In a major cave-in by the Federal Trade Commission, a group of Colorado physicians once accused of illegal price fixing will be able to keep their network intact with little more than a slap on the wrist.
Last week, the FTC issued a proposed consent agreement settling antitrust allegations against the 180-physician Mesa County Physicians IPA, based in Grand Junction, Colo.
The physicians' attorney, who negotiated the terms, formerly headed the commission's healthcare antitrust division.
Under the settlement, the physicians won't have to dismantle their network, which includes at least 90% of the primary-care doctors in Mesa County. When the FTC sued the physicians last May, it said it wanted the network to give up control of as much as two-thirds of its primary-care roster (May 19, p. 8).
Instead, the physicians essentially have to promise not to do some of the things that got them into trouble but do not have to admit any wrongdoing. The proposed consent agreement would:
Bar the IPA from collectively negotiating prices for its members.
Prohibit it from refusing to contract with payers on a collective basis.
Prevent it from acting as the physicians' exclusive bargaining agent.
Block its physicians from swapping information about terms negotiated with payers.
Abolish its contract review committee, which collectively negotiated contracts for the physicians.
In its initial complaint, the FTC characterized the IPA as "anti-competitive." The commission said the doctors used the IPA and its stranglehold over the market to fix prices charged to some payers and to refuse dealing with others. It also said the IPA's exclusive contract with the Rocky Mountain HMO hindered other payers from entering the market.
FTC officials downplayed the significance of letting the IPA live, saying the real issues with the case were resolved to their satisfaction. "The concern was that they were not agreeing to contract with anyone else but Rocky Mountain HMO," said Robert Leibenluft, assistant director of the FTC's Bureau of Competition. "Or they were charging those other payers more than Rocky Mountain."
Leibenluft said the settlement allows the IPA to retain its market share because its doctors negotiate with plans outside the IPA's umbrella.
The IPA's attorney, former FTC official Mark Horoschak whom Leibenluft replaced, was gracious in victory.
"It shows the evolution of thinking in Washington in a positive way," said Horoschak, an attorney with Womble Carlyle Sandridge & Rice in Charlotte, N.C. "They took a look at whether structural relief was necessary, especially in a rural area where the downside (of breaking up the IPA) would be significant. Change can be achieved through less severe means."
The settlement is open for public comment until April 20.