On April 30, 2020, a one-count felony charge was filed against Florida Cancer Specialists & Research Institute (FCS), alleging that the company participated in a criminal antitrust conspiracy with a competing oncology group – “Company A”. FCS, an oncology group headquartered in Fort Myers, Florida, allegedly agreed not to compete with one of its competitors in Collier, Lee, and Charlotte counties in Southwest Florida.
The Allegations
According to the Information, beginning as early as 1999 and continuing through at least September 2016, FCS entered into an illegal agreement with its co-conspirator that allocated chemotherapy treatments to FCS and radiation treatments to the competing oncology group.
To carry out the conspiracy, FCS and Company A agreed that FCS would not employ radiation oncologists and Company A would not employ medical oncologists in Southwest Florida, and maintained the allocation agreement by working together to prevent competition from third-party oncology treatment providers unaffiliated with either FCS or Company A in Southwest Florida.
This allowed FCS to operate with minimal competition in Southwest Florida and served to limit integrated care options and choices for cancer patients. According to the Department of Justice (DOJ), FCS’s revenues as a result of this conspiracy totaled more than $950 million.
The Resolution
To resolve the claims alleged against it, FCS entered into a deferred prosecution agreement (DPA) with the DOJ. Under the DPA, FCS admitted to conspiring to allocate chemotherapy and radiation treatments for cancer patients and agreed to pay a $100 million criminal penalty – the statutory maximum. FCS also agreed to fully cooperate with the ongoing DOJ investigation and maintain an effective compliance program designed to prevent and detect criminal antitrust violations.
Further, the agreement includes a non-compete waiver in an attempt to increase competition in the treatment of cancer patients in Southwest Florida. Under the waiver, FCS agreed to not enforce any non-compete provisions with its current (or former) oncologists. The waiver also extends to any other employees who, during the term of the DPA, open or join an oncology practice in Southwest Florida.
If FCS complies with the terms of the DPA, the DOJ will defer prosecuting FCS until 2023. Part of the impetus behind opting for a DPA was that if FCS were convicted on the charges, it would likely result in its exclusion from all federal health care programs under 42 U.S.C. 1320a-7 for a period of at least five years, and that such an exclusion would “result in substantial consequences” to not just the patients covered by federal healthcare programs, but also those outside the federal healthcare programs and those involved in ongoing clinical trials, as well as FCS employees.
More to Come?
In announcing the admission and penalty, the DOJ indicated that this “charge is the first in the department’s ongoing investigation into market allocation in the oncology industry.” Therefore, it is safe to assume we will hear more about this investigation – and potentially hear more about other conspiracies within that sector.
Government Reaction
“The FBI has no tolerance for medical providers who stand to profit by criminally exploiting cancer patients,” said Michael McPherson, Special Agent in Charge of the FBI’s Tampa Field Office. “We will not turn a blind eye while executives pad their pockets to the detriment of vulnerable Americans. We will use every tool at our disposal to ensure that the public has access to a competitive marketplace for healthcare.”