Want to merge or buy a practice? The FTC may be watching

The Federal Trade Commission (FTC or Commission) recently published its annual highlights, revealing that health care remains a top priority for the Commission.

The FTC reported that nearly half of its enforcement actions for the preceding five years focused on the health care industry, including pharmaceuticals and medical devices. In particular, Chairwoman Edith Ramirez highlighted the Commission’s appellate victories in the North Carolina State Board of Dental Examiners and the St. Luke’s Health System matters as especially important successes for the agency.

The Annual Highlights indicate where the FTC directs its efforts to preserve competition in health care markets, and can signal where the Commission will target enforcement actions in the coming year. The Commission’s continued success in enforcement actions aimed at the health care industry likely means the agency will maintain similar efforts in 2015.

First, the agency looks to “prevent mergers that would give health care providers leverage to raise rates charged to health care plans for vital services.” Here, the FTC appears particularly concerned about horizontal mergers between provider groups that could substantially reduce competition in the relevant market. According to the FTC, provider groups could use such combinations to obtain enough market power to demand higher reimbursement rates from health plans. Second, the Commission continues its enforcement actions against allegedly anticompetitive conduct by pharmaceutical companies intended to delay introduction of generic or lower-priced versions of a drug, including pay-for-delay schemes, sham litigation, and reverse payment patent settlements.

The 2014 Annual Highlights can be found here.

About the Author

Reed Tinsley CPA

This article is written by Reed Tinsley, a Houston, TX-based CPA with over 30 years of experience advising physicians and medical practices across Texas and the United States. Reed holds certifications as a Certified Valuation Analyst (CVA), Certified Healthcare Business Consultant (CHBC), and Certified Financial Planner (CFP), specializing exclusively in the healthcare sector. He is a published author, nationally recognized speaker, and trusted advisor to physicians on accounting & tax, practice management, and financial planning. Schedule a Free Consultation.