FTC Comment: Minnesota Law Requiring Public Disclosure of Health Care Contract Data Increases Risk of Anticompetitive Behavior
On June 29, 2015, the Federal Trade Commission (FTC) responded to a request for comment from two Minnesota state legislators concerning recently enacted amendments to the Minnesota Government Data Practices Act (MGDPA). Under the amendments, the MGDPA would be expanded to cover all data collected by health maintenance organizations, health plans, and other health services vendors that contract with the state to provide health care services to Minnesota residents. In practice, this means that the confidential terms and conditions of health plans’ contracts with health care providers could be subject to public disclosure.
While they commended the “laudable goals” of the MGDPA, the FTC ultimately concluded that the amendments could lead to the disclosure of competitively sensitive information and, therefore, increase the likelihood of anticompetitive behavior. Specifically, there were two major concerns raised in the FTC comment.
First, the amendments likely would lead to the exchange of fees, discounts and other pricing terms among providers, which would increase the likelihood of provider collusion. The comment notes that in markets with a relatively small number of competitors and where those competitors have the ability to accurately monitor each other’s transactions, there is increased risk of collusion.
The second concern is that the exchange of information among providers could impede the ability of health plans to selectively contract among providers. In a typical selective contracting environment “where health care providers do not know each other’s prices, providers are more likely to bid aggressively—offering lower prices—to ensure they are not excluded from selective networks.” If providers know the prices, rebates, and discount arrangements offered by their competitors, they possess a new tool in negotiations with health plans and are less likely to bid aggressively.
The FTC argued that a balance is needed between providing consumers with the information they need to make informed decisions concerning their health care and allowing competitors to share information that could facilitate anticompetitive behavior. The FTC encouraged the Minnesota legislature to consider the types of information that would be the most helpful for consumers in selecting their service, such as actual or predicted out-of-pocket expenses, co-pays, and quality comparisons of plans and providers. However, they urged caution in mandating public disclosure of health plan contract details and fee schedules.
While the FTC’s comment was addressed to legislators, it highlights the kinds of information exchanges that the antitrust regulators believe can lead to anticompetitive behavior in the health care industry. In that sense it builds on the joint FTC and U.S. Department of Justice Statements of Enforcement Policy in Health Care, originally published in 1996. Providers should avoid exchange of any information concerning their fees, discounts and other pricing arrangements with their competitors.