H.R. 2640 (103rd): Health Care Cooperative Antitrust Protection Act of 1993

103rd Congress, 1993–1994. Text as of Jul 14, 1993 (Introduced).

Status & Summary | PDF | Source: GPO

HR 2640 IH

103d CONGRESS

1st Session

H. R. 2640

To direct the Secretary of Health and Human Services and the Attorney General to provide exemptions of certain provisions of antitrust law for activities of providers of health care services conducted under joint ventures, and for other purposes.

July 14, 1993

IN THE HOUSE OF REPRESENTATIVES

July 14, 1993

Mr. MCMILLAN (for himself, Mr. COBLE, Mr. TAYLOR of North Carolina, Mr. LANCASTER, Mr. KOLBE, and Mr. VALENTINE) introduced the following bill; which was referred jointly to the Committees on Energy and Commerce and the Judiciary


A BILL

To direct the Secretary of Health and Human Services and the Attorney General to provide exemptions of certain provisions of antitrust law for activities of providers of health care services conducted under joint ventures, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ‘Health Care Cooperative Antitrust Protection Act of 1993’.

SEC. 2. PURPOSE.

    It is the purpose of this Act to substantively encourage the formation of efficiency producing, pro-competitive joint ventures among providers of health care services by minimizing unnecessary antitrust risk and clarifying regulatory ambiguity in order to reduce excess capacity and duplication of services.

SEC. 3. DEFINITIONS.

    For purposes of this Act:

      (1) The term ‘Advisory Committee’ means the Interagency Advisory Committee on Competition, Antitrust Policy, and Health Care established under section 6.

      (2) The term ‘antitrust laws’ has the meaning given it in subsection (a) of the first section of the Clayton Act (15 U.S.C. 12(a)), except that such term includes--

        (A) section 5 of the Federal Trade Commission Act (15 U.S.C. 45) to the extent such section applies to unfair methods of competition; and

        (B) any State law similar to the laws referred to in subparagraph (A).

      (3) The term ‘health care joint venture’ means an agreement between 2 or more providers of health care services that is entered into solely for the purpose of sharing in the provision of health care services and that involves substantial integration or financial risk-sharing between the parties, but does not include the exchanging of information, the entering into of any agreement, or the engagement in any other conduct that is not reasonably required to carry out such agreement.

      (4) The term ‘health care services’ includes services related to the delivery or administration of health care services.

      (5) The term ‘provider of health care services’ means any individual or entity that is engaged in the delivery of health care services in a State and that is required by State law or regulation to be licensed or certified by the State to engage in the delivery of such services in the State.

      (6) The term ‘Secretary’ means the Secretary of Health and Human Services.

SEC. 4. ESTABLISHMENT OF EXEMPTION PROGRAM FOR HEALTH CARE JOINT VENTURES.

    (a) ESTABLISHMENT-

      (1) IN GENERAL- Not later than 6 months after the date of the enactment of this Act, the Secretary of Health and Human Services, in concurrence with the Attorney General, shall promulgate specific guidelines under which a health care joint venture may submit an application requesting that the Secretary provide the entities participating in the joint venture with either of the following exemptions:

        (A) With respect to any action brought against the entity under the antitrust laws, an exemption under which (notwithstanding any other provision of law)--

          (i) monetary recovery on a claim shall be limited to actual damages if the claim results from conduct within the scope of the joint venture and the action is filed after the exemption becomes effective; and

          (ii) the conduct of the entity in making or performing a contract to carry out the joint venture shall not be deemed illegal per se but shall be judged on the basis of its reasonableness, taking into account all relevant factors affecting competition, including (but not limited to) effects on competition in properly defined, relevant research, development, product, process, and service markets (taking into consideration worldwide capacity to the extent that it may be appropriate in the circumstances).

        (B) An exemption under which (notwithstanding any other provision of law) the antitrust laws shall not apply to conduct within the scope of the joint venture for a 5-year period.

      (2) DEADLINE FOR RESPONSE- The Secretary, with the concurrence of the Attorney General, shall approve or disapprove the application of a health care joint venture for an exemption under this subsection--

        (A) in the case of an exemption described in paragraph (1)(A), not later than 30 days after the Secretary and the Attorney General receive the joint venture’s application; and

        (B) in the case of an exemption described in paragraph (1)(B), not later than 90 days after the Secretary and the Attorney General receive the joint venture’s application.

      (3) PROVIDING REASONS FOR DISAPPROVAL- If the Secretary disapproves the application of a health care joint venture for an exemption under this subsection, the Secretary shall provide the joint venture with a statement explaining the reasons for the Secretary’s disapproval.

    (b) REQUIREMENTS FOR APPROVAL- For purposes of subsection (a), the Secretary and the Attorney General shall approve the application of a health care joint venture for an exemption under subsection (a) if--

      (1) in the case of a joint venture seeking an exemption described in subsection (a)(1)(B), the Secretary (in concurrence with the Attorney General) finds that the joint venture meets the criteria described in subsection (c); and

      (2) an entity participating in the joint venture submits to the Secretary, the Attorney General, and the Advisory Committee an application not later than 30 days after the entity has entered into a written agreement to participate in the joint venture (or not later than 30 days after the date of the enactment of this Act in the case of an agreement in effect as of such date) that contains the following information and assurances:

        (A) The identities of the parties to the joint venture.

        (B) The nature, objectives, and planned activities of the joint venture.

        (C) Assurances that the entities participating in the joint venture shall notify the Secretary and the Attorney General of any changes in the information described in subparagraphs (A) and (B) during the period for which the exemption is in effect.

        (D) In the case of a joint venture seeking an exemption described in subsection (a)(1)(B)--

          (i) assurances that the entities participating in the joint venture shall submit annual reports to the Secretary and the Attorney General during the period for which the exemption is in effect on the activities of the joint venture; and

          (ii) any other information and assurances required by the Secretary and the Attorney General to ensure that the joint venture meets the criteria described in subsection (c).

    (c) CRITERIA DESCRIBED- A health care joint venture meets the criteria referred to in this subsection if the Secretary (with the concurrence of the Attorney General) finds that the approval of the joint venture will promote each of the following goals:

      (1) The enhancement of the quality of health care services provided to individuals residing in the geographic area served by the entities participating in the joint venture.

      (2) The preservation of meaningful competition among providers of health care services in such area.

      (3) The reduction of the costs of providing health care services in such area, or an increase in the efficiency of the provision of such services.

      (4) The improvement of the utilization of health care services in such area.

      (5) The elimination of costly and unnecessary duplication in the delivery of health care services in such area.

    (d) REVOCATION OF EXEMPTION-

      (1) IN GENERAL- The Secretary, in concurrence with the Attorney General, may revoke an exemption provided to a health care joint venture under this section if, at any time during which the exemption is in effect, the Secretary finds that the joint venture no longer meets any of the applicable requirements for approval under subsection (b), except that the Secretary may not revoke such an exemption if the failure of the health care joint venture to meet such requirements is merely technical in nature.

      (2) TIMING- The revocation of an exemption under paragraph (1) shall apply only to conduct of the health care joint venture occurring after the date on which the Secretary revokes the exemption.

    (e) RENEWAL OF EXEMPTIONS PROVIDING EXEMPTION FROM ANTITRUST LAWS- Upon the request of an entity participating in a health care joint venture for which an exemption described in subsection (a)(1)(B) is in effect, the Secretary, in concurrence with the Attorney General may renew the exemption for an additional 5-year period if the joint venture continues to meet the applicable requirements for approval under subsection (b).

    (f) WITHDRAWAL OF APPLICATION- Any party that submits an application under this section may withdraw such application at any time before the Secretary’s and the Attorney General’s response to the application.

SEC. 5. REQUIREMENTS RELATING TO NOTICE AND PUBLICATION OF EXEMPTIONS AND RELATED INFORMATION.

    (a) PUBLICATION OF APPROVED APPLICATIONS FOR EXEMPTIONS IN FEDERAL REGISTER-

      (1) IN GENERAL- With respect to each exemption for a health care joint venture provided under section 4(a), the Secretary (with the concurrence of the Attorney General) shall--

        (A) prepare a notice with respect to the joint venture that identifies the parties to the venture and that describes the planned activities of the venture;

        (B) submit the notice to the entities participating in the joint venture; and

        (C) after submitting the notice to such entities (but not later than 30 days after approving the application for the exemption for the joint venture), publish the notice in the Federal Register.

      (2) EFFECT OF PUBLICATION- An exemption provided by the Secretary and the Attorney General under section 4(a) shall take effect as of the date of the publication in the Federal Register of the notice with respect to the exemption pursuant to paragraph (1).

    (b) WAIVER OF DISCLOSURE REQUIREMENTS FOR INFORMATION RELATING TO APPLICATIONS FOR EXEMPTIONS-

      (1) IN GENERAL- All information and documentary material submitted as part of an application of a health care joint venture for an exemption under section 4(a), together with any other information obtained by the Attorney General, the Secretary, or the Advisory Committee in the course of any investigation, administrative proceeding, or case with respect to a potential violation of the antitrust laws by the joint venture with respect to which the exemption applies, shall be exempt from disclosure under section 552 of title 5, United States Code, and shall not be made publicly available by any agency of the United States to which such section applies, except as relevant to a law enforcement investigation or in a judicial or administrative proceeding in which such information and material is subject to any protective order.

      (2) EXCEPTION FOR INFORMATION INCLUDED IN FEDERAL REGISTER NOTICE- Paragraph (1) shall not apply with respect to information contained in a notice published in the Federal Register pursuant to subsection (a).

    (c) USE OF INFORMATION TO SUPPORT OR ANSWER CLAIMS UNDER ANTITRUST LAWS-

      (1) IN GENERAL- Except as provided in paragraph (2), the fact of disclosure of conduct under an application for an exemption under section 4(a) and the fact of publication of a notice in the Federal Register under subsection (a) shall be admissible into evidence in any judicial or administrative proceeding for the sole purpose of establishing that a person is entitled to the protections provided by an exemption granted under section 4(a).

      (2) EFFECT OF REJECTED APPLICATION- If the Secretary and the Attorney General deny, in whole or in part, an application for an exemption under section 4(a), or revoke an exemption under such section, neither the negative determination nor the statement of reasons therefore shall be admissible into evidence in any administrative or judicial proceeding for the purpose of supporting or answering any claim under the antitrust laws.

SEC. 6. INTERAGENCY ADVISORY COMMITTEE ON COMPETITION, ANTITRUST POLICY, AND HEALTH CARE.

    (a) ESTABLISHMENT- There is hereby established the Interagency Advisory Committee on Competition, Antitrust Policy, and Health Care. The Advisory Committee shall be composed of--

      (1) the Secretary of Health and Human Services (or the designee of the Secretary);

      (2) the Attorney General (or the designee of the Attorney General);

      (3) the Director of the Office of Management and Budget (or the designee of the Director); and

      (4) a representative of the Federal Trade Commission.

    (b) DUTIES- The duties of the Advisory Committee are--

      (1) to discuss and evaluate competition and antitrust policy, and their implications with respect to the performance of health care markets;

      (2) to analyze the effectiveness of health care joint ventures receiving exemptions under the program established under section 4(a) in reducing the costs of and expanding access to the health care services that are the subject of such ventures; and

      (3) to make such recommendations to Congress not later than 2 years after the date of the enactment of this Act (and at such subsequent periods as the Advisory Committee considers appropriate) regarding modifications to the program established under section 4(a) as the Advisory Committee considers appropriate, including modifications relating to the costs to health care providers of obtaining an exemption for a joint venture under such program.