FTC Bars Texas Physician Group from Joint Price Negotiations

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On May 10, the Federal Trade Commission (FTC) announced that an independent practice association representing 900 physicians in the Amarillo, Texas, area agreed to enter in to an FTC Consent Order barring it from jointly negotiating the rates it charges insurance companies. In a complaint filed with the order, the FTC alleged that Southwest Health Alliances, Inc. d/b/a/ BSA Provider Network (Southwest Health), has been in violation of federal antitrust law for over a decade by fixing the prices its member doctors charged insurers. In its complaint the FTC alleged that this conduct resulted in higher prices for consumers and businesses. The proposed Consent Order, which will become final after a 30 day public comment period, is available at http://www.ftc.gov/os/caselist/0910013/110510southwestagree.pdf.

Southwest Health is a non-exclusive, independent multi-specialty practice association comprised of multiple, independent medical practices with a total of approximately 900 physician members, of which approximately 300 are devoted to primary care, in the Amarillo, Texas, area. The FTC complaint alleges that, for over a decade, Southwest Health violated the antitrust laws by facilitating, entering into, and implementing agreements to fix the prices and other terms at which it would contract with health plans. Importantly, the FTC alleges that Southwest Health has not been clinically or financially integrated to create efficiencies sufficient to justify such joint negotiations, and the messenger model used by the network was inadequate because Southwest Health used the prices in its own fee schedule (Southwest Health had a fee schedule for self-insured employers) as a signaling device as to whether its members should accept or reject offers it “messengered.”

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Published In: Antitrust & Trade Regulation Updates, Consumer Protection Updates, Health Updates, Insurance Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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