FTC’s Consistent Guidance for Establishing “Meaningful” Clinical Integration

Clinical Integration is a term that has been used to describe a myriad of initiatives to coordinate healthcare services across providers and sites-of-care. For the purposes of substantiating joint contracting amongst otherwise competing healthcare providers, the Federal Trade Commission (FTC) and U.S. Department of Justice (DOJ) has defined clinical integration as, “…an active and ongoing program to evaluate and modify practice patterns by the network’s physician participants and create a high degree of interdependence and cooperation among physicians to control costs and ensure quality.” While this definition does provide some direction, the consistent guidance provided in the FTC’s advisory opinions may serve as a more practical working definition for would be clinically integrated networks (CINs).

The FTC has rendered five advisory opinions in regards to clinically integrated managed care contracting networks. The most recent of these opinions, and the first since the enactment of the Affordable Care Act, was published on February 13, 2013. This opinion stated that the FTC has no present intention to challenge the clinical integration program (CIP) Norman Physician Hospital Organization in Oklahoma. In its opinion, the FTC conveyed the following reasons why it felt that this CIP’s pro-competitive effects would likely outweigh its anti-competitive effects:

  1. The network made significant investments in infrastructure (e.g. information technology and human capital);
  2. The network created various mechanisms to monitor and control cost, utilization, and quality of care;
  3. The participating physicians made or will make significant investments of capital and/or sweat equity in the development and ongoing operations of the network; and
  4. The network will enforce physician compliance with principles of value-based care.

These justifications have been consistent across the FTC’s four favorable opinions on CINs. Due to this fact, hospitals, health systems, and provider organizations should consider using these four criteria as a high-level litmus test of the regulatory risk of their CIP.

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