[Congressional Record Volume 140, Number 114 (Monday, August 15, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: August 15, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                 ANTITRUST AND THE HEALTH SECURITY ACT

  Mr. HATCH. Mr. President, we have had a very informative exchange of 
information today, which has revealed a number of defects in both our 
current health care delivery system and in attempts by the majority to 
remedy those problems.
  One area which our discussion has not touched upon in any great 
detail is antitrust.
  I have been dismayed that, despite a clear need for antitrust reform, 
as evidenced by hearings in both the Judiciary and Finance Committees, 
neither the Mitchell, nor the Kennedy, nor the Moynihan bills contain 
any antitrust relief for the myriad of actors in the rapidly changing 
health care marketplace.
  As my colleagues are aware, in an attempt to address the need for 
antitrust reform, last year Senator Thurmond and I introduced S. 1658, 
the Health Care Antitrust Improvements Act. Our colleague, 
Representative Bill Archer, introduced the companion House legislation, 
which served as a model for amendments adopted by the House Judiciary 
Committee.
  Since Senator Thurmond and I introduced S. 1658, a number of provider 
groups have expressed concern about provisions in this legislation 
which they believe would afford greater protection to doctors than to 
other health care providers.
  As we have made abundantly clear on a number of occasions, that was 
neither our intent nor, we believe, the effect of the legislation we 
drafted.
  However, due to substantial and continuing apprehension about that 
provision, Senator Thurmond and I offered to make changes in the 
legislation to address those concerns.
  I think it would be useful for my colleagues to be aware of those 
changes, and for the health care community to be aware that I continue 
to believe that antitrust relief is a necessary part of health care 
reform.
  For those reasons, I am inserting in the Record at this point a 
summary of our revised legislation, which I commend to my colleagues 
for their serious consideration.

     Summary of Hatch-Thurmond Health Care Antitrust Improvements 
                              Legislation

       Following is a summary of the Hatch-Thurmond Health Care 
     Antitrust Improvements legislation, which has been revised to 
     address concerns raised about the ``Health Care Antitrust 
     Improvements Act'' as introduced last November by Senators 
     Hatch and Thurmond (S. 1658), and by Representative Archer 
     (H.R. 3486). The principal changes made are indicated in 
     bullet points.
       The Hatch-Thurmond legislation is intended to resolve some 
     of the uncertainty that surrounds the application of the 
     antitrust laws to health care activities. The purpose is to 
     save money and improve quality in health care, not for the 
     benefit of providers, but for the ultimate benefit of 
     patients and those who pay the bills. Four methods of 
     achieving greater clarity in the antitrust laws are employed:


                            i. safe harbors

       To reduce the costs of antitrust regulation in the health 
     care marketplace and decrease the burden of repetitive review 
     under the certificate process, the Department of Justice is 
     directed to develop ``safe harbors.'' DOJ must solicit input 
     on possible safe harbors through notice and comment 
     procedures. The safe harbors will be defenses in all federal, 
     state and private antitrust suits, except for injunctive 
     relief by the DOJ or FTC in ``extraordinary circumstances.''
       The safe harbors to be developed must cover at least the 
     following areas:
       A. Joint Purchasing of Health Care Services;
       B. Small Hospital Mergers;
       C. Network Formation and Operation;
       D. Medical Self-Regulatory Entities;
       E. Provision of Information by Providers;
       F. Participation in Surveys;
       G. High-Tech and Tertiary Joint Ventures;
       H. Market Power Screens;
       I. Joint Purchasing Arrangements; and
       J. Good Faith Negotiations.
       The major change is that the safe harbors are not created 
     by statute. DOJ may add to safe harbors it establishes, and 
     may modify or eliminate them. This allows flexibility in the 
     safe harbors, while giving meaningful legal effect to the 
     standards established by DOJ.
       Activitiy within a safe harbor is subject to antitrust 
     actions for injunctive relief by DOJ or FTC. This encourages 
     providers to monitor their own conduct to ensure that it does 
     not cause anticompetitive harm even if it is technically 
     within a safe harbor. Additional categories for safe harbors 
     have been added.


                       ii. certificates of review

       Health care providers who seek greater certainty under the 
     antitrust laws may apply to DOJ for a certificate of review, 
     which will be granted (if appropriate) based on a review of 
     the facts of the case. DOJ must take into account health care 
     concerns such as access to care in underserved areas, in 
     addition to conducting a traditional antitrust competition 
     analysis. Activity covered by a certificate later found to be 
     anticompetitive is subject to injunctive relief.
       Certificates of review are not automatically approved by 
     the end of a 90 day period. Private, state and federal 
     antitrust actions for injunctive relief are permitted to stop 
     anticompetitive conduct covered by a certificate of review. 
     Judicial review of DOJ decisions concerning certificates of 
     review is limited to abuse of discretion and must be brought 
     in the U.S. District Court for the District of Columbia. 
     ``User fees'' of up to $5000 may be collected to cover costs, 
     on a sliding scale based on size of transactions proposed.


                           iii. notification

       Health care providers which form joint ventures may file a 
     notification of their activities with DOJ and in return will, 
     if sued under the antitrust laws, receive Rule of Reason 
     analysis (analyzing procompetitive and anticompetitive 
     effects of conduct) and be subject to actual damages (rather 
     than treble damages).
       Notification is restricted to joint ventures, rather than 
     any collaborative activity. Provisions ``deeming'' 
     notification without written submission of required 
     information have been eliminated. Excludes ``naked'' price-
     fixing, bid-rigging, and market allocation from notification 
     provision, but permits showing that conduct has 
     procompetitive aspects. Authorizes collection of user fees of 
     up to $250 to cover costs.


                             iv. guidelines

       DOJ is directed to issue guidelines regarding legitimate 
     collaborative activities of health care providers to further 
     health care reform, including:
       Product and geographic market definitions;
       Special rules for underserved areas, such as rural or inner 
     city markets;
       Provider networks;
       Community health centers;
       The subject matter areas of the safe harbors listed above. 
     Additional categories for guidelines have been added.

  Mr. DASCHLE. Mr. President, my friend, the Senator from Minnesota, 
has kindly consented to allow us to complete our work on a couple of 
the housekeeping chores, and I will do that at this point.
  Mr. DURENBERGER. Will my colleague yield to me just a minute?
  Mr. DASCHLE. I would be happy to yield to the Senator from Minnesota.
  Mr. DURENBERGER. Before we leave the subject of Government-run 
programs, I think it is fair to make a distinction between the Federal 
Employees Health Benefit Plan, which is merely an OBM or human resource 
run process by which each of us can buy a private health plan, and 
access to a private system. The only role the Government plays in there 
is the role of the employer, and they pay 72 percent of the premiums.
  On the other hand, Medicare and Medicaid are Government-run systems, 
where the Government pays a specific fee for a service much like they 
do in Canada. And I think it is appropriate to at least make that 
distinction. Where, in the private health plan that President Clinton 
promised to all Americans, that could not be taken away from them, the 
Mitchell bill does not give the elderly or the disabled the opportunity 
to get the same kind of health care through the same system that we 
can.
  Mr. DASCHLE. I appreciate the Senator's clarification, but I would 
only say that I think it fits certainly my definition of Government 
program when it is limited to Government employees and their families. 
It is run by Government employees. It is designated to be a 
governmentwide system specifically designed for all agencies of 
Government and their employees, paid for by the Federal Government as 
the employer.
  So from that perspective it would seem to me that it would meet the 
definition of Government. But that is, I suppose, a matter of 
interpretation, and I appreciate the Senator from Minnesota making his 
point.

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