Brown & Toland Medical Group of San Francisco, after initially vowing to fight the Federal Trade Commission, has settled the agency's charges of price fixing and other antitrust violations.
The 1,545-physician group signed a consent decree prohibiting it from negotiating with payers on behalf of physicians or setting contract terms for physicians without further clinical or financial integration.
The settlement also terminates existing contracts deemed by the FTC to have been negotiated improperly.
Brown & Toland formed a PPO in 2001 and began negotiating on behalf of 600 physician members.
In a complaint filed last year, the FTC said illegal behavior on the part of Brown & Toland had raised physician prices in the San Francisco area.
The multispecialty group vowed to fight the charges, saying it "firmly believes it has followed the FTC's own guidelines, and strongly disagrees with the allegations."
Bown & Toland's Chief Executive Officer Gloria Austin said the settlement allows the IPO to offer a PPO product.
"We are pleased to proceed forward with our PPO program," said Austin, who said the IPO is moving towards clinical integration. "As a result, it is clear that we are well on the way to addressing the issues raised by the complaint. We have put the litigation behind us in order to focus our resources on patient care."
Austin said the FTC settlement does not constitute an admission of wrongdoing.
Since 2002, the FTC has accused at least 14 physician organizations of price fixing and has reached consent decrees with 13 of those groups, said John Wiegand, an antitrust attorney in the FTC's San Francisco office.