AMGA Opposes FTC Non-Compete Clause Rule – Coverage & Drugs

AMGA recently sent a letter to the Federal Commerce Fee (FTC) concerning the company’s proposed Non-Compete Clause Rulerecommending that the company withdraw the proposal. Below the proposed rule, a nationwide framework could be created for contractual provisions which might be traditionally regulated by particular person states. Included in that framework could be prohibitions concerning an employer’s use of non-compete clauses, making it unlawful for an employer to enter into or try and enter right into a non-compete with a employee; preserve a noncompete with a employee; or signify to a employee, beneath sure circumstances, that the employee is topic to a non-compete. The proposed rule would apply to staff, paid and unpaid, and to unbiased contractors. It might additionally require employers to rescind present non-competes and actively inform staff that they’re not in impact.

The FTC believes that such a framework would assist to each promote competitors, shield and educate customers, and shield healthcare staff.

Within the letter, AMGA notes that whereas it will probably “admire” the intent of the FTC to “promote wholesome competitors and innovation within the market,” given the “unprecedented healthcare workforce disaster,” the proposed rule would “additional destabiliz(e) native healthcare labor markets.” AMGA particularly factors to its perception that such a nationwide framework would “hinder the coordination of affected person care and undermine competitors by growing prices for multispecialty medical teams and built-in supply techniques.

AMGA offered feedback on three factors concerning the proposed rule: (1) particular person states are essentially the most acceptable arbiters of non-compete agreements; (2) non-compete agreements shield medical group investments, making certain continued care entry for affected person communities; and (3) the proposed rule would undermine care coordination.

AMGA believes that states are greatest left to handle non-compete agreements as a result of they “are most conversant in native market situations,” and that they’re “unaware of proof indicating that states can not successfully consider the reasonableness of those contractual preparations within the healthcare setting.” AMGA factors to a number of states which have already labored to deal with the issues the proposed rule seeks to deal with, corresponding to Rhode Island and Illinois have regulated non-compete agreements for low-wage staff whereas Tennessee and the District of Columbia have excluded physicians from lots of the restrictions on non-compete agreements.

Whereas the FTC believes that eliminating non-compete agreements would cut back healthcare prices, AMGA believes it will truly improve the price of healthcare. AMGA believes that if a brand new doctor have been capable of depart one observe for an additional with no penalties, the previous observe must discover one other doctor to switch her or him, costing wherever from an estimated $300,000 to $500,000 on common in recruiting prices. That funding doesn’t account for the 2 to a few years a brand new doctor usually takes to construct their observe. Not solely will the observe must expend extra cash, however affected person care is usually disrupted and delayed when docs depart medical practices. Non-compete agreements permit multispecialty medical teams and built-in supply techniques to guard the investments they make in recruiting physicians to assist meet the healthcare wants of their communities.

“Sufferers profit essentially the most from a mannequin that’s constructed round care coordination and a fastidiously designed team-based setting,” stated AMGA President and CEO Jerry Penso, MD, MBA. “Affected person entry to their crew of suppliers is necessary for care continuity, particularly for these sufferers with power ailments. The FTC ought to prioritize the steadiness of doctor-patient relationships and never transfer ahead with a plan that might disrupt sufferers’ care.”