Twenty-nine Tampa, Fla., surgeons and their consulting firm agreed last week not to engage in price-fixing as part of a settlement with the U.S. Justice Department.
It marks the first time a consulting firm has signed a consent decree in a federal physician antitrust case, according to the firm's attorney, Jeff Miles of Ober Kaler Grimes and Shriver in Washington.
The Federation of Certified Surgeons and Specialists, a network of general and vascular surgeons, was charged with illegally engaging in joint contract negotiations or boycotts to force health plans to accept elevated fees, according to the Justice Department.
Under federal antitrust law, competitors can't jointly set prices for their services.
The government alleged that each surgeon in the network gained an average of $14,097 annually as a result of price fixing. The doctors performed 87% of surgeries at five Tampa hos-pitals in 1996, according to the Justice Department.
Also charged was Pershing Yoakley and Associates, an accounting and consulting firm based in Knoxville, Tenn. The firm's Clearwater, Fla., office acted as a third-party messenger, which communicates with health plans on behalf of competing physicians. Third-party messengers are legal, but physicians must decide individually whether to accept or reject a health plan contract.
According to the Justice Department, the consulting firm told health plans the surgeons would terminate their contracts and refuse to participate in the plan's network unless the plan contracted with all the surgeons under terms proposed by Pershing Yoakley. In at least one instance, the department said, Pershing Yoakley succeeded in obtaining higher fees.
"I think it is a signal to those advising participants in the healthcare sector that they have to be careful about their own behavior and advice," Miles said.
According to the settlement, the parties admitted no wrongdoing.
Pershing Yoakley President Ed Pershing said his firm has acted as
a third-party messenger for other clients and has "been in full compliance with the law. This is an exception." He called physician managed-care negotiations "a complex area of the law."
An attorney for the physicians, David Ettinger of Honigman Miller Schwartz & Cohn in Detroit, said the surgeons don't believe they broke the law, but they "settled this because like other physician groups, they don't have the resources to contest the matter."
The settlement, filed in U.S. District Court in Tampa, must be approved by the court.