A group of competing Texas surgeons late last week settled allegations that they used their independent practice association to illegally fix prices charged to two health insurers.
The Federal Trade Commission released the proposed consent agreement with the surgeons as Congress considers legislation that would exempt physicians from federal antitrust laws, allowing them to collectively negotiate with payers.
The FTC opposes the bill sponsored by Rep. Thomas Campbell (R-Calif.), which passed the House Judiciary Committee last month.
The FTC's release of the settlement was coincidental and had nothing to do with the debate on the Campbell bill, said Alan Friedman, an attorney for the FTC's Bureau of Competition and the lead lawyer in the investigation.
The FTC began investigating the surgeons' Austin, Texas-based IPA in 1998. The probe followed a dispute between members of the IPA, known as Texas Surgeons, and Blue Cross and Blue Shield of Texas and United HealthCare of Texas.
Each insurer proposed fee reductions for general surgery in 1997, which led Texas Surgeons' 26 members to terminate their contracts. The FTC said the group orchestrated the mass boycott as well as the subsequent new fee schedule with the insurers.
The FTC said Texas Surgeons "demanded and received" an agreement from Blue Cross and United to raise general surgery fees between 12% and 40%. The FTC said the physicians' actions cost consumers, plans and employers more than $1 million in increased surgical fees in 1998 and 1999.
Texas Surgeons President Jeffrey Meynig, M.D., contends the FTC's version of events is wrong and that the physician group acted within the law.
"The rates eventually negotiated with Blue Cross were done so by individual (group practices) and were lower than the original rates, despite what the FTC says," Meynig said.
Under the settlement, the physicians admitted no wrongdoing. They agreed not to use the IPA to collectively negotiate with payers on behalf of IPA members.