Photo of David Garcia

David Garcia

Subscribe to David Garcia's Posts

David Garcia is a partner in the Antitrust and Competition Practice Group in the firm's Century City office.

Contact:Read more about David Garcia

What Happened?

On Friday, February 3, the Department of Justice, Antitrust Division (the “DOJ”) announced its withdrawal of three policy statements on health care antitrust enforcement: (1) The Department of Justice and Federal Trade Commission Antitrust Enforcement Policy Statements in the Healthcare Area (Sept. 15, 1993); (2) The Department of Justice and Federal Trade Commission Statements of Antitrust Enforcement Policy in Healthcare (Aug. 1, 1996); and (3) The Department of Justice and Federal Trade Commission Statement of Antirust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program (Oct. 20, 2011) (together, the “Healthcare Statements”). It has been reported that the Federal Trade Commission (the “FTC”), which shares antitrust enforcement authority with the DOJ (together the “Agencies”), intends to withdraw the Healthcare Statements as well. Assuming the FTC follows the DOJ’s lead, the withdrawal of the Healthcare Statements may be the most significant antitrust enforcement development under the Biden Administration to date and is likely the most significant healthcare antitrust development in decades.Continue Reading Department of Justice Withdraws Key Healthcare Antitrust Policy Statements

The Sixth Circuit Court of Appeal recently voiced skepticism of Kentucky’s Certificate of Need (“CON”) laws while simultaneously ruling that they met the Fourteenth Amendment’s “rational basis” test.[1]
Continue Reading Sixth Circuit Questions Efficacy of State “Certificate of Need” Laws, Question Whether Reduces Competition

As it continues to grapple with the COVID-19 pandemic, the healthcare sector will face increased antitrust scrutiny from the Biden administration, with the Federal Trade Commission (the “FTC”) and Department of Justice, Antitrust Division (the “DOJ”) (together the “Agencies”) as the Agencies ramp up their reviews not just of “horizontal” transactions (i.e., deals between competitors), but also of “vertical” transactions (i.e., deals that combine market participants at different levels of the healthcare industry, such as payors, hospitals, and physician practices).
Continue Reading Vertical Deals in Healthcare: Key Antitrust Takeaways for Private Equity Firms

On April 4, 2020,  the Department of Justice issued a business review letter allowing collaboration among five distributors of personal-protective equipment (“PPE”), oxygen, and medications. This is the first business review letter issued under the expedited review procedure for streamlining pandemic-related public health efforts issued jointly by the Federal Trade Commission and DOJ on March 24, 2020 (as previously reported here and here). The DOJ turned the request for review around in only five days, but offered few new insights into how the agencies might weigh public-health considerations against potential competitive harms.
Continue Reading DOJ Issues First Business Review Letter Approving Competitor Collaboration In Response To COVID-19

On January 23, 2019, the U.S. Court of Appeals for the Third Circuit (“Third Circuit”) issued an opinion denying the Commonwealth of Pennsylvania the right to recover attorney’s fees after it had successfully blocked a hospital merger. The Third Circuit determined that the state had no federal statutory basis to be awarded attorney’s fees since the injunction had been granted under Section 13(b) of the Federal Trade Commission Act (“FTC Act”), which does not provide for attorneys’ fees, rather than Section 16 of the Clayton Act.

This case establishes binding precedent in the Third Circuit that state attorneys general will only have standing to seek attorneys’ fees in antitrust actions under the Clayton Act when the state actually litigates the case under that section. It also potentially has broader implications if other circuits decide to look to this decision as persuasive authority when deciding similar cases in their jurisdictions.
Continue Reading Third Circuit Rejects State’s Bid for Attorney’s Fees in Hospital Merger Dispute

On December 12, 2018, the Eleventh Circuit Court of Appeals denied defendants Blue Cross Blue Shield Association’s interlocutory appeal of a District Court decision to analyze BCBS’s geographic market distribution system under the per se rule rather than the rule of reason. Judge R. David Proctor of the Northern District of Alabama certified BCBS’s interlocutory appeal back in June because his decision to proceed under the per se standard of review “involves a controlling question of law as to which there is substantial ground for difference of opinion.” But rather than resolve the substantive legal issue at hand, the Eleventh Circuit issued a one sentence order denying “Defendants’ petition to appeal.” The parties did not seek to stay the case pending appeal and the underlying action has been moving forward.
Continue Reading Eleventh Circuit Denies Blue Cross Blue Shield’s Interlocutory Appeal Challenging Application of Per Se Rule In Multidistrict Litigation In Alabama

On November 15, 2018, the Antitrust Division of the U.S. Department of Justice settled a two-and-a-half year long lawsuit against Atrium Health, a North Carolina hospital system formerly known as the Carolinas HealthCare System, enjoining Atrium’s anti-steering provisions against health plans. This article discusses the DOJ/Atrium settlement in light of the recent Ohio v. American Express Supreme Court decision, which concerned anti-steering provisions in the two-sided credit card network services market. We previously reported on the DOJ’s suit against Atrium here, and analyzed the implications of the SCOTUS Amex decision on health insurance here.
Continue Reading U.S. Department of Justice Settles Anti-Steering Suit Against Hospital System; First Such Settlement After Amex SCOTUS Decision

California Attorney General Xavier Becerra filed a civil antitrust lawsuit in San Francisco County Superior Court on March 29, 2018 (the “Complaint”), alleging that Sutter Health (“Sutter”), one of Northern California’s largest healthcare providers, engaged in unlawful conduct in violation of California’s Cartwright Act (the “Act”).[1] Sutter Health has a substantial healthcare network that includes: 24 hospitals, 35 outpatient centers, physician’s organizations with over 5,500 members, and over 12,000 other physicians who partner with Sutter.
Continue Reading California Sues Sutter Health Alleging Anti-Competitive Practices

The Seventh Circuit refused to revive an exclusive dealing claim by one hospital against its competitor because of an exclusivity agreement with an insurance plan. Judge Richard Posner wrote the short opinion strongly reiterating in the health insurance context the established principle that a competitor trying to attack vertical agreements under Section 1 of the Sherman Act will have an uphill struggle under the Rule of Reason. The case is Methodist Health Services Corp. v. OSF Healthcare System d/b/a Saint Francis Medical Center, No. 16-3791 (7th Cir. June 19, 2017).
Continue Reading Exclusive Agreement Between Hospital and Insurance Plan Does Not Violate Section 1