Rates for directors and officers (D&O) liability coveragefor healthcare organizations climbed in the third quarter due inpart to antitrust concerns arising from the industry's changingbusiness models pursued in response to the healthcare law,according to Marsh.

In a Marsh Risk Management Research briefing, Marsh says, “Sincepassage of the ACA in 2010, the healthcare industry has undergonerapid consolidation. Many healthcare organizations have formedaccountable care organizations (ACOs), joint ventures and loosealliances and networks aimed at better coordinating services,reducing costs and improving the quality of care.”

However, because these changes mean the organizations areworking more closely together and sharing information, “someinsurers have expressed concerns about antitrust issues.”

Marsh says average primary D&O rates for midsize and largehealth systems increased 9.6% in the quarter. The broker says 73%of organizations saw rate increases, while 13% saw decreases and13% remained flat.

For smaller healthcare organizations—which Marsh defines as $150million or less in assets or annual revenues, and fewer than 1,000employees—Marsh says D&O rates were up 12.7% in the quarter,with 96% of renewals showing increases.

Marsh says not all insurers were seeking dramatic changes, butsome are pulling back on offering full policy limit defensecoverage.

“Regulators have made clear their intentions to continuepursuing antitrust cases in healthcare,” Marsh notes, stating thatFederal Trade Commission Chairwoman Edith Ramirez has identifiedhealthcare, technology and energy as major areas of focus.

“Although the ACA provides for formal safe harbors for federallyrecognized ACOs and the FTC has said it will generally recognizesimilar protections for such arrangements that are not federallyrecognized, this area has yet to be tested,” states Marsh.

Aside from antitrust concerns, Marsh says the industry's shiftto ACOs can “alter the risk profiles of healthcare organizations,”prompting insurers to seek more information about ACO formation andstrategy.

For 2014, Marsh says healthcare risk managers should expectadditional rate increases for D&O and should be ready to answerunderwriters' questions about strategies related to the formationof ACOs and other networks.