A cooperative of 25 rural hospitals and 70 physicians in southwestern Minnesota agreed to refrain from "coercive tactics" when negotiating health-plan contracts on behalf of its members, resolving an antitrust complaint brought by the Federal Trade Commission. The FTC's administrative complaint more broadly attacked the joint contracting practices of the Minnesota Rural Health Cooperative, but a law passed by the state Legislature establishes a process in which state officials review contracts negotiated by provider cooperatives, putting the approved contracts beyond the reach of the antitrust laws.
The settlement agreement, which is subject to public comment until July 19, does not reflect an admission of wrongdoing by the cooperative or that the FTC's version of the facts is correct. "We're pleased to have the FTC investigation completed, and we look forward to complying with the Minnesota statute and the FTC consent order going forward," says David Balto, a lawyer for the cooperative.
The coercive tactics alleged by the FTC include threats to terminate contracts with insurance plans and telling plans that they couldn't negotiate individually with the cooperative's members. The settlement agreement requires the cooperative to allow health plans to renegotiate their contracts.