Providers weigh Var­ney exit

Fo­cus on an­titrust laws made ‘com­pa­nies take no­tice’

Modern Healthcare - - The Week In Healthcare - Joe Carl­son

U.S. Jus­tice Depart­ment an­titrust chief Christine Var­ney, who over­saw an in­crease in scrutiny on health­care com­pa­nies dur­ing an era of sweep­ing con­sol­i­da­tion and re­form, will re­sign her fed­eral job Aug. 5.

A month later, Var­ney is slated to be­come an at­tor­ney with Cra­vath, Swaine & Moore, ac­cord­ing to the firm, which has of­fices in New York and Lon­don and spe­cial­izes in cor­po­rate law and lit­i­ga­tion and has a longheld ex­per­tise in an­titrust law.

As as­sis­tant at­tor­ney gen­eral of the Jus­tice Depart­ment’s an­titrust divi­sion, Var­ney came into her role in the Obama ad­min­is­tra­tion in 2008 vow­ing to step up an­titrust en­force­ment across the board—and es­pe­cially in health­care, among providers and in­sur­ers.

“She’s clearly made health­care one of her pri­or­i­ties, and she cer­tainly has made health­care com­pa­nies sit up and take no­tice,” said Jones Day Part­ner Toby Singer, who for­merly rep­re­sented Blue Cross and Blue Shield of Michi­gan in re­cent an­titrust cases. “So she’s def­i­nitely ac­com­plished what most an­titrust reg­u­la­tors want to ac­com­plish, which is to get peo­ple to pay at­ten­tion to the an­titrust laws.”

Ob­servers say Var­ney lived up to the ex­pec­ta­tions she set when she an­nounced her ar­rival in Wash­ing­ton by re­scind­ing a looser an­titrust en­force­ment pol­icy pro­mul­gated by Jus­tice Depart­ment lawyers un­der Pres­i­dent Ge­orge W. Bush.

“I think peo­ple are hav­ing to give more con­ser­va­tive ad­vice than they did on some kinds of trans­ac­tions,” said Art Lerner, a part­ner with Crow­ell Mor­ing. “I think she def­i­nitely es­tab­lished a tone of greater vig­i­lance in terms of pub­lic pos­ture.”

Var­ney’s im­pact will be felt for years with the pro­mul­ga­tion of pro­posed waivers from an­titrust rules for ac­count­able care or­ga­ni­za­tions, but health­care lawyers noted two Jus­tice Depart­ment cases in par­tic­u­lar as defin­ing Var­ney’s two-year run: the Jus­tice law­suit filed against Blue Cross and Blue Shield of Michi­gan and a set­tle­ment reached with a hos­pi­tal in Wi­chita Falls, Texas, called United Re­gional Health Care Sys­tem.

Both cases con­cerned health­care pric­ing, and specif­i­cally, al­le­ga­tions that a dom­i­nant player in a mar­ket was us­ing clout to drive up costs and

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