Two Denver-area physician groups agreed to settle charges by the Federal Trade Commission that they fixed prices and orchestrated boycotts to boost their fees from insurance companies.
The FTC complaints alleged a wide range of anticompetitive conduct by 41-member Physician Integrated Services of Denver, which serves patients in the southern part of the metropolitan area, and 45-member Aurora Associated Primary Care Physicians, in a suburb east of Colorado’s capital city.
The settlement, which did not impose monetary penalties, was designed to prevent future anticompetitive activity by the doctors, the FTC said in a written statement.
The FTC issued complaints about both physician groups. Each complaint also named a nonphysician consultant, Marcia Brauchler, who negotiated contracts with payers on behalf of the doctor groups.
Antitrust law allows physician networks to use agents to negotiate contracts under a “messenger model” arrangement, which requires that doctors either unilaterally accept or reject the contract terms.
The FTC alleged that the two groups and Brauchler did not use a legitimate messenger model but instead “orchestrated boycotts and agreements among physicians to fix prices and other terms they would accept from payers.” In the case of the Aurora-based doctor group, the FTC said, Brauchler created a “Confidential AAPCP Play Book,” complete with instructions for assuming “aggressive” and ‘‘hostile” stances when meeting with payers, and she encouraged doctors to “reject their initial fees offers as too low.”
According to the FTC, the two groups “successfully used coercive tactics to induce health plans to offer higher fees to member physicians,” including advising members to terminate or threaten to terminate their pre-existing individual contracts with payers.
“These cases reflect our ongoing effort to ensure that consumers are protected from anticompetitive activity in the healthcare sector,” said Joseph Simons, director of the FTC’s Bureau of Competition. “The conduct challenged here had the purpose and effect of raising prices for physician services, and the physicians were not engaged in any legitimate cooperative activity that could justify agreements on fees.”
Under the settlement, the two groups will be greatly restricted in how they can deal with insurance companies in contract negotiations. For instance, they will be barred from exchanging information about the terms or conditions on which any physician is willing to deal with an insurance company.
The FTC said the two groups are not prohibited from participating in joint negotiations as long they have “clinically integrated joint arrangements” involving risk sharing and incentives aimed at getting members to control costs and improve quality.