[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2640 Introduced in House (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.

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