Houston doctors' group settles antitrust charges

Another physician group has settled federal antitrust charges that arose from its use of the messenger model of dealing with health plans.

The case against Memorial Hermann Health Network Providers, Houston, is one of about a half dozen that the Federal Trade Commission has settled since the beginning of 2002. Settlements, which together involve tens of thousands of doctors, have occurred in Texas, California, Colorado, Maine, Missouri and elsewhere.

Memorial Hermann officials said the consent agreement with the FTC offers guidance on how to follow a confusing area of law.

"We are all getting some much-needed clarification [on an issue] that has frustrated physician networks for many years," MHHNP President Jim F. Waldron, MD, said in a statement.

The group, a nonprofit corporation with about 3,000 physicians, late last year agreed to stop exchanging information among physicians about any one doctor's willingness to deal with a health plan or other payer, or about the terms on which the physician is willing to deal with the payer. In addition, the group agreed not to enter any agreement between doctors to refuse to deal with a payer based on price or other significant competitive terms.

The consent agreement settles FTC charges that the group violated antitrust laws by fixing prices in contract negotiation with managed care companies. The group's actions increased costs for consumers, employers and health plans, the commission alleged. The consent agreement is not an admission of wrongdoing, and it does not involve sanctions or fines.

"We believe we were operating within the law," Dr. Waldron said. "MHHNP made business decisions in what was a confusing area of federal law. However, the FTC has offered some clarification, and, as a result, we have altered our business models."

Antitrust laws prohibit independent physicians from jointly negotiating with health plans. The FTC views independent doctors the same as it would any competing companies that sell their product to consumers.

The messenger model allows a designated representative to carry information between physicians and a health plan during contract negotiations to make such dealings more efficient. But the messenger must bring contract information back to physicians individually, and each doctor must decide for himself or herself whether to accept the plan's offer.

In the MHHNP case, the commission alleged that the group negotiated contracts for its physicians and sought high fees and other terms that members could not have received if they had negotiated individually.

The FTC's complaint claimed that the physicians' group periodically polled members about the minimum fee for services that each doctor would accept. The commission alleged that the group would use the information to calculate a minimum acceptable fee and refuse to accept any health plan offer that did not meet that minimum. The government also claimed that MHHNP had discouraged physicians from contracting directly with plans.

"The consent agreement with Memorial Hermann Health Network Providers is designed to remedy MHHNP's allegedly anticompetitive price-fixing practices," the FTC said in a statement.