COPAs and State Action Immunity

Often, health care providers want to take advantage of state “provider cooperation” laws — those laws that sanction (and provide “state action immunity” for) conduct that would otherwise raise antitrust concerns. Late last year, the Federal Trade Commission (“FTC”) issued a Staff Notice of Certificate of Public Advantage (“COPA”) Assessment, noting that in recent years, COPA laws have been expanded to protect provider collaborations that might otherwise result in antitrust review.

While the Supreme Court of the United States has made clear that state action immunity is strongly disfavored, it has recognized that the state acting as a sovereign enjoys absolute immunity from the federal antitrust laws. However, actions of the “State” are limited to the actions of the state legislature or the state’s supreme court. When an action is taken by a “political subdivision” of the State, such as a municipality or an agency of the State, the action taken must be pursuant to a clear and affirmatively declared state policy to displace competition with regulation.

In contrast, state action immunity that would generally apply to private parties, such as providers (for example, through a COPA process), requires satisfaction of a two-prong test: (1) the restraint must be clearly articulated and affirmatively expressed by the legislature, and (2) the conduct must be “actively supervised” by the state itself.

The FTC has consistently argued that state action immunity provisions are unnecessary for health care providers, citing its guidance on the types of provider collaborations that are acceptable under the antitrust laws. The FTC notes that its current COPA study is intended to “facilitate a rigorous discussion of ways to study the impact of COPAs and other state-based regulatory approaches. . . .”

For additional information about the issues discussed above, or if you have any other antitrust concerns, please contact the Epstein Becker Green attorney who regularly handles your legal matters, or one of the authors of this Antitrust Byte: