The Federal Trade Commission (FTC) has opened a probe into the country’s two largest dialysis care providers and the terms of their contracts with physicians, according to a weekend report that has been confirmed by the companies.
The investigation involves DaVita and Fresenius Medical Care (FMC) and is still in its early stages, anonymous sources with knowledge of the inquiries told Politico.
Both companies have confirmed to Fierce Healthcare that they are aware of and are cooperating with the regulator’s inquiries.
“As disclosed months ago, the FTC requested some information and we are cooperating with them to provide what they need,” DaVita wrote in an emailed statement. “We believe our practices are appropriate and will continue to collaborate with the agency.”
“We are aware of the inquiry and are fully cooperating with the FTC,” FMC wrote in an emailed statement. “As this is an ongoing investigation, we cannot comment any further.”
The FTC is interested in exploring noncompete provisions in the contracts the companies hold with the physicians overseeing their clinics in medical director roles, according to the report and a DaVita regulatory filing. Such covenants would restrict the physicians from signing on with competitors or starting their own businesses.
The company had disclosed Civil Investigative Demands (CIDs) from the commission in earlier SEC regulatory filings.
Specifically, in its 10-Q quarterly report filed with the Securities and Exchange Commission in early May, DaVita wrote that it had received two CIDs from the regulator in April that “cover the period from January 1, 2016 to the present and generally seek information relating to restrictive covenants, such as non-competes, with physicians. The Company is cooperating with the government in this investigation.”
The FTC, under direction of the White House, has sought to project a tough stance on large healthcare companies’ noncompetes and other business practices the agency considers anticompetitive. The regulator has been flexing those muscles more pointedly within the anesthesia space—it has an ongoing antitrust case against U.S. Anesthesia Partners that heavily focuses on noncompetes, and in February came to a settlement with the chain’s Colorado branch that outlined modifications to existing noncompetes with clinicians.
Most notably, the agency rolled out a sweeping noncompete ban in April that earned a narrow preliminary injunction earlier this month and is likely headed for a brick wall in the courts’ subsequent judgment.
Politico’s report does not attribute any of its information or sources to the FTC. The agency declined to comment for the original report and to Fierce Healthcare’s request for confirmation. The media report comes as the FTC’s noncompete ban faces roadblocks and amid the agency’s continuing interest in projecting a strong hand on noncompetes.
DaVita and FMC are by far the market leaders for renal care services in the U.S. As of the end of 2023, DaVita ran nearly 2,700 dialysis centers in the U.S. while FMC ran about 2,800 dialysis clinics. Together, the companies control over two-thirds of the country’s outpatient dialysis clinics, though both point to the home dialysis market as a source of growth. Both DaVita and Fresenius have previously found themselves the target of FTC antitrust enforcement.
Publisher: Source link