Antitrust

National PACE Association (“NPA”) is the only national organization devoted to Programs of All- Inclusive Care for the Elderly (PACE®). NPA’s members include PACE organizations, organizations developing PACE programs, State PACE Associations and vendors, all of which are located in many states. While NPA members may not compete directly for patients or employees, NPA’s activities may reflect collective action subject to antitrust scrutiny. It is, therefore, NPA’s policy that all of its activities are to be carried out in strict compliance with the letter and spirit of federal and state antitrust and competition laws.

Background and overview of the antitrust laws

As a general rule, membership in a trade or professional association like NPA does not, by itself, create antitrust liability. Antitrust issues may arise, however, when association members seek to use association meetings as a forum for obtaining individual competitive advantages or achieving other anticompetitive objectives.

The antitrust laws prohibit, among other things, agreements among competitors that unreasonably restrain competition. Examples of such restraints include price fixing, bid rigging, allocation of markets or territories, group boycotts or certain refusals to deal. An antitrust “agreement” does not need to be a formal, written contract. It may be inferred from any written or oral communication or conduct (e.g., a “knowing wink or nod,” a casual remark, a quick e-mail note, or an “off-the-record” discussion) that leads to or reflects a mutual understanding. As a result, antitrust lawyers generally counsel organizations that may include competitors not to discuss the prices they charge (or pay) for products or services or the salaries, wages and benefits they provide to employees. Similarly, when competitors have discussions concerning vendors, they may result in the appearance of an agreement to “refuse to deal” or to “boycott” that vendor; that must certainly be avoided.

Consequences of an antitrust violation

The consequences of an antitrust violation can be onerous — serious criminal sanctions, including fines and imprisonment; private treble damages (a prevailing plaintiff also is entitled to payment of its reasonable attorneys’ fees and costs); and injunctions that may impede the utility to engage in any joint activities, including dissolution of an association altogether.

Antitrust compliance policy and guidelines

The consequences of an antitrust violation are so severe that it is important to avoid even the appearance of impropriety. Accordingly, this policy and the accompanying guidelines are intended to make members aware of the areas that may carry antitrust risk.

It is very important to ensure that any meetings, conference calls, and other activities that bring members together proceed under the guidelines established here. Although such meetings are generally lawful and procompetitive, they can provide opportunities to reach unlawful agreements.

NPA shall make a copy of this Antitrust Compliance Policy and Guidelines available to each member. And antitrust compliance reminders may be warranted at NPA meetings or discussions on subjects that could have antitrust ramifications. It is the obligation of each member and employee/officer/director of NPA to comply with this Policy and Guidelines. Members with questions about the application of the antitrust laws to any NPA activity should seek the advice of legal counsel.

Discussion Guidelines

NPA members and representatives should refrain from discussing or sharing commercially sensitive information such as the following:

• prices, discounts or other terms or conditions of sale of products or services that would not otherwise be publicly available, such as financial terms to particular third-party payors (including fee schedules, discount arrangements, capitated or per diem rates, or other risk sharing arrangements);
• individual negotiation strategies with specific third-party payors;
• future plans or strategies for pricing, including methods, timing, or amount of price changes;
• cost structures, profit margins, or strategic financial plans;
• current or future employee salaries, wages or benefits;
• whether to boycott, discourage, withhold or not to do business with or provide services to certain third-party payors, consumers, members, suppliers or competitors;
• allocation of territories, consumers, members or services;
• bids or intentions to bid;
• confidential plans regarding a member’s future product or service offerings; and
• any information a member is contractually or legally precluded from disclosing.

Conduct of Meetings

NPA’s annual membership meetings and all board meetings will follow a prepared agenda. The agenda should not include any subjects that are identified in these Guidelines as improper. Meetings should follow the written agenda and not depart from the agenda except for legitimate reasons, which should be recorded in the minutes. Minutes will be prepared after each annual meeting and all board meetings, and will include the time and place of the meeting, a list of all individuals present and their affiliations, a statement of all matters discussed and actions taken with a summary of the reasons therefore, and a record of any votes taken. If sensitive issues appear on any meeting agenda, it is advisable to consult with legal counsel in advance of that meeting. This Antitrust Compliance Policy and Guidelines also applies during any social occasion in connection with a meeting. Informal or “off the record” discussions of business topics covered by this Policy are not permitted at meetings or other NPA activities.

Membership

NPA’s membership will be based upon objective criteria reasonably related to NPA’s lawful purposes, and membership will not be denied or terminated with the effect of unreasonably restraining competition.

Information Sharing

NPA members should not share with each other directly, or through NPA, commercially sensitive information as defined above. These topics are off-limits for any discussion, whether in-person, over the phone, via email or on NPA’s e-Communities. Members should not post queries or messages on NPA’s e-Communities that are related to these topics or that may encourage or facilitate a discussion of any of these topics.

Benchmarking

If NPA (or any third-party retained by NPA) organizes or participates in a survey of members’ salaries, wages, employee benefits, costs or other price-related information, it shall comply with all pertinent antitrust precedents and guidelines and, if issues arise, with advice of legal counsel. Specifically, NPA will only organize or participate in surveys if: (a) the survey is managed by a third party that does not contribute data to the survey (such as NPA or a third-party retained by NPA), (b) the information in the survey is based on data that is sufficiently in the past and “stale”, and (c) there are enough organizations reporting data in the survey such that, with aggregation, no particular organization’s data can be identified.

Research and “Best Practices” Recommendations

All NPA activities to study and/or recommend best practices or standards will be undertaken objectively and without bias toward or against any particular member or non-member.

Independent Decision-Making by Members

NPA members’ decisions concerning competitive practices must be independent. NPA will not sponsor, approve, facilitate, or knowingly be part of any agreements, whether express or implied, that inhibit any member’s ability to make independent competitive decisions.

Lobbying and Government Petitioning

Lobbying and advocacy activities to obtain governmental action (even governmental action that would restrain competition), such as testimony before governmental bodies or court appearances as amicus curiae, generally are protected from antitrust liability so long as the restraint on competition flows from the requested governmental action and not private conduct. That protection is limited, however, and will not apply when the activity is a “sham” that abuses the legislative, regulatory or judicial process for anticompetitive gain. “Sham” activities include, for example, filing an objectively baseless lawsuit against a competitor, providing false or misleading information to administrative or judicial bodies, or disguising an attempt to interfere with a competitor’s business relationships as a valid petitioning effort. NPA’s lobbying and advocacy activities should always be legitimate attempts to procure favorable governmental action, and not a sham to obtain competitive advantage. Should any question arise regarding the legitimacy of NPA’s lobbying and advocacy activities (or that of NPA’s members), legal counsel should be consulted.