The Greater Rochester (N.Y.) Independent Practice Association last week became only the second clinically integrated IPA to get a favorable advisory opinion to operate from the Federal Trade Commission’s Bureau of Competition’s healthcare division, but experts disagree if the organization’s business model can be used as template for other groups with similar ambitions.
GRIPA officials, however, point to their organization’s information technology component as a key factor in the FTC ruling, and note that—even if forming a clinically integrated IPA is not what other organizations have in mind—similar systems can be useful in other areas.
“The tools developed for clinical integration are tools necessary to participate in pay-for-performance,” said GRIPA President Gregg Coughlin, adding that they can also be used to facilitate data-gathering for the myriad quality reports being developed by payers, employers, government agencies and other healthcare organizations and regulators.
The FTC’s ruling is particularly important because it allows the GRIPA physicians to practice independently while collaboratively negotiating with payers through a third party (freeing them from getting bogged down in the business—rather than the clinical—aspects of their practice), makes them part of a recognized quality-improvement initiative thereby providing a rationale for demanding higher fees, and provides the infrastructure needed for participating in quality-improvement and reporting initiatives.
Since 1996, the FTC has allowed doctors to form clinically integrated, independent physician associations with the power to set “horizontal agreement on prices” across a given market region, but only a few have been created. The FTC is quick to note that there is no set equation to judge the merits of each organization.
“Each of these, when presented to us, get looked at individually,” said an FTC staffer who asked not to be named. “None of them are particular examples of how things should be done. We are reactive to these cases, and we’re interested in what the experts think will work (in a particular market) and why.”
The language used by the FTC is telling. Instead of saying it “approves” of GRIPA’s plans, it stated that it will not recommend an antitrust challenge to the proposal.
In short, the FTC staffer said IPAs must demonstrate why horizontal price agreements between providers are reasonably necessary for efficiency enhancements that will benefit consumers and must show why these agreements are reasonably necessary for the success of an operation that will benefit the public in terms of healthcare quality and cost.
GRIPA follows Denver-based MedSouth’s 205-physician network as only the second clinical integration to get the FTC’s formal blessing, although GRIPA’s attorney, Christi Braun, of Washington-based Ober, Kaler, Grimes & Shriver, said there are three others—in Chicago, San Francisco and Waukesha, Wis.—being allowed to operate without having a positive FTC letter on file.
GRIPA’s path was difficult. Braun said achieving clinical integration requires physicians’ money, time and commitment with no guarantees that federal regulators won’t decide that their network does more to stifle competition than to improve quality.
The FTC staffer, however, says the number of favorable opinions is small because the number of requests for opinions has been small. “What comes in sets the universe for what goes out,” he said.
Although the Justice Department in general and the FTC in particular have not established a laundry list of dos and don’ts, GRIPA Chief Medical Officer Eric Nielsen said “they look over what an organization has and decides if it’s enough.”
What GRIPA has that the FTC approves of, Nielsen said, is the following: an electronic information exchange for sharing clinical data, an established procedure for developing clinical guidelines, a monitoring system to check if physicians are following the guidelines and a method for sanctioning them if they don’t.
The FTC staffer said that another point in GRIPA’s favor is that health plans can choose to contract with its network of almost 720 physicians individually or through GRIPA. “GRIPA should not be able to force anyone to buy their product who doesn’t want to buy their product,” he said.
Nielsen said GRIPA has set its own bar high, even though it isn’t sure where the FTC’s bar is located. Because of this, Braun thinks GRIPA has developed a model others can use.
“The FTC is not going to tell physicians how to provide clinical integration, but I have to disagree with the statement that the GRIPA program would only work for GRIPA,” she said. “I don’t think it’s a stretch to say other groups can do the same types of things and achieve the results that GRIPA thinks it will achieve.”
Coughlin said another factor the FTC liked was the organization’s use of a central data repository that physicians can access via a Web portal to view laboratory results and diagnostic images. Nielsen noted that the depository will also be able to track an individual physician’s performance and the performance of the whole network.
Nielsen noted that what GRIPA developed is not an electronic medical record and is more than just a registry of patients organized by disease or condition. What it does—via the database and the portal—is collect and organize claims data, lab results and diagnostic images.
“It does not do billing for the physicians,” he said. “We’re getting information from other sources and providing it to our physicians. We’re not asking them to enter a lot of data. ... Sharing information will lead to better care, that’s the primary thing.”
The information-sharing aspect is strengthened by an agreement among GRIPA’s physicians to refer patients to the appropriate specialists within the association.
“We’d like to have all the specialties covered,” Nielsen said. “If they (patients) go outside the group, we’ll lose the lab results and X-rays ordered by other physicians.”
He adds that patient information is available only to physicians who have a relationship with the patient and “no other provider has access to that particular patient.”
GRIPA physicians must agree to attend training sessions on the network’s IT system and are also provided with a tablet computer and technical support in helping them comply with the program’s requirements, the FTC’s opinion letter said. Nielsen said GRIPA is working primarily with two vendors (Irving, Texas-based Healthvision for the portal and Raleigh, N.C.-based DocSite for the disease registries) and has a 10-person, in-house IT department working on implementation and interoperability issues.
This arrangement helped GRIPA’s cause with the FTC.
“We agree with GRIPA’s arguments that implementing a program in which different subsets of physicians are ‘in’ the program for different payer contracts, while perhaps theoretically possible, likely would be difficult to practice,” the FTC opinion letter stated. “Doing so could adversely affect the provision of care under the program. It also could interfere with GRIPA’s ability to effectively gather data, and monitor and evaluate physician performance under the program.”
The Rochester market is dominated by two payers—Excellus Blue Cross and Blue Shield and Preferred Care—which have about 95% of the market in a 70%-25% split, and Braun said the FTC’s opinion on GRIPA will probably do little to alter provider complaints that the balance of power is stacked against them.
“Payers do have a lot of market power, but the way they acquired it—through natural growth and mergers—is considered legal,” she said. “So, does what GRIPA is doing give GRIPA more market power? If it did, the FTC wouldn’t have approved it.” The FTC’s letter appears to confirm Braun’s statement.
“It appears unlikely that GRIPA’s proposed program would permit it or its physician members to exercise market power or have anti-competitive effects in the market for physician services in the Rochester area,” according to the letter. “However, absent market power, the presence of non-GRIPA physicians and alternative networks, and large, sophisticated payers in the area make it likely that the market would effectively constrain individual GRIPA physicians’ ability to obtain supra-competitive prices for their professional services.”
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