Two high-profile federal antitrust lawsuits against healthcare providers in Colorado and New York are headed to trial as settlements in the cases appear unlikely.
In the first case, the Federal Trade Commission sued a group of Colorado physicians, claiming it engaged in anti-competitive behavior directed at managed-care plans (May 19, p. 8).
In the second, the U.S. Justice Department challenged the proposed merger of two New York hospital systems, claiming their consolidation is designed to insulate them from price competition (June 16, p. 2).
Both cases represent the federal government's first antitrust lawsuits against providers in several years.
Representatives from the New York systems-Long Island Jewish Medical Center and North Shore Health System-and the Justice Department were expected to meet this week with a federal judge in New York to set a schedule for taking the case to trial.
Hospital system executives said they want their day in court so the merger can proceed.
"Hopefully, at some point, the Justice Department will realize the silliness of what they're doing," said David Dantzker, M.D., president and chief executive officer of Long Island Jewish.
The government's antitrust challenge is noteworthy because it's the first time the federal government has tried to stop a hospital merger in a major urban market, where competitive boundaries are far less defined than in smaller markets. The two systems collectively operate 12 hospitals.
Meanwhile, attorneys for Mesa County (Colo.) Physicians IPA have submitted a nine-page response to a lawsuit filed last month by the FTC.
The FTC has accused the independent practice association of engaging in anti-competitive tactics, including price fixing and refusing to deal with payers. The group of 192 physicians has denied the charges.
The FTC's administrative antitrust complaint has been assigned to a federal administrative law judge, who is set to meet with both sides this week to set up a hearing schedule.
Thomas McMahon, a Denver antitrust attorney representing the IPA, said the size of the group is the major sticking point between the two sides. The FTC said the physicians in the group represent at least 85% of the doctors in private practice in Mesa County and at least 90% of the primary-care physicians.
In its response, the IPA disputed those figures but didn't offer different market-share estimates.
"The fact that this client, which is by no means a large corporate enterprise, has decided to fight the FTC on this particular point underscores its belief that the size of the organization is essential to its providing the sort of quality medical services in the community it has provided," said Mark Horoschak, a Charlotte, N.C., attorney also representing the IPA.