Bill could ease review process for health insurer mergers

A measure making its way through Congress could smooth the regulatory process for mergers between health insurers and other healthcare organizations.

The Standard Merger and Acquisition Reviews Through Equal Rules (SMARTER) Act of 2015 passed the House of Representatives last week with a vote of 235-171. It is currently being considered by the Senate.

The bill would alter the merger-review authority of the Federal Trade Commission (FTC) by requiring it to satisfy the same standards that the Department of Justice (DOJ) must meet in order to obtain a preliminary injunction to block a merger, according to Rep. Blake Farenthold (R-Texas), who sponsored the bill in the House. It would also prevent the FTC from litigating the merits of a contested merger through its own internal administrative process, rather than in federal court as the DOJ does.

Those new rules, LifeHealthPro points out, could help healthcare organizations more easily win approval for major mergers and acquisitions.

The DOJ and the FTC both are in the process of reviewing the Aetna-Humana and Anthem-Cigna mergers, which would narrow the nation's five largest health insurers down to two companies. At a recent Senate oversight committee hearing, Assistant Attorney General William J. Baer said the DOJ is carefully considering the effects of the mergers in local, statewide and national markets, though he and FTC Chairwoman Edith Ramirez gave few other details about the ongoing review.

Ramirez spoke out against the SMARTER Act in testimony before the Senate Judiciary Committee last October, saying that "by seeking to alter the commission's adjudicative function, the proposed legislation risks eroding a fundamental institutional attribute of the FTC."

"This quasi-judicial role is a defining characteristic of the agency--authority Congress very deliberately granted to the FTC when the agency was created to serve as a complement to enforcement by DOJ," she added.

But the bill's supporters say the measure is a way of limiting unnecessary regulations.

"As a government watchdog, I'm always looking for ways to make government smaller, more efficient and fairer. The SMARTER Act ensures a fair merger and acquisition review by eliminating the differences in the review process by the FTC and the DOJ," Farenthold said in his announcement.

The American Hospital Association also supports the bill, saying it will help pave the way for consolidation in the industry that has become necessary amid the changing healthcare landscape.

To learn more:
- here's the SMARTER Act summary
- read the LifeHealthPro article
- read Ramirez's testimony
- here's Farenthold's statement
- read the AHA's factsheet

Related Articles:
A glimpse into the DOJ's review of health insurer mega-mergers
Regulators have tough job in review of Aetna-Humana merger
Insurers pull out all the stops to win feds' approval of merger deals
Too soon for Aetna, Anthem to declare victory in merger review process
Super-sized: Consolidations may lead to mega-regional systems in major markets

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