As providers become more accountable for the quality and cost of care, they seek ways to collaborate with each other to achieve their goals. Often, effective management of cost and quality requires coordination among numerous providers. The antitrust laws, however, govern the types of activities that competitors can engage in when collaborating around value-based reimbursement.
As a general principle, the antitrust laws are designed to promote competition—including competition on price and quality. Therefore, the shifting reimbursement landscape from fee-for-service to value-based payments, to the extent that it fosters competition on price and quality, is harmonious with the antitrust laws.
Basic Antitrust Prohibition
Networks can also share risk by modifying discounted fee-for-service schedules to provide for utilization-based withholds, penalties or bonuses. These arrangements must create significant financial incentives for the physician participants, as a group, to achieve specified cost-containment goals. For example, these arrangements could involve: (1) withholding from all network participants a substantial amount of the compensation due to them, with distribution of that amount to members based on group performance in meeting the cost-containment goals of the network as a whole; or (2) establishing overall cost or utilization targets for the network as a whole, with the network’s members subject to subsequent substantial financial rewards or penalties based on the group’s performance in meeting the targets. A discounted fee-for-service arrangement negotiated by a network can create risk-sharing where a substantial amount of the discounted fees are withheld and deposited in a risk pool.
Global case rate arrangement is where the network agrees to a complex or extended course of treatment that requires the substantial coordination of care by physicians in different specialties for a fixed payment where the costs of that course of treatment for any individual patient can vary greatly due to a variety of factors.
These four examples are illustrative, and not exhaustive. As alternative forms of value-based compensation are developed, networks should consider whether the network participants share substantial financial risk in providing all the services that are jointly priced through the network, and whether all participants in the collaboration share that risk. Where proposed reimbursement differs from these four examples, networks should look to these examples for the scope of integration created through the programs. Providers must be sufficiently integrated through their collaboration to be likely to achieve significant procompetitive efficiencies (e.g., improvements in quality and reductions in unnecessary costs).
Practical Consideration: Is the amount of compensation jointly negotiated by the network at substantial financial risk?
Practical Considerations: What are the providers doing together, how and why are those activities meaningful, and how will those activities benefit patients?