Health-Care Centerpiece in Law Lacks Clarity, FTC Member Says

Thomas Rosch, a Republican member of the U.S. Federal Trade Commission, urged the Obama administration to clarify a centerpiece of the new health-care law that raises antitrust issues.

An administration rule implementing the new program should specify whether the FTC or the Justice Department has authority to determine when there is anticompetitive behavior, Rosch said today in Washington.

At issue are so-called accountable care organizations which allow hospitals, insurers and groups of doctors to form combines with the aim of cutting health costs. Rosch said he is also concerned that the administration’s new rules, to be announced soon, won’t be able to measure cost reduction adequately.

The lack of specificity would “result in sub-optimal enforcement” and could trigger “a turf war” between the FTC and Justice Department, said Rosch, one of five FTC commissioners. He said the FTC should have jurisdiction because of its superior expertise in ensuring the new groups are not so powerful that they raise costs.

If antitrust issues aren’t addressed in the rule governing accountable care organizations, hospitals may hesitate to form the new partnerships, said Amanda Forster, a spokeswoman for Premier Inc., a hospital-group purchasing organization based in Charlotte, North Carolina.

“Would you want to apply without knowing whether or not your model was legal?” she said in a telephone interview.

President Barack Obama plans to establish the health-care groups as Republicans push to repeal the law, claiming it gives government too much of a role in medical decisions and raises costs.

The Justice Department has said it will speed up reviews of the proposed combines to help participants avoid antitrust violations.

Rosch said he is also concerned that the rule won’t gauge whether the new groups shift costs from Medicare to private insurers.

To contact the reporter on this story: Jeff Bliss in Washington at jbliss@bloomberg.net

To contact the editor responsible for this story: Mark Silva in Washington at msilva34@bloomberg.net

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