Three major government agencies are adding new officials to investigate price-gouging in health care — positions experts say will help the three agencies better coordinate across the government.
The new jobs are part of the Biden White House’s new efforts to scrutinize what it calls “corporate greed” in health care.
The Biden administration hasn’t said much about the three new health care counsels, beyond what’s in the initial press release. That announcement spelled out that the new officials will work on two specific areas: investigating private equity’s impact in the health sector, and digging into anti-competitive practices, such as firms “rolling up” small practices in transactions that don’t meet antitrust thresholds. The release cited STAT’s reporting on private equity buying lucrative businesses in controversial autism therapy and travel nursing industries.
Furthermore, the three new officials will lead joint efforts to train employees, share data, and create policy initiatives in those same subject areas. All three agencies, the Department of Justice, the Federal Trade Commission, and the Department of Health and Human Services, declined to give STAT further details about the new positions.
Antitrust experts who spoke with STAT agreed the three new roles will likely formalize the informal communications already going on between the FTC and DOJ, which share the duties of scrutinizing health sector mergers and acquisitions. Generally speaking, the DOJ has focused on health insurance company activities, while the FTC has focused on providers like hospitals and physician practices. But those lines are blurring more and more, making communication and coordination more crucial, said John Carroll, a partner at law firm Sheppard Mullin.
“You have transactions that are payer-provider, you have transactions that are payer-provider-pharmacy, you have [management services organizations], you have all these different entities and businesses providing care or providing some form of insurance or managing that care across the U.S. health care ecosystem,” said Carroll.
Even though HHS isn’t typically involved in antitrust investigations, Carroll said that getting the agency more involved, along with its subagency the Centers for Medicare and Medicaid Services, will help the FTC and the DOJ understand ongoing dynamics in the health care space.
“To understand and assess potential antitrust issues, you have to understand incentives and follow the money and understand the various businesses,” he said. “What HHS and CMS do with respect to reimbursement affects incentives, economic incentives. And so they definitely have a role to play.”
Some experts said that while the three new leaders will mostly serve to lead coordination across agencies, the announcement implied the Justice Department’s health counsel would be more involved in day-to-day enforcement.
“The indications are that the FTC’s new Counsel for Health Care will primarily serve in a policymaking role, helping to set the FTC’s law-enforcement agenda in the health care sector. For example, the Counsel will likely serve to identify trends or practices in the healthcare sector that may warrant guidance, policy statements, investigation, or enforcement,” said Benjamin Dryden, a partner at Foley & Lardner. “By comparison, based on the wording of the press release, the Counsel for Health Care at the DOJ may have a greater role in day-to-day investigation and enforcement matters than their counterpart at the FTC will have.”
Experts told STAT that they hope the new positions, along with the agencies’ associated request for information about the impact of private equity on Americans’ health, will bring more data and transparency to the sector.
Rick Zall, partner and chair of health care transactional and regulatory practice at King & Spalding, said he sees the move as the agencies moving from a reactive to a proactive position, which he hopes allows them to provide more guidance and take new initiative for regulations.
“The industry and the various players would find it useful to have more clarity about about where the agencies are, about what kind of data is actually out there, as opposed to conjecture about the results of these [private equity] transactions, and guidance so that the actors out there in the industry have a better sense of what lies ahead,” he said.
Experts said that right now, it’s a foregone conclusion that all private equity ownership is bad, and having more data might change that perception. Jolie Apicella, a partner at law firm Wiggin and Dana, said that someone promoted through one of the agencies into this position might find it harder to form an independent opinion on these issues given the context of their previous job mandates.
“The question mark in my mind,” said Apicella, is “whether they go and find someone more independent — maybe in academia or in policy — or they up someone internally.”