The 325-physician, 11-hospital Maine Health Alliance, Bangor, Maine, has agreed to stop negotiating payer contracts on behalf of its members in order to settle charges of price-fixing and collusion, federal officials announced today.
The Federal Trade Commission says it has reached a settlement that resolves charges that the physician-hospital alliance and its executive director, William Diggins, engaged in anti-competitive behavior by refusing to sign contracts with health plans that did not agree to the alliance's terms.
According to the FTC, the alliance demanded that payers not work with competing hospitals and physicians, thus driving up the price of healthcare in northeastern Maine.
"The Maine Health Alliance fixed prices not in just one healthcare sector, but two--hospital services and physician services," FTC Bureau of Competition Director Joe Simons says in a written statement. Although the alliance does not admit to any wrongdoing, Simons still calls the alleged collusion "illegal."
Alliance officials were not immediately available for comment, nor were representatives of the Maine Medical Association.
Under terms of the settlement, the Maine Health Alliance and Diggins may enter into or facilitate any agreement to negotiate payer contracts for member physicians or to set terms on which to deal with any payer, except under limited circumstances. The settlement is to be in effect for 20 years, the FTC says.
Additionally, Diggins has agreed not to negotiate on behalf of, or advise any alliance physician or hospital in payer negotiations, for a period of three years.
FTC spokesperson Mitchell Katz says that it is not the intention of the commission to shut down the alliance.
The Maine Health Alliance includes nearly 70% of the hospitals in a five-county area of northeast Maine, and more than 85% of the physicians on staff at the 11 member hospitals are themselves alliance members, according to the FTC.
The proposed settlement is subject to a 30-day public comment period through Aug. 18.