- The Federal Trade Commission is launching a study into certificates of public advantage (COPAs), which are essentially mergers shielded from federal antitrust regulators in exchange for prolonged state oversight. FTC will examine the effects on healthcare prices, quality and access to services.
- The agency has issued seven orders for information seeking data from five insurers (Aetna, Anthem, Blue Cross Blue Shield of Tennessee, Cigna and UnitedHealthcare) and two regional health systems to further study the issue.
- It is seeking to obtain data related to commercial claims, patient billing and employee wages. The scope of the FTC inquiry may also include "other information relevant for analyzing the health systems' prices, quality, access, and innovation," the agency said in a statement Monday.
Research shows that consolidation in the healthcare can lead to higher prices. Yet, some policy experts acknowledge that in parts of the country, particularly rural Appalachia, injecting new competition into the market may not be realistic. They acknowledge that at least a COPA provides some level of oversight.
The FTC is largely focused on studying COPAs in three states — Tennessee, Virginia and West Virginia — that immunized certain health system mergers from federal antitrust scrutiny.
The agency intends to spend the next few years conducting "retrospective analyses" of the health systems that benefit from the COPAs: Ballad Health in Tennessee and Virginia and Cabell Huntington Hospital in West Virginia.
"This project will enhance the agency's knowledge of COPAs and inform future advocacy and enforcement. It will also serve as a resource for state governments and stakeholders who may be considering using COPAs," the FTC said Monday.
Fearful of continued rural hospital closures in their states, lawmakers in Tennessee and Virginia wanted to green light the merger of two health systems. The FTC was adamantly opposed to the merger that would form Ballad Health and warned the combination would result in a near-monopoly.
But as long as the deal was actively supervised, or in other words, regulated by the two states, Tennessee and Virginia were game to approve a law to shelter the deal from antitrust regulators. The merger approval from each state came with conditions, ranging from limits on future price increases to financial commitments to improve access to care and residents' health statuses.
However, examples elsewhere have shown that well-intended policies of some public servants may not be a priority for future politicians.
North Carolina created a COPA more than 20 years ago for the system that would become Mission Health in Asheville. In 2015, the state rescinded its COPA and with it the oversight of Mission Health and its monopoly power. Earlier this year, HCA, one of the nation's largest for-profit hospital chains, purchased Mission for $1.5 billion.
The FTC held a workshop this summer to discuss the price effects of three COPAs approved in the 1990s, which included Mission Health in North Carolina. Public comments from that meeting helped informed the design of the current study, the agency said.