Antitrust Ruling Could Impact State Regulatory Boards

John Commins, for HealthLeaders Media , June 21, 2013

"From an infrastructure perspective you have to look at whether there is active state supervision over your activity," he says. "If there is active state supervision where there is a state governing body that actually reviews your decision such that your decisions can be appropriately attributed to the state, then you are going to satisfy both prongs of the Midcal test and you are going to be immune from the antitrust laws."

"But if your board doesn't have active supervision from the state, then you need to understand that your conduct may not be immune from the antitrust laws and you may have to look at how you are constituted and discuss whether you need to go back to the legislature and either have them draft legislation putting in a regime that does engage in active state supervision or possibly reformulate how your board is constituted so you are not deemed a private party."

Levine says it is also important that regulatory boards "understand what conduct you are engaging in and whether it can fairly be called anticompetitive."

"Not every activity of the board is going to restrict competition," he says. "You really only have to worry about conduct that can be said [to be] where you are foreclosing or otherwise eliminating or reducing competition. In those cases if you really want to feel comfortable about it, you need to make sure that you are not considered a private party because your board composition is made, for example, straight from the governor or is not comprised of people who are essentially practicing in the field or that there is a regime of active state supervision."

John Commins is a senior editor with HealthLeaders Media.

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