On December 9, 2022, the Antitrust Division of the U.S. Department of Justice (DOJ) and the Department of Health and Human Services Office of Inspector General (HHS-OIG) signed a memorandum of understanding (MOU) (available here) designed to “better protect health care consumers and workers from collusion, ensure compliance with laws enforced by [each entity], and promote competitive health care markets.” This MOU reinforces the Biden administration’s interest in policing anticompetitive conduct in the healthcare industry, as articulated last year in the President’s Executive Order on Promoting Competition in the American Economy.
Key Terms of the MOU
The MOU memorializes four primary coordination activities:
- Information Sharing: DOJ’s Antitrust Division and HHS-OIG (collectively, the Agencies) commit to sharing “information, including complaints, investigative files, reports or analyses” as well as “data procured by either Agency” and “technical assistance, including guidance on policy and enforcement matters.”
- Training, Education, and Outreach: The Agencies will train each other’s staff on how to spot cases and potential violations of law arising under the other Agency’s jurisdiction. This training “may include coordination on the experiences and enforcement perspectives of each Agency in identifying and investigating the legal implications of complex healthcare market structures and exploitative business models.”
- Consultation and Coordinated Enforcement: The Agencies will establish procedures to facilitate consultation on each Agency’s investigative and enforcement activities. This work may include “staff at each Agency periodically consulting on specific complaints, including reviewing information obtained during the course of investigation.” Where a person or entity subject to HHS-OIG’s exclusion authority resolves a criminal antitrust investigation through a negotiated resolution such as a non-prosecution agreement, the Agencies “will work together to ensure that exclusions are imposed where appropriate.”
- Referrals: When HHS-OIG identifies a potential violation of antitrust laws during the course of one of its own investigations, it will evaluate and refer the matter to DOJ’s Antitrust Division, if appropriate. Similarly, when the Antitrust Division detects potential violations of law or regulations within HHS-OIG’s jurisdiction, it will assess whether a referral to HHS-OIG is appropriate.
Implications for the Healthcare Industry
HHS-OIG has recently evinced greater interest in targeting conduct that not only poses fraud and abuse risks — such as violations of the Anti-Kickback Statute (AKS) or Beneficiary Inducement Statute — but also harms competition. For example, in a negative advisory opinion issued late last year, HHS-OIG expressed concern over a proposed joint venture (JV) that it believed might be intended to reward referrals between JV partners, lock in those referral streams, and “block out potential competitor[s]1.” DOJ has pursued similar conduct under both antitrust laws and fraud and abuse laws. In 2021, three generic drug manufacturers entered into settlements with DOJ’s Civil Division to resolve allegations under the False Claims Act that they paid and received compensation in violation of the AKS through arrangements on price, supply, and allocation of customers. These resolutions followed prior deferred prosecution agreements between each company and DOJ’s Antitrust Division. This activity also coincides with a public commitment by the Biden administration to prioritize identifying and addressing anticompetitive conduct in the healthcare industry.
The Agencies were always free to coordinate with each other to address conduct potentially implicating the jurisdiction of both the Antitrust Division and HHS-OIG. However, their decision to memorialize how each Agency will encourage earlier information sharing and educate the other on relevant issue spotting suggests greater collaboration going forward. As an example, where the Antitrust Division identifies healthcare-related conduct in the future that may not be appropriate for antitrust enforcement, one might expect DOJ officials to more readily refer such matters to counterparts at HHS-OIG. Similarly, HHS-OIG may be more likely to draw the Antitrust Division’s attention to fraud and abuse matters with potential anticompetitive implications.
Healthcare companies should take note of this development and be mindful of how such cross-agency collaboration could affect government enforcement and investigation decisions. For instance, when advocating for closure of an antitrust investigation based on the failure to meet an antitrust proof requirement, it may be helpful to consider ways to discourage government interest in the issue more broadly, potentially heading off a decision to refer the issue to HHS-OIG. Similarly, in advocacy to HHS-OIG, companies may be more likely to achieve global closure of a matter by underscoring the absence of proof that the conduct in any way diminished competition.
1 HHS-OIG, Advisory Opinion No. 21-18 (Nov. 17, 2021).
