The Federal Trade Commission (FTC) announced plans to examine the consequences of physician group consolidation with healthcare facilities. The agency said it had sent orders for 6 years’ worth of patient claims data to six insurers to inform this review: Cigna, United Healthcare, Anthem, Florida Blue, Aetna, and Health Care Service Corporation.
“This data will help the FTC assess the impact of physician consolidation during this period [calendar years 2015-2020], including physician practice mergers and hospital acquisitions of physician practices. It should also allow the FTC to assess the impact of healthcare facility consolidation,” according to an FTC news release. The release said the FTC hopes to learn how the mergers affected competition and “the proper functioning of healthcare markets,” with the latter informing policymakers.
Specifically, the FTC asked the insurers for claims data covering inpatient, outpatient, and physician services in 15 states. That includes how much patients paid for services, what insurers “actually” paid, and what insurers promised to pay; how patients chose their insurer; and what hospitals billed patients and whether physician services were included in the bill. It also includes health plan specifics (e.g., deductible amount) and patient status at discharge, according to a template of the letter the FTC sent the insurers.
The letter also asks insurers to “identify capitation, risk-sharing, bundled payment, ACO [accountable care organization] 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 or that were in effect at any time.”
The FTC launched the review per its Merger Retrospective Program. “Merger retrospective analysis seeks to determine, after the fact, whether a merger has affected competition in one or more of the markets impacted by the merger. The analysis can shed light on whether the agency’s threshold for bringing an enforcement action in a merger case has been too permissive,” according to an FTC news release in September announcing that the agency was expanding the program.
Said FTC chair Joseph Simons, “Merger retrospectives are a powerful way of engaging in critical self-examination to see if our antitrust enforcement is working correctly.”
Insurers’ representatives did not return queries for comment by press time.
Research has shown that consolidation drives up prices without concurrent increases in quality or patient experience, said Elizabeth Mitchell, president of the Pacific Business Group on Health, which advocates for fair costs. The pandemic has led to “an acceleration of merger activity,” which may have attracted the FTC’s attention, she said. “It’s significant they’ve gone to these health plans that don’t want to share this data. I think it’s an important step.”
“I think it is significant that they are looking at this,” Mitchell added. “We are certainly hopeful that it will produce actionable information.”
Consolidation between physician groups and healthcare facilities has surged over the last decade, although physicians with Beaumont Health in Detroit and Virginia Mason Memorial Hospital in Yakima, Washington, helped lead successful resistance against health system consolidation plans in 2020.