In another sign of its ongoing scrutiny of physician prices, the Federal Trade Commission last week signed a consent decree with a New Mexico physician-hospital organization and independent practice association.
The consent decree was the 19th related to physician price-fixing in three years and stemmed from one of 21 physician pricing complaints the FTC filed in that period.
On Sept. 28, the White Sands Health Care System, a joint venture physician-hospital organization, or PHO, that includes 77-bed Gerald Champion Regional Medical Center-the only acute-care hospital in Alamogordo, N.M.-and the Alamogordo Physicians Cooperative, settled with the FTC. Their agent, James Laurenza, and his company, Louisville, Ky.-based Dacite, also settled.
The FTC alleged that White Sands jointly fixed prices for physician and nurse anesthetist services to health plans and other payers. White Sands and its members refused to contract individually with payers and would sign only contracts that Laurenza negotiated on their behalf in violation of the FTC Act, which prohibits unfair methods of competition, the FTC alleged. "White Sands' members collectively accepted or rejected these payer contracts and refused to deal with these payers individually," the FTC alleged in its nine-page complaint.
The four-page consent decree prohibits the parties from negotiating with or refusing to deal with payers or settle terms on behalf of physicians collectively. White Sands includes 31 nonphysician providers, five of whom are nurse anesthetists. The independent practice association, or IPA, represents 45 physicians, 84% of whom practice independently in the area.
Rhonda Cross, White Sands' director of client services, said the organization would continue to operate. "We won't be doing a whole lot differently," said Cross, who noted that the one-year investigation has cost the PHO more than $100,000. Cross disputed the allegations in the FTC complaint and said White Sands would continue to contract with Laurenza and Dacite.
White Sands' attorney, Robert Wilson Jr., of the firm Smith Moore in Raleigh, N.C., said it made sense to resolve the matter. "We were quite pleased with the resolution of the case because it permits White Sands to operate and establishes parameters for it to operate," he said.
Modern Healthcare first reported in April that the FTC was investigating price-fixing allegations in three New Mexico cities (April 19, p. 12). Hospitals, payers and IPAs in Alamogordo, Roswell and Farmington acknowledged receiving civil demand letters from the FTC.
Since then, Roswell-based Southeastern New Mexico Physicians IPA has signed a consent decree. Only two IPAs, Fort Worth, Texas-based North Texas Specialty Physicians and Evanston, Ill.-based ENH Medical Group, have challenged the FTC. An administrative law judge is scheduled to release a decision in the North Texas case by Nov. 13 and the Evanston doctors are in administrative litigation.