FTC Staff Comment to New York State Senator Ranzenhofer and New York State Assemblyman Abinanti Concerning SB 2647 and AB 2888 Authorizing Certain Agreements for the Creation and Operation of a Health Care Delivery System Network

UNITED STATES OF AMERICA
Federal Trade Commission
WASHINGTON, D.C. 20580
Office of Policy Planning
Bureau of Competition
Bureau of Economics
Northeast Regional Office
June 5, 2015
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The Honorable Michael H. Ranzenhofer
New York State Senate
188 State Street
Legislative Office Building, Room 609
Albany, New York 12247
The Honorable Thomas Abinanti
New York State Assembly
198 State Street
Legislative Office Building, Room 744
Albany, New York 12248
Re: New York Senate Bill 2647 and New York Assembly Bill 2888, Acts to
Amend the Public Authorities Law, in Relation to Authorizing the Erie County
Medical Center Corporation and the Westchester County Health Care
Corporation, respectively, to Enter into Agreements for the Creation and
Operation of a Health Care Delivery System Network
Dear Senator Ranzenhofer and Assemblyman Abinanti:
The staffs of the Federal Trade Commission’s (“FTC” or “Commission”) Office
of Policy Planning, Bureau of Competition, Bureau of Economics, and Northeast
Regional Office1 respectfully submit this letter regarding of the impact of New York
Senate 	Bill 	2647 	(“S-2647”) 	and 	New 	York 	Assembly 	Bill 	2888 	(“A-2888”)
(collectively, “the bills”) on competition for health care services. FTC staff is aware that
the New York Attorney General’s office (“NY AG”) recently submitted a letter opposing
this legislation, 2 and we share its concerns. The proposed bills would authorize Erie
County Medical Center Corporation (“ECMC”) and Westchester County Health Care
Corporation (“WCHC”) to collaborate with other public and private health care providers
and payors. The proposed bills purportedly would provide these health care corporations,
as well as the entities with which they collaborate, with broad immunity from liability
under the federal and state antitrust laws – even though this purported immunity would
cover the kinds of information sharing and joint contract negotiations that are likely to
result in reduced competition and higher prices for consumers. For the reasons described
below, FTC staff urges the New York State Senate and Assembly to reconsider whether
these entities need state action immunity to engage in beneficial collaborative activities.

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FTC staff fully recognizes that collaborations among health care providers often
are procompetitive, and we applaud state efforts to achieve meaningful health care
reforms, including initiatives that lower the costs of health care services, improve their
quality, and expand patient access. We are concerned, however, that the proposed
legislation is based on inaccurate premises regarding the antitrust laws and the value of
competition among health care providers. The FTC recently submitted a public comment
to the New York State Department of Health (“NY DOH”) to express similar concerns
regarding the potential competitive impact of the Certificate of Public Advantage
(“COPA”) applications submitted by three performing provider systems participating in
the Delivery System Reform Incentive Program (“DSRIP”).3
Antitrust 	immunity 	is 	unnecessary 	for 	ECMC 	and 	WCHC 	to 	engage 	in
procompetitive collaborative activities. The antitrust laws are not a barrier to the
formation of efficient health care collaborations that benefit health care consumers, as
explained in extensive guidance issued by the federal antitrust agencies. Indeed, very few
health care provider mergers, joint ventures, or other types of collaborations are
challenged by the federal antitrust agencies. Because procompetitive or competitively
benign health care collaborations already are permissible under the antitrust laws, the
main effect of this legislation is to immunize conduct that would not generate efficiencies
that are greater than consumer harms, and therefore would not pass muster under the
antitrust laws. Therefore, these bills are likely to lead to increased health care costs – in
the form of higher premiums, co-pays, deductibles, and other out-of-pocket expenses –
and decreased access to health care services for New York consumers. As discussed in
greater detail below, this may result from information sharing and joint contract
negotiations among competitors, as well as increased market power through provider
consolidation.
I. 	Interest and Experience of the Federal Trade Commission
Congress has charged the FTC with enforcing the Federal Trade Commission Act,
which prohibits unfair methods of competition and unfair or deceptive acts or practices in
or affecting commerce.4 Competition is at the core of America’s economy,5 and vigorous
competition among sellers in an open marketplace gives consumers the benefits of lower
prices, higher quality goods and services, greater access to goods and services, and
innovation.6 Pursuant to its statutory mandate, the FTC seeks to identify business
practices, 	laws, 	and 	regulations 	that 	may 	impede 	competition 	without 	providing
countervailing benefits to consumers.
Because of the importance of health care competition to the economy and
consumer welfare, anticompetitive conduct in health care markets has long been a key
focus of FTC law enforcement,7 research,8 and advocacy.9 Of particular relevance, the
Commission and its staff have long advocated against federal and state legislative
proposals that seek to create antitrust exemptions for collective negotiations by health
care providers, as such exemptions are likely to harm consumers.10

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II. 	New York Senate Bill 2647 and New York Assembly Bill 2888
These two bills, introduced in the New York state legislature in January 2015, are
intended 	to 	extend 	state 	action 	immunity 	to 	ECMC 	and 	WCHC, 	public 	benefit
corporations created by the New York State Public Authorities Law, 11 as well as any
private and public entities with which they collaborate. These bills are identical to a bill
enacted in June 2013, which conferred state action immunity to the Nassau Health Care
Corporation (“NHCC”) and the entities with which it collaborates.12
Sponsors of the bills claim that ECMC and WCHC have always had the authority
to collaborate with private and public entities under the general and special powers
granted to them under the Public Authorities Law.13 However, following the recent U.S.
Supreme Court decision in FTC v. Phoebe Putney Health System, Inc.,14 the bills “seek[]
to clarify [the state’s] intention that such collaborations may be carried out regardless of
whether they displace competition and may otherwise be considered violations of state or
federal antitrust laws.”15
According to the proposed bills, “the benefits of collaboration by the corporation
outweigh any adverse impact on competition.”16 These purported benefits include
expanding access to health care services, as well as consolidating unneeded or duplicative
health care services, enhancing the quality of health care services, lowering the costs and
improving 	the 	efficiencies 	of 	health 	care 	services, 	and 	achieving 	improved
reimbursement from commercial payors. Based on these alleged benefits, the bills
propose to amend the public authorities law to expressly allow these corporations “to
engage 	in 	collaborative 	activities 	consistent 	with 	[their] 	health 	care 	purposes,
notwithstanding that those collaborations may have the effect of displacing competition
in the provision of hospital, physician or other health care-related services.”17
The bills also discuss the state’s oversight of ECMC and WCHC. However, it is
unclear to what degree the collaborative activities of ECMC and WCHC will be actively
supervised by the state. States may provide antitrust immunity for certain activities when
there is a clearly articulated state policy to displace competition and there is active
supervision of the policy or activity.18 FTC staff takes no position at this time on whether
the amendments contemplated by the bills would satisfy the active supervision prong of
the state action doctrine. According to the language in the bills, it appears that these
corporations would oversee their own operations, with the NY DOH providing some
additional state oversight by reviewing annual reports filed by ECMC and WCHC. 19 The
bills specify that these reports must include information concerning the benefits of
collaboration and disadvantages of reduced competition, as identified by the NY DOH in
its “Restructuring Initiatives in Medicaid Redesign” initiative.20 These reports must also
assess the impact on reimbursement by managed care organizations, particularly the
extent to which negotiated rates “more fairly compensate the corporation’s facilities for
the cost of providing services to commercial enrollees, without cross-subsidy from
Medicaid or other governmental programs.”21 The NY DOH would have 60 days from
the date a report is filed to request that ECMC or WCHC make policy changes to ensure
that the collaborations further the state’s interests.22

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III. 	Concerns Regarding Potential Anticompetitive Effects of New York Senate
Bill 2647 and New York Assembly Bill 2888
FTC staff recognizes the stated need for ECMC and WCHC to collaborate with
other public and private health care providers to improve their ability to deliver high-
quality health care to medically underserved patient populations. Despite what some
health care providers – and proponents of the bills – may claim, however, the antitrust
laws already allow for efficient competitor collaborations in health care markets. FTC
staff is concerned that the proposed legislation may encourage ECMC and WCHC, as
well as any public or private health care providers with whom they choose to collaborate,
to share competitively sensitive information and engage in joint negotiations with payors
in ways that will not yield efficiencies or benefit consumers. These types of activities are
unlikely to further the legitimate public policy goals of health care reform. Indeed, FTC
staff is unaware of any credible economic evidence demonstrating that these types of
activities are likely to lower the cost or improve the quality of health care services, or
expand access to health care services for medically underserved patient populations.
Rather, there is a significant and growing body of empirical economic research showing
that increased consolidation and certain kinds of coordination among health care
providers increase the risk of higher prices without offsetting improvements in quality.23
The bills specifically authorize these corporations “to engage in arrangements,
contracts, information sharing and other collaborative activities[,]” which “may include
without limitation: joint ventures, joint negotiations with physicians, hospitals and
payors, whether such negotiations result in separate or combined agreements; leases;
and/or agreements which involve delivery system network creation and operation[.]” 24
Among the purported benefits of the corporations’ collaborative efforts, as described in
the bills, is “achieving improved reimbursement from non-governmental payors.”25 Thus,
it appears that a goal of the bills is to allow ECMC and WCHC to engage in
collaborations or transactions that improve their bargaining leverage with commercial
payors to increase their reimbursement rates. These higher reimbursement rates are likely
to lead to higher health care costs for employers and commercially insured patients.
Commercially insured patients likely would face higher premiums, co-pays, deductibles,
and 	other 	out-of-pocket 	expenses. 	Self-insured 	employers 	would 	be 	particularly
vulnerable to higher prices because they pay directly for the costs of their employees’
health care claims.
Notwithstanding the bills’ stated goal of improving health care services for
medically underserved patients, it is important to understand that competition among
health care providers benefits all patients, regardless of whether covered by commercial
or governmental programs. FTC staff disagrees with the bills’ suggestion that Medicaid
or other governmental programs can cross-subsidize commercially insured patients.26 In
reality, case-mix-adjusted commercial health care prices are usually higher than Medicaid
or Medicare prices, and there is little evidence of dynamic cost-shifting in either
direction.27 Furthermore, charging higher prices for providing services to commercial
patients is unlikely to benefit Medicaid, Medicare, and uninsured patients. Empirical

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economic literature shows that non-profit hospitals with market power – which ECMC
and WCHC may achieve through many of the activities that purportedly would now be
immunized by the bills – tend to have higher commercial prices and higher costs, the
latter of which can harm non-commercial patients, particularly the uninsured.28 Finally,
economic literature also shows that competition among health care providers usually
leads to higher quality care for all patients.29
Another cause for concern is that, unlike the New York COPA regulations that
were the subject of FTC staff’s recent comment to the NY DOH, 30 the bills do not
expressly preserve the authority of the NY AG to challenge any collaborative activity
undertaken by these public health care entities in the event that the anticompetitive harms
outweigh the potential benefits of coordination. Notwithstanding our overall concerns
with the purported grant of antitrust immunity in the COPA regulations, these bills appear
to confer broader antitrust immunity than the COPA regulations without the same degree
of state oversight and, if needed, remedial authority.
Finally, FTC staff has concerns that, as written, these bills may be construed to
purport to grant antitrust immunity when ECMC and WCHC collaborate with private or
public entities located outside of New York, even if neighboring states have not
themselves attempted to confer antitrust immunity to health care collaboratives. Such
geographically unbound antitrust immunity would cause FTC staff to further question
whether this legislation is appropriately tailored to further New York’s legitimate public
policy goals.
IV. 	Legislation Is Unnecessary Because the Antitrust Laws Already Permit
Efficient Health Care Collaborations
The proposed legislation appears to be based on two fundamentally flawed
premises: that efficient, procompetitive collaborations among otherwise independent
health care providers are prohibited under the antitrust laws, and that antitrust immunity
is necessary to encourage such collaborations.
The antitrust laws already recognize, and, indeed, have long stood for the
proposition that competitor collaborations can be procompetitive. As explained in
numerous sources of guidance issued by the federal antitrust agencies,31 this position
extends to collaborations among competing health care providers. FTC officials have
recently emphasized that “[t]he FTC supports the key aims of health care reform, and . . .
recognize[s] that collaborative and innovative arrangements among providers can reduce
costs, improve quality, and benefit consumers. But these goals are best achieved when
there is healthy competition in provider markets fostering the sort of dynamic, high-
quality, and innovative health care that practitioners seek and patients deserve.”32 The
federal antitrust agencies have challenged very few of the thousands of health care
provider mergers, joint ventures, and other types of collaborations that have occurred in
recent years, and have “brought those challenges only after rigorous analysis of market
conditions showed that the acquisition was likely to substantially lessen competition.”33

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Moreover, the goals of antitrust are consistent with the goals of the Patient
Protection and Affordable Care Act (“ACA”),34 and health care reform efforts more
generally. Despite what some health care industry participants have claimed, the antitrust
laws do not prohibit the kinds of collaboration necessary to achieve the health care
reforms contemplated by the ACA. 35 Specifically, antitrust is not a barrier to New York
health care providers who seek to form procompetitive collaborative arrangements that
are likely to reduce costs and benefit health care consumers through increased efficiency
and improved coordination of care. Indeed, the antitrust agencies seek only to prevent
mergers and other collaborations when there is substantial anticompetitive harm and
when that harm is not offset by likely procompetitive benefits of the transaction,
including reduced costs, higher quality, and increased access to care.
V. 	Antitrust Exemptions That Immunize Otherwise Anticompetitive Conduct
Pose a Substantial Risk of Consumer Harm and Are Disfavored
Because antitrust law permits procompetitive collaborations among health care
providers, 	no 	special 	“exemption” 	or 	“immunity” 	from 	existing 	antitrust 	laws 	is
necessary to ensure that such procompetitive or competitively benign collaborations
occur. The U.S. Supreme Court recently reiterated its long-standing position that “the
antitrust laws’ values of free enterprise and economic competition” make such special
exemptions or immunities “disfavored.”36 There is no reason to treat the health care
industry differently with regard to application of the antitrust laws. Indeed, in the health
care industry, just like in other industries, consumers benefit from vigorous competition
and are harmed by anticompetitive conduct and transactions.37
Health care providers have repeatedly sought antitrust immunity for various forms
of joint conduct, including agreements on the prices they will accept from payors,
asserting that immunity for joint bargaining is necessary to “level the playing field” so
that providers can create and exercise countervailing market power. 38 In a 2004 report on
health care competition, the federal antitrust agencies jointly responded to and countered
this argument, explaining that antitrust exemptions “are likely to harm consumers by
increasing costs without improving quality of care.”39 In its 2007 report, the bipartisan
Antitrust Modernization Commission succinctly stated a widely recognized proposition:
“[t]ypically, 	antitrust 	exemptions 	create 	economic 	benefits 	that 	flow 	to 	small,
concentrated interest groups, while the costs of the exemption are widely dispersed,
usually passed on to a large population of consumers through higher prices, reduced
output, lower quality and reduced innovation.”40 In other words, antitrust exemptions
threaten broad consumer harm while benefitting only certain market participants.
FTC officials further have noted that state legislation aimed at exempting health
care providers engaging in collaborative activities from antitrust scrutiny may “encourage
providers to negotiate collectively with health plans in order to extract higher rates, in
effect allowing providers to fix their prices. By permitting conduct that would ordinarily
violate antitrust laws, the bills would lead to higher prices and lower-quality care –
undercutting the very objectives they aim to achieve.”41 While FTC officials have
acknowledged that “[c]ollaboration designed to promote beneficial integrated care can

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benefit consumers,” they also have warned that “collaboration that eliminates or reduces
price competition or allows providers to gain increased bargaining leverage with payors
raises significant antitrust concerns. Antitrust concerns can arise if integration involves a
substantial portion of the competing providers of any particular service or specialty[.]”42
We note that NHCC, ECMC, and WCHC all participate in performing provider systems
under the DSRIP program, and all of these systems appear to involve substantial portions
of competing health care providers in their respective geographic regions,43 thereby
increasing the potential for anticompetitive harm.
Given that efficient collaborations among health care providers likely to benefit
consumers are already consistent with the antitrust laws, FTC staff is concerned that these
bills will encourage precisely the types of agreements among competitors that likely
would not pass muster under the antitrust laws – conduct that would reduce competition,
raise prices, and provide few or no benefits to consumers. Any effort to shield such
harmful conduct from antitrust enforcement, including attempts to confer state action
immunity, is likely to harm New York health care consumers.
VI. 	Conclusion
In summary, FTC staff believes that the antitrust immunity contemplated by the
proposed bills is unnecessary to facilitate procompetitive collaborations, and is concerned
that the bills are likely to foster anticompetitive conduct to the detriment of New York
health care consumers. FTC staff urges the New York State Senate and Assembly to
carefully consider whether antitrust immunity – especially the broad immunity these bills
purport to grant – would further legitimate public policy goals or, instead, result in higher
prices for consumers without any offsetting improvements to health care quality and
access.
As 	always, 	the 	FTC 	will 	investigate 	and 	challenge 	transactions 	that 	are
anticompetitive. In addition, we will continue to challenge defenses based on asserted
state action immunity where the state fails to provide adequate active supervision.
Respectfully submitted,
Marina Lao, Director 	Francine Lafontaine, Director
Office of Policy Planning 	Bureau of Economics
Deborah L. Feinstein, Director 	William H. Efron, Director
Bureau of Competition 	Northeast Regional Office

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1 This letter expresses the views of the FTC’s Office of Policy Planning, Bureau of
Competition, Bureau of Economics, and Northeast Regional Office. The letter does not
necessarily represent the views of the Commission or of any individual Commissioner.
The Commission has, however, voted to authorize staff to submit these comments.
2 See Dan Goldberg, Senate Passes Antitrust Bill Despite A.G.'s Concern, CAPITAL NEW
YORK (Jun. 1, 2015), http://www.capitalnewyork.com/article/albany/2015/06/8569185/
senate-passes-antitrust-bill-despite-ags-concern.
3 See FTC Staff Comment to New York State Department of Health, Concerning
Certificate of Public Advantage Applications, Intended to Exempt Performing Provider
Systems from the Antitrust Laws (Apr. 2015), https://www.ftc.gov/system/files/
documents/advocacy_documents/ftc-staff-comment-center-health-care-policy-resource-
development-office-primary-care-health-systems/150422newyorkhealth.pdf.
4 Federal Trade Commission Act, 15 U.S.C. § 45.
5 Standard Oil Co. v. FTC, 340 U.S. 231, 248 (1951) (“The heart of our national
economic policy long has been faith in the value of competition.”).
6 See Nat’l Soc. of Prof. Eng’rs v. United States, 435 U.S. 679, 695 (1978) (The antitrust
laws reflect “a legislative judgment that ultimately competition will produce not only
lower prices, but also better goods and services. . . . The assumption that competition is
the best method of allocating resources in a free market recognizes that all elements of
a bargain – quality, service, safety, and durability – and not just the immediate cost, are
favorably affected by the free opportunity to select among alternative offers.”).
7 See generally FED. TRADE COMM’ N, OVERVIEW OF FTC ANTITRUST ACTIONS IN
HEALTH CARE SERVICES AND PRODUCTS (Mar. 2013), https://www.ftc.gov/sites/default/
files/attachments/competition-policy-guidance/hcupdate.pdf. See also Competition in
the Health Care Marketplace, FED. TRADE COMM ’ N, https://www.ftc.gov/tips-advice/
competition-guidance/industry-guidance/health-care (“Cases”).
8 See, e.g., FED. TRADE C OMM’ N & U.S. DEP ’ T OF J USTICE , I MPROVING HEALTH CARE : A
DOSE OF COMPETITION (2004), https://www.ftc.gov/sites/default/files/documents/
reports/improving-health-care-dose-competition-report-federal-trade-commission-and-
department-justice/040723healthcarerpt.pdf [hereinafter FTC & DOJ, IMPROVING
HEALTH CARE ]. The report was based on, among other things, 27 days of formal
hearings on competitive issues in health care, an FTC sponsored workshop,
independent research, and the Agencies’ enforcement experience. See also FTC-DOJ
workshop series, Examining Health Care Competition, Mar. 20-21, 2014 and Feb. 24-
25, 2015, https://www.ftc.gov/news-events/events-calendar/2015/02/examining-health-
care-competition.
9 FTC and staff advocacy may comprise letters or comments addressing specific policy
issues, Commission or staff testimony before legislative or regulatory bodies, amicus
briefs, or reports.
10 See, e.g., FTC Staff Comment to Sen. John J. Bonacic, N.Y. State Senate, Concerning
N.Y. Senate Bill S.3186-A, Intended to Permit Collective Negotiations by Health Care
Providers (Oct. 2011), https://www.ftc.gov/sites/default/files/documents/
advocacy_documents/ftc-staff-comment-honorable-john-j.bonacic-concerning-new-

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york-s.b.3186-allow-health-care-providers-negotiate-collectively-health-
plans/111024nyhealthcare.pdf; FTC Staff Comment to Sen. Chip Shields, Or. State
Legislature, Concerning S.B. 231-A, Intended to Exempt Certain Collaborations
Among Competing Health Care Providers and Payers Participating in a Primary Care
Transformation Initiative (May 2015), https://www.ftc.gov/system/files/documents/
advocacy_documents/ftc-staff-comment-regarding-oregon-senate-bill-231a-which-
includes-language-intended-provide-federal/150519oregonstaffletter.pdf; FTC Staff
Comment to Sen. Catherine Osten and Rep. Peter Tercyak, Conn. Gen. Assembly,
Concerning H.B. 6431, Intended to Exempt Health Care Collaboratives from the
Antitrust Laws (June 2013), https://www.ftc.gov/sites/default/files/documents/
advocacy_documents/ftc-staff-comment-connecticut-general-assembly-labor-and-
employees-committee-regarding-connecticut/130605conncoopcomment.pdf; FTC Staff
Comment to Sens. Coleman and Kissel and Reps. Fox and Hetherington, Conn. Gen.
Assembly, Concerning Connecticut H.B. 6343, Intended to Exempt Members of
Certified Cooperative Arrangements from the Antitrust Laws (June 2011),
https://www.ftc.gov/sites/default/files/documents/advocacy_documents/ftc-staff-
comment-senatorscoleman-andkissel-and-representativesfox-and-hetherington-
concerning.b.6343intended-toexempt-members-certified-cooperative-arrangements-
antitrust-laws/110608chc.pdf; FTC Staff Comment to the Hon. Elliott Naishtat
Concerning Tex. S.B. 8 to Exempt Certified Health Care Collaboratives from the
Antitrust Laws (May 2011), https://www.ftc.gov/sites/default/files/documents/
advocacy_documents/ftc-staff-comment-hon.elliot-naishtat-concerning-texas-s.b.8-
exempt-certified-health-care-collaboratives-antitrust-laws/1105texashealthcare.pdf;
FTC Staff Comment to Rep. Tom Emmer of the Minn. House of Reps. Concerning
Minn. H.F. No. 120 and Senate Bill S.F. No. 203 on Health Care Cooperatives (Mar.
2009), https://www.ftc.gov/sites/default/files/documents/advocacy_documents/ftc-
staff-comment-representative-tom-emmer-minnesota-house-representatives-
concerning-minnesota-ok-h.f.no.120-and-senate-bill-s.f.no.203-health-care-
cooperatives/v090003.pdf; FTC Staff Comment to the Hon. William J. Seitz
Concerning Ohio Executive Order 2007-23S to Establish Collective Bargaining for
Home Health Care Workers (Feb. 2008), https://www.ftc.gov/sites/default/files/
documents/advocacy_documents/ftc-staff-comment-hon.william-j.seitz-concerning-
ohio-executive-order-2007-23s-establish-collective-bargaining-home-health-
care/v080001homecare.pdf; FTC Staff Comment before the P.R. House of Reps.
Concerning S.B. 2190 to Permit Collective Bargaining by Health Care Providers (Jan.
2008), https://www.ftc.gov/sites/default/files/documents/advocacy_documents/ftc-
staff-comment-puerto-rico-house-representatives-concerning-s.b.2190-permit-
collective-bargaining-health-care-providers/v080003puerto.pdf. All advocacies are
available at https://www.ftc.gov/policy/advocacy/advocacy-filings.
11 N.Y. PUB. A UTH. LAW §§ 3300-3321 (2015) (“Title 1: Westchester County Health Care
Corporation”); id. §§ 3625-3646 (“Title 6: Erie County Medical Center Corporation”).
12 See S.B. 4624, 2013-2014 Leg., Reg. Sess. (N.Y. 2013) (same as New York Assembly
Bill 7993-A). FTC staff learned of this legislation after it had passed. In October 2013,
the Governor of New York signed S-4624/A-7993 into law. The NY AG opposed this
bill as unnecessary and overbroad. See Memorandum Regarding New York Assembly

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Bill 7993-A, from Harlan A. Levy, Chief Deputy Attorney General and Counsel to the
Attorney General, to Mylan L. Denerstein, Counsel to the Governor of New York
(Aug. 13, 2013). Interestingly, the Nassau University Medical Center DSRIP PPS
(which is affiliated with NHCC) stated its intention to apply for a COPA to protect
itself from regulatory challenges based on antitrust laws. See Nassau University
Medical Center DSRIP PPS Organizational Application 9 (Dec. 22, 2014),
https://www.health.ny.gov/health_care/medicaid/redesign/dsrip/pps_applications/docs/
nassau_university_medical_center/nassau_queens_organizational_application.pdf. This
antitrust exemption would presumably be in addition to the broad exemption already
purportedly conferred to NHCC under S-4624/A-7993.
13 See New York State Senate Memorandum In Support Of Legislation S-2647, submitted
by Sen. Ranzenhofer; New York State 	Assembly Memorandum In Support Of
Legislation A-2888, submitted by Rep. Abinanti. However, although the current Public
Authorities 	Law 	states 	that 	ECMC 	has 	the 	ability 	to 	participate 	in 	“joint 	and
cooperative arrangements for the provision of general comprehensive and specialty
health care services” and WCHC has the ability to “[t]o provide health and medical
services for the public directly or by agreement or lease with any person, firm or
private or public corporation or association through or in the health facilities of the
corporation or otherwise[,]” there are no provisions that allow them to collaborate with
private and public entities in violation of the antitrust laws. N.Y. PUB. AUTH. LAW §§
3306.2, 3621.5 (2015).
14 FTC v. Phoebe Putney Health Sys., Inc., 133 S. Ct. 1003 (2013).
15 New York State Senate Memorandum In Support Of Legislation S-2647, supra note
13.
16 S.B. 2647, 2015-2016 Leg., Reg. Sess. § 1 (N.Y. 2015) (amending § 3626 of New
York public authorities law); A.B. 2888, 2015-2016 Leg., Reg. Sess. § 1 (amending §
3301 of New York public authorities law).
17 S.B. 2647 § 1; A.B. 2888 § 1.
18 See Parker v. Brown, 317 U.S. 341 (1943); Phoebe Putney, 133 S. Ct. at 1003 (2013);
and North Carolina State Bd. of Dental Exam’rs v. FTC, 135 S. Ct. 1101 (2015).
19 S.B. 2647 § 2 (amending § 3631 of New York public authorities law); A.B. 2888 § 2
(amending § 3306 of New York Public Authorities Law).
20 N.Y. STATE DEP ’ T OF HEALTH, RESTRUCTURING I NITIATIVES IN M EDICAID REDESIGN,
REQUEST FOR APPLICATIONS § 7 (2011), http://www.health.ny.gov/funding/rfa/inactive/
1111091042/1111091042.pdf (“§ 7 Competition and Antitrust Concerns” references
the state budget legislation and NY DOH COPA regulations).
21 S.B. 2647 § 2; A.B. 2888 § 2.
22 S.B. 2647 § 2; A.B. 2888 § 2.
23 See, e.g., Jeff Goldsmith, Lawton R. Burns, Aditi Sen, & Trevor Goldsmith, Integrated
Delivery Networks: In Search of Benefits and Market Effects, NAT ’ L ACAD. OF SOCIAL
I NSURANCE (Feb. 2015), http://www.nasi.org/sites/default/files/research/
Integrated_Delivery_Networks_In_Search_of_Benefits_and_Market_Effects.pdf;

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Katherine Baicker & Helen Levy, Coordination versus Competition in Health Care
Reform, 369 NEW ENG. J. M ED. 789 (2013), available at http://www.nejm.org/
doi/full/10.1056/NEJMp1306268; Martin Gaynor & Robert Town, The Impact of
Hospital Consolidation – Update (Robert Wood Johnson Found., Synthesis Project
Report, June 2012), http://www.rwjf.org/content/dam/farm/reports/issue_briefs/
2012/rwjf73261; Paul B. Ginsburg, Wide Variation in Hospital and Physician Payment
Rates Evidence of Provider Market Power, Center for Studying Health System Change,
Research Brief No. 16 (Nov. 2010), http://www.hschange.com/CONTENT/1162/;
Robert A. Berenson, Paul B. Ginsburg & Nicole Kemper, Unchecked Provider Clout in
California Foreshadows Challenges to Health Reform, 29 HEALTH AFFAIRS 699
(2010), available at http://content.healthaffairs.org/content/29/4/699.full; Lawton
Robert Burns & Ralph W. Muller, Hospital-Physician Collaboration: Landscape of
Economic Integration and Impact on Clinical Integration, 86 M ILBANK Q. 375 (2008),
available at http://onlinelibrary.wiley.com/doi/10.1111/j.1468-0009.2008.00527.x/
epdf; William B. Vogt & Robert Town, How has hospital consolidation affected the
price and quality of hospital care? (Robert Wood Johnson Found. Synthesis Project
Report, Feb. 2006), http://www.rwjf.org/files/research/no9researchreport.pdf; Cory
Capps & David Dranove, Hospital Consolidation & Negotiated PPO Prices, 23
HEALTH AFFAIRS 175 (2004), available at http://content.healthaffairs.org/content/23/2/
175.full.
24 S.B. 2647 § 2; A.B. 2888 § 2.
25 S.B. 2647 § 1; A.B. 2888 § 1.
26 See supra note 21 and accompanying text.
27 For a review of the economic literature on this subject, see Austin Frakt, Hospitals Are
Wrong About Shifting Costs to Private Insurers, THE I NCIDENTAL ECONOMIST (Mar.
25, 2015), http://theincidentaleconomist.com/wordpress/hospitals-are-wrong-about-
shifting-costs-to-private-insurers/.
28 See Jeffrey Stensland, Zachary R. Gaumer, & Mark E. Miller, Private-Payer Profits
Can Induce Negative Medicare Margins, 29 HEALTH AFFAIRS 1045 (2010), available
at http://content.healthaffairs.org/content/early/2010/03/18/hlthaff.2009.0599.full.
Under the Patient Protection and Affordable Care Act, prices that non-profit hospitals
charge to uninsured patients eligible for financial assistance can be no more than
“amounts generally billed to insured patients.” See infra note 34, at § 9007; Sara
Rosenblum, Additional Requirements For Charitable Hospitals: Final Rules On
Community Health Needs Assessments And Financial Assistance, HEALTH AFFAIRS
BLOG (Jan. 23, 2015), http://healthaffairs.org/blog/2015/01/23/additional-requirements-
for-charitable-hospitals-final-rules-on-community-health-needs-assessments-and-
financial-assistance/. Therefore, hospitals with market power that negotiate higher
commercial prices can also charge higher prices to uninsured patients.
29 See supra note 23.
30 See supra note 3.
31 To assist the business community in distinguishing between lawful and potentially
harmful forms of competitor collaboration, the FTC and its sister federal antitrust

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agency, the DOJ, have issued considerable guidance over the years. Key sources of
guidance include the Agencies’ general guidelines on collaborations among
competitors, as well as joint statements specifically addressing the application of the
antitrust laws to the health care industry, including physician network joint ventures
and other provider collaborations. FED. TRADE COMM’ N & U.S. DEP ’ T OF J USTICE ,
ANTITRUST GUIDELINES FOR COLLABORATIONS A MONG COMPETITORS (2000),
https://www.ftc.gov/sites/default/files/documents/public_events/joint-venture-hearings-
antitrust-guidelines-collaboration-among-competitors/ftcdojguidelines-2.pdf; U.S.
DEP ’ T OF J USTICE & FED. TRADE COMM’ N, STATEMENTS OF ANTITRUST ENFORCEMENT
POLICY I N HEALTH CARE (1996), https://www.ftc.gov/sites/default/files/documents/
reports/revised-federal-trade-commission-justice-department-policy-statements-health-
care-antritrust/hlth3s.pdf (see, e.g., id. at Statement 8 regarding physician network joint
ventures, Statement 7 regarding joint purchasing arrangements among providers of
health care services, and Statement 6 regarding provider participation in exchanges of
price and cost information).
In addition, FTC staff has issued and made public numerous advisory opinion letters
containing detailed analyses of specific proposed health care collaborations. These
letters have helped the requesting parties avoid potentially unlawful conduct as they
seek to devise new ways of responding to the demands of the marketplace. They also
have provided further guidance to the health care industry as a whole. See, e.g., Letter
from Markus H. Meier, Fed. Trade Comm’n, to Michael E. Joseph, Esq., McAfee &
Taft, Re: Norman PHO Advisory Opinion, Feb. 13, 2013, https://www.ftc.gov/sites/
default/files/documents/advisory-opinions/norman-physician-hospital-organization/
130213normanphoadvltr_0.pdf; Letter from Markus H. Meier, Fed. Trade Comm’n, to
Christi Braun, Ober, Kaler, Grimes & Shriver, Re: TriState Health Partners, Inc.
Advisory Opinion, Apr. 13, 2009, https://www.ftc.gov/sites/default/files/documents/
advisory-opinions/tristate-health-partners-inc./090413tristateaoletter.pdf; Letter from
Markus Meier, Fed. Trade Comm’n, to Christi Braun & John J. Miles, Ober, Kaler,
Grimes & Shriver, Re: Greater Rochester Independent Practice Association, Inc.
Advisory Opinion, Sept. 17, 2007, https://www.ftc.gov/sites/default/files/documents/
advisory-opinions/greater-rochester-independent-practice-association-inc./gripa.pdf.
32 Edith Ramirez, Antitrust Enforcement in Health Care – Controlling Costs, Improving
Quality, 371 NEW ENG. J. M ED. 2245 (2014), http://www.nejm.org/doi/pdf/10.1056/
NEJMp1408009. See also Deborah L. Feinstein, Dir., Bureau of Competition, Remarks
at the Fifth National Accountable Care Organization Summit in Washington, DC:
Antitrust Enforcement in Health Care: Proscription, not Prescription (June 19, 2014),
https://www.ftc.gov/system/files/documents/public_statements/409481/
140619_aco_speech.pdf (“We continue to hear claims that antitrust principles are at
odds with the mandates of the Affordable Care Act. I believe these arguments
misunderstand the focus and intent of federal antitrust enforcement. . . . In the final
analysis, our actions make clear the important role of antitrust in health care policy.
Ultimately, we believe that the imperatives of developing lower cost, higher quality
health care can coexist with continued enforcement of the antitrust laws.”);
Commissioner Julie Brill, Fed. Trade Comm’n, Keynote Address at the Catalyst For
Payment Reform 2013 National Summit on Provider Market Power: Promoting

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Healthy Competition in Health Care Markets: Antitrust, the ACA, and ACOs (June 11,
2013), https://www.ftc.gov/sites/default/files/documents/public_statements/promoting-
healthy-competition-health-care-markets-antitrust-aca-and-acos/130611cprspeech.pdf
(“By serving as a watchdog against anticompetitive conduct, antitrust promotes market
behavior that creates efficiencies and benefits consumers.”).
33 Feinstein, supra note 32. From 2002 to 2012, the Commission challenged six hospital
mergers out of 970 total hospital transactions, less than one percent. See Greg
Koonsman, Analyzing the Health System Market, VMG Health 24 (Oct. 24, 2013),
http://www.vmghealth.com/Downloads/BeckerASCKoonsman2013.pdf.
34 Pub. L. No. 111-148, § 3022, 124 Stat. 119, 395 (2010).
35 See, e.g. FED. TRADE C OMM’ N & U.S. DEP ’ T OF J USTICE STATEMENT OF ANTITRUST
ENFORCEMENT POLICY R EGARDING A CCOUNTABLE CARE ORGANIZATIONS
PARTICIPATING IN THE MEDICARE SHARED SAVINGS PROGRAM, 76 Fed. Reg. 67026
(Oct. 28, 2011), http://www.gpo.gov/fdsys/pkg/FR-2011-10-28/pdf/2011-27944.pdf.
See also Brill, supra note 32 (“Antitrust law permits providers to engage in a wide
array of legitimate collaborative activities, including ACO [Accountable Care
Organization] arrangements, as well as many mergers and consolidations, so long as
the conduct is likely to promote consumer welfare through lower cost or improved
quality.”).
36 FTC v. Phoebe Putney Health Sys., Inc., 133 S. Ct. 1003, 1010 (2013) (quoting FTC v.
Ticor Title Ins. Co., 504 U.S. 621, 636 (1992)). See also North Carolina State Bd. of
Dental Exam’rs v. FTC, 135 S. Ct. 1101, 1117 (2015) (“The Sherman Act protects
competition while also respecting federalism. It does not authorize the States to
abandon markets to the unsupervised control of active market participants, whether
trade associations or hybrid agencies. If a State wants to rely on active market
participants as regulators, it must provide active supervision if state-action immunity
under Parker is to be invoked.”).
37 Phoebe Putney, 133 S. Ct. at 1015 (state legislature’s objective of improving access to
affordable health care does not logically suggest contemplation of anticompetitive
means, and “restrictions [imposed upon hospital authorities] should be read to suggest
more modest aims.”). As the U.S. Court of Appeals for the Fourth Circuit has observed,
“[f]orewarned by the [Supreme Court’s] decision in National Society of Professional
Engineers . . . that it is not the function of a group of professionals to decide that
competition is not beneficial in their line of work, we are not inclined to condone
anticompetitive conduct upon an incantation of ‘good medical practice.’” Va. Acad. of
Clinical Psychologists v. Blue Shield of Va., 624 F.2d 476, 485 (4th Cir. 1980).
38 In general, the Supreme Court has flatly rejected the notion that members of the learned
professions should be free from antitrust scrutiny: “The nature of an occupation,
standing alone, does not provide sanctuary from the Sherman Act . . . nor is the public-
service aspect of professional practice controlling in determining whether § 1 includes
professions.” Goldfarb v. Va. State Bar, 421 U.S. 773, 787 (1975). See also Nat’l Soc.
of Prof. Eng’rs v. United States, 435 U.S. 679, 695 (1978) (Supreme Court rejection of
argument that competition itself poses a “potential threat . . . to the public safety”);
FTC v. Indiana Fed’n of Dentists, 476 U.S. 447 (1986).

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39 FTC & DOJ, I MPROVING HEALTH CARE , supra note 8, at 14.
40 ANTITRUST M ODERNIZATION COMM’ N, REPORT AND RECOMMENDATIONS 335 (2007),
http://govinfo.library.unt.edu/amc/report_recommendation/amc_final_report.pdf.
41 Ramirez, supra note 32.
42 Feinstein, supra note 32. There is a significant and ever-growing body of empirical
research showing that increased concentration among health care providers results in
higher prices without offsetting improvements in quality. See, e.g., Martin Gaynor &
Robert Town, The Impact of Hospital Consolidation – Update (Robert Wood Johnson
Found., Synthesis Project Report, June 2012), http://www.rwjf.org/content/dam/farm/
reports/issue_briefs/2012/rwjf73261.
43 See Nassau University Medical Center DSRIP PPS Organizational Application 25-26
(Dec. 22, 2014), https://www.health.ny.gov/health_care/medicaid/redesign/dsrip/
pps_applications/docs/nassau_university_medical_center/nassau_queens_organizationa
l_application.pdf (stating that this PPS would include all 15 hospitals in this region, as
well as a substantial portion of ambulatory surgical centers, primary care providers,
specialty care providers, rehabilitative and behavioral health services facilities, and
skilled nursing facilities); Millennium Collaborative Care DSRIP PPS (ECMC)
Organizational Application 14 (Dec. 22, 2014), https://www.health.ny.gov/
health_care/medicaid/redesign/dsrip/pps_applications/docs/erie_county/millenium_coll
aborative_care__pps_org_app.pdf (stating that the Millennium Collaborative Care LLC
will be a wholly-owned subsidiary of Erie County Medical Center Corporation, the
lead entity in the PPS), id. at 17 (“All providers in the region have been invited to
participate in the PPS, including the Catholic Medical Partners PPS and Finger Lakes
PPS.”), id. at 27-28 (throughout western New York, there are 22 acute care hospitals,
10 of which are in the MCC PPS; 74 nursing home facilities, 41 of which are in the
MCC PPS; in addition, MCC PPS will include all of the urgent care centers, health
homes, rehabilitative and behavioral health services facilities, specialty medical
programs, home care services, and managed care organizations, and more than half of
the ambulatory surgical centers, federally qualified health centers, primary care and
specialty medical providers, laboratory and radiology services, and pharmacies); and
Westchester Medical Center DSRIP PPS Organizational Application 26-27, 33 (Dec.
22, 2014), https://www.health.ny.gov/health_care/medicaid/redesign/dsrip/
pps_applications/docs/westchester_medical_center/westchester_org_app.pdf (it appears
that this PPS covers 8 counties in the Hudson Valley region, and may include lower
percentages of health care providers than the PPS networks associated with NHCC and
ECMC, with 11 of 51 hospitals, 1,868 of 5,048 primary care providers, and 1,551 of
43,460 specialty care providers).