Community CarePartners, Inc.

15 U.S.C. § 13c.1
UN ITED STATES OF AM ERICA
FEDERAL TRADE COMMISSION
W ASH IN GTO N , D .C. 20580
Bureau of Competition
Health Care Division
July 2, 2010
Vincent D. Childress, Jr.
Roberts & Stevens, P.A
P.O. Box 7647
Asheville, North Carolina 28802
Re: Community CarePartners, Inc. Advisory Opinion
Dear Mr. Childress:
This letter responds to your request on behalf of Community CarePartners, Inc. (“CarePartners”)
for an advisory opinion concerning whether its proposal to extend sales of discounted
pharmaceutical products to its in-home hospice patients would fall within the scope of the Non-
Profit Institutions Act (NPIA). The NPIA exempts from the Robinson-Patman Act “purchases of
their supplies for their own use by schools, colleges, universities, public libraries, churches,
hospitals, and charitable institutions not operated for profit.” For the reasons explained below,1
we have concluded that CarePartners’ proposal would fall within the scope of the NPIA.
Factual Background
As we understand the facts based on information you provided, CarePartners is a North Carolina
non-profit corporation that offers a full range of post-acute care health services in the Asheville,
North Carolina area. Services offered by CarePartners include inpatient rehabilitation, inpatient
and in-home hospice and palliative care (the “Hospice Program”), and home health and adult day
care services. At its main location in Asheville, CarePartners operates: (1) a licensed
rehabilitation hospital that includes outpatient therapy services; (2) a licensed inpatient hospice
facility and administration of in-home hospice services; (3) a licensed adult day care facility; (4)
administration for licensed home health care services; and (5) administration of licensed private
duty services. These programs are all operated under the management of a single board of
directors and under one tax identification number. The Hospice Program is considered to be
hospital-based for Medicare purposes and operates under a sub-number of the hospital.
CarePartners currently uses NPIA-discounted pharmaceuticals in connection with its treatment
of patients at its inpatient hospice facility. The inpatient facility is used for patients who need

Community CarePartners, Inc. Advisory Opinion
July 2, 2010
Page 2
Letter from Vincent D. Childress, Jr., Roberts & Stevens, to Donald S. Clark, FTC2
(Feb. 26, 2010).
Email from Vincent D. Childress, Jr., Roberts & Stevens, to Ellen Connelly, FTC (Mar.3
30, 2010).
Email from Vincent D. Childress, Jr., Roberts & Stevens, to Ellen Connelly, FTC (Apr.4
15, 2010).
round-the-clock care for symptom control, for short-term respite care, and in end-of-life
situations where the patient requests inpatient care. The primary purpose of the Hospice2
Program, however, is to serve patients in their places of residence, which could be the patient’s
home, a nursing home, or an assisted living facility. The in-home hospice patients currently
receive their medications at a non-discounted rate from CarePartners through a contract with a
local pharmacy. CarePartners would like to extend its use of NPIA-discounted pharmaceuticals3
to the care of these patients.
As you have explained in your correspondence, the decision to enter a patient into hospice care
is made by the patient’s community-based physician. Usually, the community-based physician
will refer a patient to hospice care when it is determined that the patient has a life expectancy of
less than six months and that the patient would benefit from the type of end-of-life care offered
by hospice. For patients who are referred to CarePartners, CarePartners’ staff will assess the
patient to determine if the patient meets the criteria for admission to its Hospice Program.
Patients who meet the criteria for admission are formally admitted as CarePartners’ patients, and
the CarePartners Hospice Inter-Disciplinary Group (which includes a CarePartners employed
hospice physician) creates a plan of care to govern the patient’s treatment.
In most in-home hospice cases, the CarePartners employed physician serves in a consulting role
throughout the patient’s affiliation with CarePartners’ Hospice Program, and works in
conjunction with the patient’s community-based physician. Over the course of the patient’s in-
home hospice treatment, a variety of CarePartners employees, including physicians, nurses,
nurses aides, social workers, and clergy, provide direct and ongoing care to the patient. The
CarePartners staff who treat in-home hospice patients maintain a continuing relationship with the
patients until their death.
Prescription medications required by an in-home hospice patient for symptom control or pain
management related to the terminal illness are reviewed by a CarePartners hospice physician and
identified on the patient’s plan of care. When a patient needs a refill of a current medication, or
if a medication is added by the CarePartners hospice physician, the CarePartners hospice
physician orders it. All medications used in the treatment of the in-home hospice patients are
reviewed by the pharmacist under contract with CarePartners during the biweekly Inter-
Disciplinary Group review.4

Community CarePartners, Inc. Advisory Opinion
July 2, 2010
Page 3
425 U.S. 1 (1976).5
15 U.S.C. § 13c.6
Letter from Vincent D. Childress, Jr., Roberts & Stevens, to Donald S. Clark, FTC7
(Feb. 26, 2010).
425 U.S. 1.8
425 U.S. at 13.9
Analysis
1. Eligibility of CarePartners for Exemption from the Robinson-Patman Act
Under the NPIA
To fall within the NPIA exemption to the Robinson-Patman Act, an organization must be an
“eligible entity” and must use the exemption to purchase supplies for its “own use.” Because5
the NPIA is limited in its application to certain types of “eligible entities,” we begin our analysis
with a discussion of CarePartners’ eligibility for the exemption. Among other “eligible entities,”
the NPIA exempts from the Robinson-Patman Act “hospitals, and charitable institutions not
operated for profit.” As you state in your letter, CarePartners is a non-profit, charitable health-6
care organization. It is an integrated entity; all of its programs, are governed by one board of
directors, and operate under one tax identification number. Thus, by the language of the statute,7
CarePartners, including its Hospice Program, appears to be an entity eligible for the exemption.
Moreover, it is our understanding from your letter that CarePartners already uses the exemption
in connection with its purchase and resale of pharmaceuticals to its inpatients.
2. Pharmaceuticals for CarePartner’s “Own Use”
Having established eligibility for the exemption, the question before us becomes whether
CarePartners may extend its use of NPIA-discounted pharmaceuticals to its in-home hospice
patients without losing the exemption. The answer to this question depends on whether this
proposed use of the NPIA-discounted pharmaceuticals would be for CarePartners’ “own use.”
The principal authority on the meaning and scope of the “own use” test is Abbott Laboratories v.
Portland Retail Druggists Association (Abbott Labs). In that case, retail pharmacies sued8
pharmaceutical manufacturers under the Robinson-Patman Act, challenging the discounted sale
of drugs to non-profit hospitals. The hospitals resold those drugs to patients in a number of
different situations. The Supreme Court held that the NPIA exemption is a limited one, and does
not give hospitals “a blank check” that applies to “whatever new venture the hospital finds
attractive.” Rather, the Court interpreted the “own use” test to shield only purchases that9

Community CarePartners, Inc. Advisory Opinion
July 2, 2010
Page 4
Id. at 14 (emphasis in original).10
See www.carepartners.org (visited Mar. 23, 2010).11
See Elkhart General Hospital, Inc., at 3 (June 13, 1994) (staff opinion) (available at12
http://www.ftc.gov/bc/adops/008.sthm) (“We believe that Elkhart’s provision of services under
its home health program would be considered simply an extension of the hospital’s basic
services beyond its four walls and that therefore pharmaceuticals and other goods purchased for
distribution within the context of the program would be purchased for Elkhart’s own use . . . .”)
In this regard, its patients are similar to the HMO members in DeModena v. Kaiser13
Foundation Health Plan, 743 F.2d 1388 (9 Cir. 1983). There the court held that Kaiser’s saleth
of NPIA-discounted pharmaceuticals to its members was permissible because Kaiser’s intended
institutional function was broadly to provide the full range of health services on an ongoing basis
to its members. CarePartners’ intended institutional function appears similarly broad.
“reasonably may be regarded as use by the hospital in the sense that such use is a part of and
promotes the hospital’s intended institutional operation in the care of persons who are its
patients.”10
As we understand it, CarePartners is dedicated to helping people live fully despite injury, illness,
disability, or age. In furtherance of this mission, it offers a variety of services, including a
rehabilitation hospital, a hospice program, and adult day and home health care. The goal is to11
be able to meet its patients’ needs, whether they are best served in their places of residence or as
inpatients at one of CarePartners’ facilities, and to be able to provide uninterrupted care to those
patients, by following them from hospital to residence as needed. Like the inpatient hospice
patients, the in-home patients are formally admitted to the CarePartners system. Their care
while admitted to CarePartners is managed by the CarePartners Hospice Inter-Disciplinary
Group and provided by CarePartners employees, including CarePartners physicians. In this
regard, the in-home patients differ from the CarePartners’ inpatient hospice patients only by their
place of treatment, and their place of treatment is – above all – a clinical decision made in the
best interest of the patients. The place of treatment may change during the course of the
patients’ care as the condition may improve or worsen, but at all times, the patients are Hospice
Program patients. We do not believe that the patients’ eligibility to receive NPIA-discounted
pharmaceuticals should turn on whether the same medical condition requires inpatient treatment
or allows for in-home care at a particular moment in time. In fact, the ability to follow a patient
over the entire course of the condition – from home to hospital – is, as you have explained, the
primary point of the Hospice Program.12
We conclude, based on these facts, that CarePartners’ central institutional function, within the
meaning of Abbott Labs, is to deliver comprehensive and continuing post-acute health care
services, including pharmaceuticals, to all of its patients. Its patients include the in-home13

Community CarePartners, Inc. Advisory Opinion
July 2, 2010
Page 5
See Elkhart General Hospital (June 1994) (staff opinion); see also North Mississippi14
Health Services, at 1 (Jan. 7, 1998) (staff opinion) (available at
http://www.ftc.gov/bc/adops/normiss2.fin.shtm) (“The hospital’s sales of cancer treatment drugs
to the hospital’s own patients – whether inpatient or outpatient – qualify as the hospital’s ‘own
use’. . . .”)
425 U.S. at 10-11, 14.15
hospice patients. The in-home patients and the inpatient patients are not separate categories of
patients, but rather are all Hospice Program patients, whose conditions may change over time,
thus allowing in-home treatment at some points and requiring hospitalization at others. It would
not make sense to treat these patients differently when they are still admitted to the Hospice
Program, but are temporarily able to be treated in their homes.
The extension of CarePartners’ use of the NPIA-discounted pharmaceuticals to the in-home
hospice setting contributes directly to its ability to fulfill its central institutional function and is
consistent with both Abbott and prior staff advisory opinions. Abbott did not restrict “own use”14
to pharmaceuticals literally consumed on the hospital’s premises. Rather, the important factor15
in Abbott, and thus in this case, was that the pharmaceuticals be used in connection with the
treatment received at the hospital. The Supreme Court found that pharmaceuticals were
purchased for the hospital’s own use when they were resold to hospital inpatients, emergency
room patients, and registered outpatients for consumption on the premises; when they were used
to fill limited “take-home” prescriptions given to hospital inpatients, emergency room patients,
and registered outpatients upon discharge as a continuation of, or supplement to, the treatment
that was administered at the hospital; and when they were dispensed to a hospital employee, a
student, or a non-employee member of the hospital medical staff for his or her own use or the
use of a dependent. Pharmaceuticals dispensed to former patients (through refills of the take-
home prescriptions), sales to non-hospital patients of staff physicians, and sales to walk-in
customers of the hospital pharmacy, however, were deemed insufficiently related to the
hospital’s institutional function and therefore outside the exemption.
Here, in-home hospice patients are CarePartners’ patients clinically and administratively. The
in-home hospice patients are treated by CarePartners staff physicians, and these physicians
maintain an ongoing relationship with the in-home patients until the time of death. The decision
to treat these patients in their place of residence or as inpatients is determined based on clinical
evaluation, cost, and patient comfort. For these reasons, CarePartners’ use of NPIA-discounted
pharmaceuticals in connection with the treatment provided to these patients by the physicians
affiliated with the Hospice Program seems to us to fit squarely within Abbott, by allowing
CarePartners to further its intended institutional function of providing a full continuum of care to
all of its patients. We emphasize, however, that the NPIA exemption is dependent on the
maintenance of an ongoing relationship between CarePartners and the patients. If that

Community CarePartners, Inc. Advisory Opinion
July 2, 2010
Page 6
relationship were to end – for instance if the patient began to see a physician outside of the
CarePartners system for hospice care – the exemption would be lost.
Conclusion
As discussed above, and with the noted caveats, we conclude that CarePartners’ proposal to
extend the sales of discounted pharmaceuticals to its in-home hospice patients as part of its
Hospice Program would fall within the NPIA exemption to the Robinson-Patman Act.
This letter sets out the views of the staff of the Bureau of Competition, as authorized by the
Commission’s Rules of Practice. Under Commission Rule § 1.3(c), 16 C.F.R. § 1.3(c), the
Commission is not bound by this staff opinion and reserves the right to rescind it at a later time.
In addition, this office retains the right to reconsider the questions involved and, with notice to
the requesting party, to rescind or revoke the opinion if implementation of the proposed program
results in substantial anticompetitive effects, if the program is used for improper purposes, if
facts change significantly, or if it otherwise would be in the public interest to do so.
Sincerely,
Markus H. Meier
Assistant Director