Elevated consolidation within the well being care sector continues to attract media consideration and antitrust scrutiny from quite a lot of regulators together with the Federal Commerce Fee, the Antitrust Division of the Division of Justice and state attorneys normal. Because of this, well being care suppliers and hospital techniques that are contemplating mergers, acquisitions and different sorts of strategic partnerships or joint ventures ought to take steps to make sure that they don’t violate antitrust legal guidelines when sharing info concerning the enterprise case for a specific transaction and also needs to needless to say failing to shut a transaction can flip a possible associate right into a better-informed competitor. Nonetheless, it isn’t at all times clear what info could also be shared, or with whom. Additionally it is tough to know when a typical non-disclosure settlement could fall in need of the specified protections. Basically, the very best apply is to ascertain guardrails across the diligence course of by delegating the accountability for reviewing documentation for competitively delicate info (and doubtlessly scrubbing such documentation to take away any competitively delicate info) to a 3rd occasion or a particular group of the client’s staff (a “Clear Crew”).  

Talking usually, a Clear Crew’s goal is to filter and take away competitively delicate info from the stream of data flowing from a vendor to a purchaser. A Clear Crew could accomplish this by, amongst different issues, redacting sure info (together with, however not restricted to, strategic plans, enterprise valuations, doctor compensation insurance policies, payor charges, facility efficiency, contractual phrases for particular prospects or suppliers, and future plans comparable to expansions or different capital expenditures) from paperwork {that a} vendor gives to a purchaser within the due diligence part of a transaction. A Clear Crew might also combination or roll-up sure info in order that it may be offered to the client in a abstract report or different method that doesn’t reveal competitively delicate particulars. The checklist beneath highlights three suggestions with respect to the institution and work of Clear Groups, however it isn’t supposed to be an exhaustive checklist of potential antitrust issues.

1. Use non-competitively delicate info, if doable

Whereas the change of sure competitively delicate info concerning the events to a possible transaction is a essential a part of the planning course of, regulators are involved that, if not executed rigorously and thoughtfully, the change of data might give the events a possibility to interact in present or future anticompetitive conduct. Thus, the events ought to, earlier than responding to any request for competitively delicate info as a part of a due diligence request, contemplate whether or not there’s any publicly accessible or in any other case non-competitively delicate info which might fulfill the request. For instance, historic monetary statements, tax returns, and asset depreciation schedules are usually not thought of to be competitively delicate and could be workable substitutes for sure competitively delicate info comparable to present or future budgets or capital expenditure plans.

2. Select the appropriate crew

Cautious consideration must be given to the composition of the Clear Crew. Usually, it’s preferable to have a 3rd occasion, comparable to a purchaser’s exterior authorized counsel, exterior antitrust counsel or monetary advisers, function the Clear Crew. Any third occasion chosen ought to enter into an settlement (the “Clear Crew Settlement”) with the client and vendor setting forth the third occasion’s duties and obligations, together with the responsibility to keep up the confidentiality of any info supplied to it and to not share any competitively delicate info in an unredacted, disaggregated or in any other case unapproved type with the client or its staff. Moreover, the id of every worker or consultant of the third occasion must be disclosed to the client and vendor and such worker or consultant ought to execute an acknowledgment of such particular person’s obligations as a consultant of the third occasion beneath the Clear Crew Settlement. Importantly, the Clear Crew Settlement acts as a complement to, and never a alternative of, the non-disclosure settlement that the client and vendor ought to have entered into on the very outset of their negotiations.

Nonetheless, it isn’t at all times doable to interact a 3rd occasion solely for the aim of serving as a clear crew. Hiring a 3rd occasion could also be expensive and time consuming, and the popular third occasion could not comply with serve in a Clear Crew capability for a given transaction. Subsequently, the duty could also be left to sure staff of the client, which presents its personal challenges. Staff of the client could function members of a Clear Crew, supplied that such staff should not have (and will not be moderately more likely to have within the close to future) obligations regarding strategic planning, direct pricing, negotiating payor agreements, gross sales and advertising and marketing, doctor compensation or different duties which might enable them to make use of any competitively delicate info revealed to them in an anti-competitive method on behalf of the client. It may be tough to search out the appropriate stability as a result of every worker ought to (1) be sufficiently educated concerning the potential transaction and their accountability to forestall the inappropriate disclosure of competitively delicate info, however (2) not have (and will not be more likely to have within the close to future) any job obligations which might allow such worker to behave in an anti-competitive method primarily based on the knowledge supplied to them pursuant to their Clear Crew duties. 

3. Set up a clear room

To facilitate the switch of data between the events, the events want to ascertain a mechanism by which the vendor can present info which is doubtlessly competitively delicate to the Clear Crew, which is able to then evaluate such info and move it alongside to the client if applicable. Due to the big quantity of paperwork which can should be reviewed, finest apply is to ascertain a separate digital knowledge room through which all paperwork to be supplied by the vendor may be uploaded by the vendor and reviewed by the Clear Crew (the “Clear Room”). The client and its staff and representatives that aren’t on the Clear Crew shouldn’t have entry to the Clear Room. The Clear Crew ought to then evaluate every doc supplied and log whether or not the doc incorporates any competitively delicate info. If the Clear Crew and antitrust counsel for the vendor concur {that a} doc incorporates no competitively delicate info, then the Clear Crew can then ship the doc on to a separate digital knowledge room (the “Strange Knowledge Room”) which the client and its staff and representatives could entry. The Strange Knowledge Room and Clear Room ought to have an identical file hierarchy for ease of use and they need to even have clearly distinguishable names so as to be certain that a doc shouldn’t be mistakenly uploaded to the Strange Knowledge Room previous to evaluate by the Clear Crew. If a doc does comprise competitively delicate info, then the Clear Crew ought to comply with procedures established by the events’ respective antitrust counsels for redacting or aggregating the knowledge earlier than sending to the Strange Knowledge Room, or withholding such info fully if applicable. 

 is an legal professional in Thompson Coburn’s Well being Care group.