On July 14, 2023, the Federal Trade Commission (FTC) joined the Department of Justice’s (DOJ) Antitrust Division in withdrawing its longstanding healthcare policy statements creating “antitrust safety zones” for collaborations in the healthcare industry. The FTC’s announcement—which lagged behind DOJ's withdrawal by several months (and which we previously analyzed in the Bloomberg article, “Axing Health-Care Antitrust Safety Zones Will Impact Transactions,” and our legal update, “US DOJ eliminates healthcare “antitrust safety zones”’)—ends any possibility that the safe harbor provisions of those policies have residual value for the healthcare industry. Healthcare providers, healthcare collaborations, IPAs, trade associations and other healthcare information-sharing practitioners should re-examine their practices, especially those that previously fell within or adjacent to a safety zone and may have become deeply ingrained during the long period in which the safety zones were applicable policy.

The FTC exercises significant enforcement authority over the healthcare industry, and in announcing its withdrawal from the policies, the agency called them “outdated” and no longer reflective of market realities. These statements are consistent with the FTC’s frequently confirmed focus on the healthcare industry under Chair Lina Khan, which she most recently repeated in her congressional oversight testimony the day before the withdrawal of the policies.

Like DOJ, the FTC is unlikely to provide new guidance to replace the withdrawn policies and instead directs healthcare market participants to seek guidance from its “enforcement actions, policy statements, and competition advocacy in health care.” Two areas of immediate concern based on the FTC’s recent policy statements and competition advocacy are: 1) consolidation between providers and 2) conduct that impacts the wages of healthcare workers.

Healthcare industry consolidation has been a key focus of the FTC. In her July 13 congressional testimony, for instance, Chair Khan noted that a “primary focus” of the FTC’s use of its powers to conduct market-wide inquiries pursuant to Section 6(b) of the FTC Act has been on healthcare markets. Among these efforts are an ongoing study of the effects of physician group and healthcare facility consolidation between 2015-2020. The FTC and DOJ also convened a multi-day “listening forum” in April 2022 that focused on and was highly critical of healthcare industry consolidation.

Another area that may be impacted by the withdrawal of the safety zones – particularly the withdrawn guidance on information sharing practices – relates to the labor markets for healthcare. This has been a durable focus of both the FTC and DOJ in the Biden Administration, and was cited by Chair Khan and another commissioner in challenging the proposed merger of two healthcare systems in Rhode Island in 2022. Compensation benchmarking activities and related practices may come under renewed scrutiny and should no longer be presumed safe from an antitrust perspective, even if they are conducted by third parties and involve historical data at a higher level of aggregation.

In light of this development, and as we previously advised, entities should review their arrangements and ask three questions of healthcare collaborations:

  • Is there a legitimate and procompetitive rationale that will benefit consumers through the introduction of efficiencies?
  • Does the collaboration tend to lessen competition?
  • Are the business justifications and procompetitive rationale documented sufficiently to support the collaboration’s benefit to consumers and procompetitive effects?

The withdrawal from the policies is the latest evidence of the Biden Administration’s aggressive stance on antitrust enforcement, as the FTC and DOJ take a broader view of competition across industries. The FTC’s pledge to engage in “case-by-case enforcement” interjects additional uncertainty into healthcare industry collaborations that previously fell within safety zones and changes the risk calculus that applies to these collaborations. Additionally, the withdrawal of the DOJ and FTC Statements of Antitrust Policy in Healthcare also calls into question the continuing viability of other policies that create safety zones, including those in 2000’s Antitrust Guidelines for Collaborations Among Competitors, which created safety zones for 1) general collaborations where the participants had collective market shares of no more than twenty percent and 2) research and development competition in innovation markets, and 2016’s Antitrust Guidance for Human Resource Professionals, which cited the now-withdrawn healthcare policies for guidance on allowable information exchanges between competitors.

Both the FTC and DOJ have clearly expressed their views that changes in healthcare markets over time require their continued and increased focus on competition in the industry. Healthcare institutions should review their current models and practices to ensure they can withstand this intensified scrutiny.


Co-Head of Healthcare, United States

Recent publications

Subscribe and stay up to date with the latest legal news, information and events . . .