The FTC released its policy paper and fact sheet urging state legislatures to avoid using Certificate of Public Advantage (“COPA”) laws and instead invited state lawmakers to work collaboratively with competition policy experts to minimize the potentially harmful effects of further hospital consolidation. This follows that Agency’s recent blocking of a number of healthcare provider mergers, emphasizing the Commission’s focus on preventing what it considers anticompetitive hospital mergers. The Agency also announced that it will be sending out checks totaling more than $822,000 to borrowers that lost money to a student loan debt-relief scheme. These stories after the jump.

Monday, August 15, 2022

Office of Policy Planning/Bureau of Competition: Hospitals and Clinics

  • The FTC released a policy paper and a fact sheet on Certificate of Public Advantage (“COPA”) laws, which it argues attempts to immunize hospital mergers from antitrust laws by replacing competition with state oversight. According to the Commission’s paper, although hospitals claim COPAs will help lower costs and improve population health, the evidence indicates otherwise. The paper includes research showing that several hospital mergers subject to COPAs have resulted in higher prices and reduced quality of care for patients, despite regulatory commitments designed to reduce these anticompetitive effects. The Commission staff urged states to avoid using COPAs and instead invited state lawmakers to work collaboratively with competition policy experts to minimize the potentially harmful effects of further hospital consolidation. The FTC has seen a resurgence in COPA laws in recent years. For instance, state legislatures have passed COPA legislation with the intent of exempting specific proposed hospital mergers from anticipated antitrust challenges. According to the Commission, these types of laws tend to immunize provider mergers from antitrust scrutiny. The Commission emphasized the importance of helping provide access to affordable healthcare, including preventing anticompetitive hospital mergers.

Thursday, August 18, 2022

Bureau of Consumer Protection: Debt Relief

  • The FTC announced that it will be sending over 14,000 checks totaling more than $822,000 to borrowers who lost money to a student loan debt-relief scheme that operated under the name Student Advocates and was assisted by a third-party financier, Equitable Acceptance Corporation (“EAC”). According to the Commission, the scheme included illegal upfront fees that the defendants falsely claimed went toward consumers’ student loans. Defendants also steered customers into high-interest loans to pay these fees and made false promises that their services would permanently lower or even eliminate consumers’ student loan payments and debt balances. The 2019 complaint filed against the student loan debt-relief scheme and the financing company alleged defendants violated the FTC Act and provisions of the Telemarketing Sales Rule, including violations connected to providing substantial assistance to co-defendants by knowingly or consciously avoiding knowledge that the defendants were engaged in deceptive and abusive telemarketing practices. The complaint also included claims for violations under the Truth in Lending Act and Regulation Z, and various Minnesota UDAP laws. In May 2021, the FTC announced a stipulated final order with Student Advocates that banned the company from providing debt relief service, prohibited them from collecting further payments from consumers who purchased their debt relief services, and required them to pay monetary relief. The final stipulated order against EAC in the Student Advocates matter requires it to pay nearly $28 million; to relinquish its right to collect on any outstanding balances from current or former customers of Student Advocates; and to notify these customers that it will not collect further payments from them.