggestions for attempting to minimize the antitrust risk from these transactions.

Learning Objectives:

I.     Examine the current antitrust environment for provider and health plan mergers

II.    Understand the reasons and purposes for the mergers

III.   Identify the circumstances likely to lead to an investigation of and challenge to the mergers

IV.   Grasp the antitrust framework and most important variables the enforcement agencies and courts consider in determining lawfulness 

V.    Discuss trends at the agencies and courts in analyzing these mergers 

VI.   Recognize the importance of early counsel involvement in attempting to avoid an investigation and challenge