The Network Responds to RFI on Factors Driving Hospital-Physician Practice Consolidation

The US Oncology Network recently submitted comments in response to a Request for Information (RFI) from the Department of Justice, the Department of Health and Human Services, and the Federal Trade Commission on the drivers and effects of consolidation in healthcare markets. The RFI comes as the three agencies take a greater interest in promoting competitive and fair healthcare markets.

In its response to the RFI, The Network agreed that a competitive healthcare market promotes higher quality, lower cost care and supports innovation. The Network argued, however, that independent community oncology providers find themselves competing against hospitals on an increasingly unlevel playing field. This is primarily due to payment policies that reimburse hospital-owned physician clinics (considered to be hospital outpatient departments) at rates that are significantly higher than independent physician clinics for the same services. Depending on the hospital’s tax status, the facility may also be eligible for the 340B Drug Discount Program, disproportionate share hospital payments, graduate medical education funding, and state or federal tax exemptions, whereas community cancer clinics are not eligible for these same benefits. These inherent advantages distort the market in favor of these large participants and ultimately limit competition and patient choice.

The Network explained how consolidation:

• Increases costs for patients, taxpayers, and employers
• Reduces access to care
• Undermines physician autonomy
• Limits patient choice

The Network also shared several examples where hospitals are making it increasingly difficult for independent practices to co-exist with hospitals in the same market. The Network stated that this activity may be flying under the radar because it takes place prior to an acquisition or merger, or because a hospital that acquires a community-based practice may still technically face competition from another hospital system.

The Network urged HHS, DOJ, and the FTC to examine policy solutions to reduce incentives for consolidation and address anti-competitive behavior.

To read The Network’s comments in full, CLICK HERE.
To read the RFI, CLICK HERE.
To read more about the DOJ’s efforts, CLICK HERE.