ACCC 47th Annual Meeting & Cancer Center Business Summit (AMCCBS): Positive Disruption In The COVID-19 ERA – Part 3 – Anti-trust/Competition Law – United States – Mondaq News Alerts

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ACCC 47th Annual Meeting & Cancer Center Business Summit (AMCCBS): Positive Disruption In The COVID-19 ERA – Part 3 – Anti-trust/Competition Law – United States – Mondaq News Alerts

United States: ACCC 47th Annual Meeting

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ACCC 47th Annual Meeting & Cancer Center Business Summit (AMCCBS): Positive Disruption In The COVID-19 ERA – Part 3

12 April 2021

Foley & Lardner

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The ACCC 47th Annual Meeting & Cancer Center
Business Summit (AMCCBS) took place virtually, March 1-5. The
Summit serves the prominent thought leadership forum and annual
conference on matters of policy, business strategies, business
models, hospital alignment, and best business practices in
community oncology.

You can also review our additional AMCCBS focused blogs on
Moving Forward Under the Biden
Administration
” and “The 2021 ‘Level Set’ in the Sprint to
Value-Based Care
” by clicking the available links.

The Next Wave in Oncology Transactions – Marketplace
Considerations, Transaction Structures and Antitrust

Foley Partner Adria Warren, along with Curtis Bernstein
(Principal at Pinnacle Healthcare Consulting), Josh Eaves (Senior
VP, Strategic Partnerships and Acquisitions at Alliance Oncology),
and Brad Prechtl (CEO at American Oncology Network, LLC), explored
the newest trends and opportunities available to community
providers and hospitals in oncology transactions.

In discussing the economic environment for oncology
transactions, Mr. Eaves noted that it seems hard to say whether or
not in a given marketplace you’re gaining market share riding
the tide of demographic market growth, tempered with the fact that
you haven’t seen the growth come through in the revenues. What
is clear across the current marketplace is that future values are
driven by the past and demographic growth is balanced by changes in
the marketplace, and the aging population is the biggest growth
driver across care setting.

The speakers discussed the implications of the new rules,
reimbursement pressures and other drivers of value-based care. Ms.
Warren noted that from a legal perspective, there is an ongoing
push toward value-based care, overlaid with increasing financial
pressures around site-neutrality and drug pricing/transparency.
Innovations in technology and reimbursement and increased
experience and adoption of telehealth solutions under the pandemic
are expected to contribute to this evolution, very clearly a
silver-lining coming out of the pandemic. The speakers agreed,
however, that it will take time to play out, and that what makes
sense at the macro level often conflicts with local market
dynamics.

In terms of valuation indications, company specific risks is a
driver (inverse) of multiples such as money coming into market
(e.g., private equity group, General Atlantic, investing $200
million to create OneOncology), reduction in supply creating demand
(e.g., number of community oncology clinics declined 10% between
2018 and 2020), trends in reimbursement on future potential cash
flow, and changes in treatment patterns effect on demands for
services (e.g., proton centers and immunotherapy). What is evident
is that this is a very exciting time in cancer care, the way care
is delivered and how those get taken into account on a valuation
perspective. In terms of the future and moving forward, there is an
expectation that providers will be thinking strategically about the
long term and how to address all the legal issues coming from these
market trends.

Foley Partner Holden Brooks provided high-level basics of
antitrust from compliance and a business-planning point of view,
noting that antitrust regulation will be an increasingly important
dynamic to understand from a business perspective. Why is it
important to pay attention now? Ms. Brooks pointed to:

  • Increase in criminal enforcement with four criminal anititrust
    cases against providers since April 2020
  • Increase in civil enforcement. DOJ, FTC, and state attorney
    generals see Health Care as an area where they can make an
    impact.
  • Continued private litigation with steep damages.
  • Expectation of antitrust compliance. Providers are on
    notice.

What is the aim of State and Federal Antitrust laws? The laws
were put in place to:   

  • Protect competition among providers on rates,
    quality, service, and innovation.
  • Prohibit agreements that on-balance can harm
    competition.
  • Prefer that competitors do not know each
    other’s confidential rates or other sensitive information.
  • Presume that society is better off with
    competition.

In January 2021, the FTC announced a retrospective
reconsolidation, covering 15 states. The FTC is requesting claims
data and contract information from major payors. The study is
backward looking for the years 2015 to 2020. The data will help the
FTC assess the impact of physician and hospital/health system
consolidation during this period.

With increased affiliation and consolidation among providers,
what are the Antitrust risks in the provider space?

  • Opportunity for competitors to communicate improperly.
  • Exchange of information in due diligence and discussion can
    cause allegations of improper coordination.
  • Increased market share, which may put negotiating power into
    just a few entities, can make collusion easier.
  • Heavier review and regulation.

Counsel can help manage risk associated with the process and the
results. The return on investment (ROI) of Antitrust awareness and
compliance training versus litigation, is significant.

After a successful virtual conference, the ACCC 48th
Annual Meeting & Cancer Center Business Summit is planning to
be held in person in Washington, D.C. in March 2022!

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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