The Federal Trade Commission is investigating whether Advocate Health Partners, a Chicago-area physician-hospital organization, violated antitrust laws by negotiating fees for about 2,000 independent physicians.
The PHO received a subpoena from the FTC in June, a fact confirmed in an interview today by Ed Domansky, spokesperson for Oak Brook, Ill.-based Advocate Health Care, the PHO's parent. Advocate, with 10 hospitals and 600 directly employed physicians, is the largest provider in the Chicago area.
The FTC has a policy of not commenting on such investigations.
Domansky says the group is cooperating with the FTC and Advocate officials do not believe the group is violating antitrust laws.
FTC officials have been investigating and often negotiating settlements with PHOs and independent practice associations around the country that are involved in fee negotiations for their physicians.
While physician groups usually opt for settlements, the FDA has said it has had less success with large hospital organizations, which have greater resources to fight the charges.
Generally, FTC officials have said, a group that negotiates fees for independent physicians must accept insurance risk through capitated contracts or by becoming clinically integrated, an arrangement where the physicians share clinical information.
Advocate has been getting into contractual disputes with some of the area's largest payers, and the sticking point reportedly has been asking for higher reimbursements for its independent physicians.
A year ago, during a contract dispute between Advocate and Chicago-based Blue Cross Blue Shield of Illinois, the Blues plan filed a federal antitrust lawsuit against Advocate.
The lawsuit, filed Oct. 4, 2002, in U.S. District Court for the Northern District of Illinois, accused Advocate of restraint of trade, group boycott and illegal tying arrangements in violation of the Sherman Act. But the lawsuit was dropped when both sides signed a new contract, the terms of which were not revealed.
Now, Domansky says, Advocate is at a negotiating impasse with Minnetonka, Minn.-based UnitedHealthcare for contracts--including one for its PHO--that expire Dec. 31.