The Federal Trade Commission announced that Alta Bates Medical Group, a 600-physician independent practice association in Californias East Bay Area, has agreed to a consent order settling allegations that its involvement in negotiations with payers amounted to price-fixing. The group does not concede in the proposed order that its conduct violated the law.
According to the FTCs complaint, Alta Bates Medical Group purported to engage in the legal practice of relaying contract offers and responses between health plans and its member physicians but in fact determined the rates and terms that were asked for and accepted, without soliciting input from members, as well as discouraged members from dealing independently with health plans with whom the association negotiated contracts. The FTC also alleged that the association attempted to exclude its members from participating in an open-panel plan offered by Kaiser Permanente Insurance Corp., co-owned by Alta Bates Medical Group competitor Permanente Medical Group.
Under the proposed order, subject to final approval after a 30-day window for public comment, Alta Bates Medical Group would be prohibited from negotiating or refusing to deal with payers on behalf of its members, and it would have to notify the FTC before initiating contact with health plans regarding contracts. Health plans would be able to terminate contracts reached with the association since 2001.
In a news release regarding the settlement, the medical group points out that the agreement allows the organization to continue acting as a messenger in negotiations with health plans. The group "strongly disagrees" with the FTC statements indicating the organization or its physicians ever refused or threatened to refuse to do business with any health plan.
"We chose to enter into a settlement agreement so that we can continue to focus on the provision of outstanding healthcare to our community, rather than be distracted by legal proceedings with the federal government," CEO James Slaggert said in the release.