Shields Questions State’s Increasing Giveaway of Anti-Trust Exemptions

Sen. Chip Shields was unsuccessful in his attempts to block anti-trust immunity to CCOs and long-term care facilities, but now, with the backing of the FTC, he’s trying to stop granting similar protections to health insurers discussing primary care payment models. Supporters of the primary care collaborative say it will encourage the healthcare industry to cough up information in a joint effort to reform the payment structure.

A Senate bill that’s pitched as a method to find better payment models for primary care is making its way through the Legislature, but Sen. Chip Shields, D-Portland, is raising alarms about a provision that adds yet another exemption to state anti-trust laws that protect Oregonians against business collusion.

Senate Bill 231 sets up a primary care collaborative, a key goal of the Oregon Health Policy Board, which has sought to reform primary care from payment-per-procedure, with the hope that the business model would give providers more time with their patients and also pay for them to be responsible for the improvement of overall health and prevent high-cost medical care.

Sen. Elizabeth Steiner Hayward, D-Beaverton, one of the bill’s chief supporters, said the collaborative would assist the state in knowing how much should be spent on primary care, and acknowledged that simply paying more money under the current payment structure is unsustainable.

But following a precedent given to coordinated care organizations in 2012, and long-term care facilities in 2013, SB 231 gives health plans and healthcare providers an exemption from anti-trust laws in their work related to the collaborative. something Shields said is not only unnecessary but effectively gives these well-heeled healthcare interests legal immunity against illegal business activity such as price fixing.

“Sharing information is not illegal,” Shields said. “The only reason you’d need immunity is to be immunized against activity that is otherwise illegal.”

Former Assistant Attorney General Keith Dubanevich, who specializes in anti-trust laws, said a recent U.S. Supreme Court case made it clear that the state action doctrine that protects businesses who participate in a collaboration is only legal if the state is able to approve or disapprove their business conduct and has supervisory authority based on public records and meetings laws. “If there is not active supervision, then they are not immune,” Dubanevich said.

Those concerns are addressed in this legislation, Steiner Hayward said, by giving the Oregon Health Authority such jurisdiction with full compliance to open government laws.

Significantly, those protections and supervision do not occur with the coordinated care organizations because the Legislature has exempted them from not only anti-trust laws but laws governing public records and public meetings as well and the Oregon Health Authority has only very limited oversight. If challenged in court, the CCOs most likely would lose their anti-trust protection.

The Federal Trade Commission weighed in to Shields’ office opposing the new anti-trust exemption:

“FTC staff is concerned that SB 231A will encourage precisely the types of agreements among competitors that likely would not pass muster under the antitrust laws -- agreements that would reduce competition, raise prices, and provide few or no benefits to consumers. Any effort to shield such harmful agreements from antitrust enforcement, including attempts to confer state action immunity, is likely to harm Oregon healthcare consumers.”

Shields offered an amendment that would strip the bill of the anti-trust protections, and after discussing the matter with legislative counsel, Rep. Mitch Greenlick, D-Portland, delayed a vote on Wednesday until May 27. Greenlick said he would amend the bill to narrow the anti-trust protection, while keeping it in the bill. "The sense is the current exemption is too broad," he said.

The Portland senator said he strongly supported the underlying bill. Backers of SB 231-A, include Dr. Evan Saulino, the former president of the Oregon Academy of Family Physicians, who practices in East Portland. Saulino said that even as Oregon has made great strides in furthering the patient-centered primary care home, some clinics have been forced to cull their support staff because of inconsistent payments.

Lake Oswego pediatrician Dr. Jay Rosenbloom, said a key need for the collaborative was the opaque healthcare business environment, since insurers don’t currently share the information necessary to make system-wide payment reforms.

“They insist everything be budget neutral,” Rosenbloom said. “But we don’t know what their budgets are. We don’t know how they spend their money.”

Dubanevich said there was nothing that anti-trust laws might do to prevent businesses from collaborating on payment structures or sharing price information, using the comparison of a gas station owner who drove around town hoping to undercut his competitors.

Some healthcare players, including CareOregon’s Jeremiah Rigsby, testified against stripping the anti-trust protections and it was unclear how cooperative the healthcare industry might be if they lose this part of the bill.

Aside from the anti-trust portion, CareOregon helps manage four of the state’s 16 CCOs, and Rigsby said his organization wanted the collaborative to involve the CCOs, which have led the way with primary care payment reform with the state Medicaid program, the Oregon Health Plan.

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