Government
California IPA settles price-fixing charges by FTC
■ The commission said the consent order does not prohibit doctors from jointly negotiating with insurers through other legal alternatives.
By Amy Lynn Sorrel — Posted June 25, 2009
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A California independent practice association settled allegations by the Federal Trade Commission that the physician group engaged in illegal price-fixing when it negotiated payer contracts on behalf of members without any evidence of risk-sharing or cooperative clinical activities.
The FTC accused Alta Bates Medical Group of threatening not to deal with various insurers unless they agreed to doctors' demands for higher rates on individual fee-for-service contracts, a charge the physician group denies. The alleged actions "restrained price and other forms of competition among physicians in the Berkeley and Oakland, Calif., area and harmed consumers by increasing the prices for physician services," the commission said in a statement.
The proposed consent order -- agreed to June 4 and subject to final commission approval -- prohibits Alta Bates from facilitating fee-for-service contracts on physicians' behalf. The 600-member group also must notify the FTC before initiating contract deals with health plans.
Under the settlement, the doctor group admitted no wrongdoing. Alta Bates CEO James Slaggert said the group opted to settle rather than undertake a lengthy and expensive appeal "so that we can continue to focus on the provision of outstanding health care to our community."
But the FTC stressed that the settlement does not prevent the doctor group from negotiating jointly with insurers in one of two legal ways: through financial integration with risk-sharing contracts or through clinical integration with the goal of setting uniform quality measures. The federal complaint did not challenge Alta Bates' collectively negotiated capitated contracts with some insurers.
The consent order follows a series of recent FTC opinions that have approved collaborative arrangements between physicians and other entities that appear to benefit patient care.
The American Medical Association has criticized the commission's standards as too stringent for smaller physician practices, which typically cannot afford large-scale quality and cost-saving integration measures. The AMA continues to push the FTC for a more flexible enforcement policy allowing physicians to negotiate fairly with large health plans without hitting antitrust barriers.