The Federal Trade Commission (FTC) on Monday announced that it has ordered two health systems and five health insurance companies to give the agency information that will help it with an ongoing project examining the effects of certain state regulations on mergers in the industry.
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About the project
FTC said it specifically is looking to evaluate the effects that certificates of public advantage (COPAs) have on health care access, innovation, prices, and quality. According to FTC, COPAs are used by states "to immunize mergers and collaborations from antitrust scrutiny." FTC previously has expressed skepticism about COPAs and their effects.
FTC said it issued the most recent orders as part of an ongoing project to examine the effects of COPAs recently granted to Ballad Health in Tennessee and Virginia and Cabell Huntington Hospital in West Virginia. The agency sent orders seeking patient-level claims data to:
- BlueCross BlueShield of Tennessee;
- Cigna; and
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In addition, FTC sent orders to Ballad Health and Cabell Huntington Hospital seeking "aggregated patient billing and discharge data; health system employee wage data; and other information relevant for analyzing the health systems' prices, quality, access, and innovation."
FTC said it also will look at how hospital mergers have affected employee wages.
The agency said it intends to collect information relevant to its investigation over the next several years to generate retrospective analyses of the COPAs granted to the health systems. FTC plans to release its findings publicly, and the agency said its findings will help to "inform future advocacy and enforcement."
According to Axios, the information could help FTC understand whether COPAs "better serve the public or the merging hospitals."
Companies say they're reviewing the orders
Alison Sexter, a spokesperson for Blue Cross and Blue Shield of Tennessee, in an email to Modern Healthcare wrote that the company is "definitely going to comply with the request."
According to Modern Healthcare, none of the other insurers who were sent the orders responded to requests for comment.
Teresa Hicks, a spokesperson for Ballad, in a statement said Balled appreciates the role FTC has in issues subject to federal laws, including "the important Supreme Court and constitutional doctrine of the states' rights to regulate economic activity within the states." She added, "We are reviewing the request by the FTC within the context of the actions of two legislatures and two governors of two different parties that passed legislation specifically asserting state action immunity."
A spokesperson for Cabell Huntington Hospital said the organization received and is reviewing FTC's order.
FTC in its announcement said it issued the orders in accordance with Section 6(b) of the FTC Act, and the orders state that the agency could impose penalties on entities that fail to comply with the request. According to Modern Healthcare, Section 6(b) of the FTC Act gives the agency broad authority to order companies to submit information for FTC's use in investigations and research.
As such, legal experts have said the health systems and insurers could face ramifications if they do not submit the requested data. Erin Fuse Brown, an associate professor at Georgia State University's College of Law, said, "Courts have upheld a broad ability for the FTC to demand this kind of information" (Bannow, Modern Healthcare, 10/22; Herman, Axios, 10/22; Reed, FierceHealthcare, 10/22; FTC release, 10/21; Bannow, Modern Healthcare, 10/24).