Ellen Burkett, M.D., believes she has found a safe harbor at a time when the Federal Trade Commission is stepping up scrutiny of physician groups and other healthcare entities for antitrust violations.
The FTC announced earlier this year that it has increased spending by 50% on antitrust efforts in healthcare, targeting primarily hospitals and medical groups that have attained unfair market power.
Burkett is medical director of MedSouth, an independent practice association in Englewood, Colo., that is taking advantage of healthcare information technology in trying to improve quality and boost reimbursements while complying with FTC antitrust rules.
The FTC requires IPAs and other loose associations of practices to demonstrate efficiencies to justify the higher reimbursements they can get by negotiating collectively with health plans. Under MedSouth's new arrangement, provisionally approved by the FTC in February, 126 separate practices within the IPA share clinical data via Internet hookups and comply with clinical guidelines for care.
MedSouth asked the FTC for an opinion in advance because it did not want the arrangement to be found illegal later, Burkett says.
Denver-area groups have been under FTC scrutiny and were involved in three of the five antitrust settlements announced by the FTC so far this year.
"There are groups all over the nation that are negotiating illegally," Burkett says, adding that health plans sometimes report groups to the FTC.
Mike Cowie, assistant director of the bureau of competition at the FTC, says physician groups "want clout when they are negotiating, yet at the same time they want to be independent."
David Balto, a former FTC lawyer in the Clinton administration, says groups are "easy cases" to settle because "when they hit you with a subpoena, you can pay several hundred thousand dollars in court costs or sign a consent decree."
To comply with FTC requirements, MedSouth CEO Andrea Chase says the IPA will install an electronic data record system using eMaxx software provided by MedPlus, an application service provider in Cincinnati. Each office will be able to access patient records, lab reports, radiology records, treatment plans, prescription information and, in some cases, the patient's medical record, Burkett says.
In addition, Chase says MedSouth will monitor physician performance on 60 guidelines for clinical care, and it has agreed to remove doctors who do not meet the criteria.
Burkett says MedSouth paid "upwards of $100,000" in legal fees to work out the arrangement, and the software to run its new system was also a "substantial financial burden," but she would not reveal the cost.
Chase says she believes health plans will be willing to pay higher rates because they will benefit from a more efficient referral system and instant access to outcomes measurements. She adds that member practices will be more efficient because they can transfer clinical information via Internet portals rather than faxes.
But Denise Gunter, an attorney with Kilpatrick Stockton, in Winston-Salem, N.C., says that "clinical integration" may not be a viable option for most groups seeking antitrust clearance.
"You have to have a strong infrastructure," she says.