The DOJ and OIG’s New Initiative to Enhance Antitrust Enforcement
compliance, OIG, ebrief, DOJ, Antitrust
In October of 2022, a healthcare company pleaded guilty to engaging with a competitor to allocate employee nurses and fix the wages of those nurses. The company will pay over $130,000 as part of its sentence.
In response to the action, the U.S. Department of Justice (DOJ) Antitrust Division said, “Free and open labor markets are a cornerstone of the American dream. Today’s guilty plea demonstrates our commitment to ensuring that workers receive competitive wages and a fair chance to pursue better work and that criminals who conspire to deprive them of those rights are held accountable. The court’s sentence will compensate the hardworking health care workers who were victims of this crime.”
Traditionally, many compliance programs have not been extensively involved in antitrust compliance efforts. But that could change as a result of an action in December 2022, where the DOJ Antitrust Division and the Health and Human Services Office of Inspector General (OIG) signed a memorandum of understanding (MOU) to work more collaboratively in their antitrust enforcement efforts.
In reference to the signing of the MOU, Inspector General Christi Grimm said, “OIG’s mission is to protect the integrity of HHS programs and the health and welfare of the people served by those programs. We look forward to collaborating with the Antitrust Division to ensure that exclusions are imposed where appropriate and the people served by federal health care programs maintain access to health care products and services. Through this partnership, we will tackle unlawful behavior across the health care industry. This is an important moment in recognizing that protecting competition protects health care markets and ultimately benefits patients and Federal health care programs.”
An Overview of Agency Collaboration Outlined in the MOU
The MOU explains the two agencies will deepen their collaboration in relation to:
- Information sharing
- Investigations and enforcement activities
One of the intended outcomes identifying and remedying anticompetitive conduct or deceptive trade practices that may implicate OIG's exclusion authority and activities.
What Does the MOU Mean for Compliance Professionals?
Most compliance professionals are aware of OIG’s authority to exclude individuals and entities from participating in federal healthcare programs. Such exclusions are costly considering the percentage of patients with health insurance provided by a federal program.
As it relates to this exclusion authority, the MOU explains that in the event a person or an entity resolves a criminal antitrust investigation through a plea agreement, deferred prosecution agreement, non-prosecution agreement, or other form of resolution, and is subject to OIG' s exclusion authority, OIG and the Antitrust Division will work together to ensure that exclusions are imposed where appropriate. Many healthcare organizations’ codes of conduct explain their commitment to antitrust law compliance. For example, HCA’s Code of Conduct states, “Our competitive activities must conform to the high standards of integrity and fairness reflected in this Code of Conduct. The company requires compliance with antitrust and other laws governing competitive activities, and with the company’s written policies governing interactions with competitors, customers and suppliers.”
As a large national hospital company that continues to expand its presence and market share, HCA is not immune to legal challenges associated with antitrust complaints, as demonstrated by a North Carolina class action lawsuit alleging anticompetitive practices in violation of antitrust and consumer protection laws.
The DOJ/OIG MOU also describes cooperation and referral of suspected violations to the other agency in the event one of the agencies identifies deficiencies while conducting their own investigation. In essence, each agency will share what it sees with the other as they come upon concerns during their own work. The MOU states, “When OIG detects potential antitrust violations while investigating conduct, it will evaluate and, as appropriate, refer the matter to the Antitrust Division.” Likewise, “When the Antitrust Division detects potential violations of law or regulations within OIG's jurisdiction, the Antitrust Division will evaluate and, as appropriate, refer the matter to OIG.”
This focus on antitrust and anticompetition enforcement is consistent with an executive order that President Biden announced in July 2021 designed to “promote competition in the American economy, which will lower prices for families, increase wages for workers, and promote innovation and even faster economic growth.”
In his announcement, the President highlighted four areas in healthcare that should have particular focus, including:
- Prescription drugs
- Hearing aids
- Health insurance
Regarding hospitals, the White House stated, “Hospital consolidation has left many areas, especially rural communities, without good options for convenient and affordable healthcare service. Thanks to unchecked mergers, the ten largest healthcare systems now control a quarter of the market. Since 2010, 138 rural hospitals have shuttered, including a high of 19 last year, in the middle of a healthcare crisis. Research shows that hospitals in consolidated markets charge far higher prices than hospitals in markets with several competitors.”
Antitrust and anticompetition compliance has often been outside the realm of the traditional healthcare compliance officer. Many organizations place antitrust law compliance within the legal department. Regardless of where compliance responsibilities reside, this newly announced relationship and MOU between the OIG and DOJ Antitrust Division is bound to bring greater scrutiny and proactive organizations should consider their efforts in the area of antitrust compliance.
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