Earlier this year, the United States Federal Trade Commission (FTC) sent orders to six health insurance companies, seeking data on patient-level claims for inpatient, outpatient, and physician services for 2015 to 2020. The orders focus on fifteen states and a handful of insurance companies (Cigna, United Healthcare, Anthem, Florida Blue, Aetna, and Health Care Service Corporation). Upon receiving the data, the FTC plans to review it to better understand how hospitals’ acquisitions of physician practices have affected competition.
According to the orders, the FTC is seeking data including how much patients paid for services, what insurers actually paid, and what insurers promised to pay along with how patients chose their insurer, and what hospitals billed patients and whether physician services were included in the bill.
The FTC also wants insurers to identify “capitation, risk-sharing, bundled payment, ACO payment, value-based payment, lump-sum payment, increased reimbursement or bonuses for meeting quality objectives, or any reimbursement contracts other than fee-for-service with providers now in effect.”
According to a press release issued by the FTC, “The study results should aid the FTC’s enforcement mission by providing much more detailed information than is currently available about how physician practice mergers and healthcare facility mergers affect competition. The study results will also aid policymakers by providing important evidence documenting how mergers and acquisitions of physician groups and healthcare facilities affect the proper functioning of healthcare markets.”
Part of a Broader Initiative
This study is part of a broader initiative by the FTC to “revamp its merger retrospective program.” The merger retrospective analysis will attempt to determine after a merger has gone through whether it has impacted competition in one or more of the markets that are impacted by the merger. This will help the FTC determine whether its threshold for bringing an enforcement action in a merger case has been too permissive, as well as assess the performance of a pricing pressure index, merger simulation model, or other tools used to predict the effects of a proposed merger.
While the Merger Retrospective Program has been around for awhile, the newer initiative expands the program by addressing antitrust questions that have not been extensively studied in previous retrospective merger analyses and expands the analysis to industries that have not yet been studied.
FTC Chairman Joseph J. Simons noted that the overall goal of the initiative is to “encourage economists both inside and outside the agency to carry out more retrospective studies to test our analytical tools and strengthen our enforcement efforts.”