Evanston Northwestern Healthcare Corporation and ENH Medical Group, Inc.; Analysis To Aid Public Comment, 18397-18399 [05-7244]
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Federal Register / Vol. 70, No. 68 / Monday, April 11, 2005 / Notices
FEDERAL RESERVE SYSTEM
Change in Bank Control Notices;
Acquisition of Shares of Bank or Bank
Holding Companies
The notificants listed below have
applied under the Change in Bank
Control Act (12 U.S.C. 1817(j)) and
§ 225.41 of the Board’s Regulation Y (12
CFR 225.41) to acquire a bank or bank
holding company. The factors that are
considered in acting on the notices are
set forth in paragraph 7 of the Act (12
U.S.C. 1817(j)(7)).
The notices are available for
immediate inspection at the Federal
Reserve Bank indicated. The notices
also will be available for inspection at
the office of the Board of Governors.
Interested persons may express their
views in writing to the Reserve Bank
indicated for that notice or to the offices
of the Board of Governors. Comments
must be received not later than April 25,
2005.
A. Federal Reserve Bank of Kansas
City (Donna J. Ward, Assistant Vice
President) 925 Grand Avenue, Kansas
City, Missouri 64198-0001:
1. Stephen Sherlock, Lamar, Colorado,
individually and as trustee for Colorado
East Bank & Trust Employee Stock
Ownership Plan, to retain voting shares
of ColoEast Bankshares, Inc., both in
Lamar, Colorado, and thereby indirectly
retain voting shares of First National
Bank of Tribune, Tribune, Kansas, and
Colorado East Bank & Trust, Lamar,
Colorado.
Board of Governors of the Federal Reserve
System, April 5, 2005.
Robert deV. Frierson,
Deputy Secretary of the Board.
[FR Doc. 05–7134 Filed 4–8–05; 8:45 am]
BILLING CODE 6210–01–S
FEDERAL RESERVE SYSTEM
Formations of, Acquisitions by, and
Mergers of Bank Holding Companies
The companies listed in this notice
have applied to the Board for approval,
pursuant to the Bank Holding Company
Act of 1956 (12 U.S.C. 1841 et seq.)
(BHC Act), Regulation Y (12 CFR Part
225), and all other applicable statutes
and regulations to become a bank
holding company and/or to acquire the
assets or the ownership of, control of, or
the power to vote shares of a bank or
bank holding company and all of the
banks and nonbanking companies
owned by the bank holding company,
including the companies listed below.
The applications listed below, as well
as other related filings required by the
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Board, are available for immediate
inspection at the Federal Reserve Bank
indicated. The application also will be
available for inspection at the offices of
the Board of Governors. Interested
persons may express their views in
writing on the standards enumerated in
the BHC Act (12 U.S.C. 1842(c)). If the
proposal also involves the acquisition of
a nonbanking company, the review also
includes whether the acquisition of the
nonbanking company complies with the
standards in section 4 of the BHC Act
(12 U.S.C. 1843). Unless otherwise
noted, nonbanking activities will be
conducted throughout the United States.
Additional information on all bank
holding companies may be obtained
from the National Information Center
website at www.ffiec.gov/nic/.
Unless otherwise noted, comments
regarding each of these applications
must be received at the Reserve Bank
indicated or the offices of the Board of
Governors not later than May 5, 2005.
A. Federal Reserve Bank of
Philadelphia (Michael E. Collins, Senior
Vice President) 100 North 6th Street,
Philadelphia, Pennsylvania 19105-1521:
1. Citizens and Northern Corporation,
Wellsboro, Pennsylvania; to acquire 100
percent of the voting shares of Canisteo
Valley Corporation, Canisteo, New York,
and thereby indirectly acquire voting
shares of First State Bank, Canisteo,
New York.
In connection with this application,
Applicant also has applied to engage in
the sale of credit related insurance,
pursuant to section 225.28(b)(11)(i) of
Regulation Y.
B. Federal Reserve Bank of Chicago
(Patrick M. Wilder, Assistant Vice
President) 230 South LaSalle Street,
Chicago, Illinois 60690-1414:
1. Mainsource Financial Group,
Greensburg, Indiana; to acquire 100
percent of the voting shares of Madison
Bank & Trust Company, Madison,
Indiana.
Board of Governors of the Federal Reserve
System, April 5, 2005.
Robert deV. Frierson,
Deputy Secretary of the Board.
[FR Doc. 05–7133 Filed 4–8–05; 8:45 am]
BILLING CODE 6210–01–S
FEDERAL TRADE COMMISSION
18397
SUMMARY: The consent agreement in this
matter settles alleged violations of
federal law prohibiting unfair or
deceptive acts or practices or unfair
methods of competition. The attached
Analysis to Aid Public Comment
describes both the allegations in Count
III of the complaint and the terms of the
consent order—embodied in the consent
agreement—that would settle these
allegations.
DATES: Comments must be received on
or before May 2, 2005.
ADDRESSES: Interested parties are
invited to submit written comments.
Comments should refer to ‘‘Evanston
Northwestern Healthcare Corporation, et
al., Docket No. 9315,’’ to facilitate the
organization of comments. A comment
filed in paper form should include this
reference both in the text and on the
envelope, and should be mailed or
delivered to the following address:
Federal Trade Commission/Office of the
Secretary, Room 159–H, 600
Pennsylvania Avenue, NW.,
Washington, DC 20580. Comments
containing confidential material must be
filed in paper form, must be clearly
labeled ‘‘Confidential,’’ and must
comply with Commission Rule 4.9(c).
16 CFR 4.9(c) (2005).1 The FTC is
requesting that any comment filed in
paper form be sent by courier or
overnight service, if possible, because
U.S. postal mail in the Washington area
and at the Commission is subject to
delay due to heightened security
precautions. Comments that do not
contain any nonpublic information may
instead be filed in electronic form as
part of or as an attachment to email
messages directed to the following email
box: consentagreement@ftc.gov.
The FTC Act and other laws the
Commission administers permit the
collection of public comments to
consider and use in this proceeding as
appropriate. All timely and responsive
public comments, whether filed in
paper or electronic form, will be
considered by the Commission, and will
be available to the public on the FTC
website, to the extent practicable, at
www.ftc.gov. As a matter of discretion,
the FTC makes every effort to remove
home contact information for
individuals from the public comments it
receives before placing those comments
on the FTC website. More information,
[Docket No. 9315]
Evanston Northwestern Healthcare
Corporation and ENH Medical Group,
Inc.; Analysis To Aid Public Comment
Federal Trade Commission.
Proposed Consent Agreement.
AGENCY:
ACTION:
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1 The comment must be accompanied by an
explicit request for confidential treatment,
including the factual and legal basis for the request,
and must identify the specific portions of the
comment to be withheld from the public record.
The request will be granted or denied by the
Commission’s General Counsel, consistent with
applicable law and the public interest. See
Commission Rule 4.9(c) 16 CFR 4.9(c).
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18398
Federal Register / Vol. 70, No. 68 / Monday, April 11, 2005 / Notices
including routine uses permitted by the
Privacy Act, may be found in the FTC’s
privacy policy, at https://www.ftc.gov/
ftc/privacy.htm.
FOR FURTHER INFORMATION CONTACT:
Elizabeth A. Piotrowski, Bureau of
Competition, 600 Pennsylvania Avenue,
NW., Washington, DC 20580, (202) 326–
2623.
SUPPLEMENTARY INFORMATION: Pursuant
to Section 6(f) of the Federal Trade
Commission Act, 38 Stat. 721, 15 U.S.C.
46(f), and § 3.25(f) of the Commission
Rules of Practice, 16 CFR 3.25(f), notice
is hereby given that the above-captioned
consent agreement containing a consent
order to cease and desist, having been
filed with and accepted, subject to final
approval, by the Commission, has been
placed on the public record for a period
of thirty (30) days. The following
Analysis to Aid Public Comment
describes the terms of the consent
agreement, and the allegations in the
complaint. An electronic copy of the
full text of the consent agreement
package can be obtained from the FTC
Home Page (for April 5, 2005), on the
World Wide Web, at https://www.ftc.gov/
os/2005/04/index.htm. A paper copy
can be obtained from the FTC Public
Reference Room, Room 130–H, 600
Pennsylvania Avenue, NW.,
Washington, DC 20580, either in person
or by calling (202) 326–2222.
Public comments are invited, and may
be filed with the Commission in either
paper or electronic form. All comments
should be filed as prescribed in the
ADDRESSES section above, and must be
received on or before the date specified
in the DATES section.
Analysis of Agreement Containing
Consent Order To Aid Public Comment
The Federal Trade Commission has
accepted, subject to final approval, an
agreement containing a proposed
consent order with Evanston
Northwestern Healthcare Corporation
(‘‘ENH’’), ENH Medical Group, Inc.
(‘‘ENH Medical Group’’), and ENH
Faculty Practice Associates (‘‘Faculty
Practice Associates’’). On February 10,
2004, the Commission issued a threecount complaint, alleging in Count III
that ENH and ENH Medical Group
(‘‘Respondents’’) violated Section 5 of
the Federal Trade Commission Act, 15
U.S.C. 45, by negotiating price and other
competitive terms on the collective
behalf of otherwise independent,
competing physicians. The proposed
consent order, should the Commission
accept it, would settle solely the
allegations that are set forth in Count III
of the complaint. The hearing on the
remaining charges in the complaint is
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scheduled to commence before the
Administrative Law Judge on February
10, 2005.
The proposed consent order has been
placed on the public record for 30 days
to receive comments from interested
persons. Comments received during this
period will become part of the public
record. After 30 days, the Commission
will review the agreement and the
comments received, and will decide
whether it should withdraw from the
agreement or make the proposed order
final.
The purpose of this analysis is to
facilitate public comment on the
proposed order. The analysis is not
intended to constitute an official
interpretation of the agreement and
proposed order, or to modify its terms
in any way. Further, the proposed
consent order has been entered into for
settlement purposes only and does not
constitute an admission by ENH, ENH
Medical Group, or Faculty Practice
Associates that they violated the law or
that the facts alleged in the complaint
(other than jurisdictional facts) are true.
The Complaint Allegations Pertaining
to Count III
ENH, a non-profit corporation, owns
Faculty Practice Associates, which is
also a non-profit corporation. Faculty
Practice Associates employs
approximately 460 physicians (‘‘salaried
physicians’’) who practice medicine in
several offices either in Cook or Lake
Counties, Illinois, and who primarily
serve ENH’s patients. Faculty Practice
Associates is the sole shareholder of
ENH Medical Group, a for-profit
corporation. ENH Medical Group, on
behalf of physicians whom it represents,
negotiates and enters into contracts with
health plans and other third-party
payors (‘‘payors’’), pursuant to which
the physicians provide services to the
payors’’ insureds in exchange for a fee.
Among the contract terms that ENH
Medical Group negotiates is the price by
which payors compensate physicians
for their provision of services.
ENH Medical Group jointly
represented two categories of physicians
in its negotiations with payors for
contracts: The salaried physicians, and
about 450 other, independent
physicians, who also practice medicine
throughout Cook and Lake Counties
(‘‘independent physicians’’). The
salaried and independent physicians
both include within their ranks
specialists and primary care physicians.
In the absence of their collective price
fixing through ENH Medical Group,
these physicians compete in the same
geographic area for the sale of
comparable physician services.
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Competition has the effect of lowering
the costs, and improving the quality, of
physician services. ENH Medical Group
deprived payors, employers, and
individuals of the benefits of physician
competition, by orchestrating
agreements among rival physicians on
price and other competitively
significant terms, and by negotiating
with payors for contracts that contained
such fixed terms. By eliminating
physician competition, ENH Medical
Group was able to obtain increases in
the prices that payors paid to the
salaried and independent physicians.
The salaried physicians and
independent physicians have not
integrated their practices in a
meaningful manner to enhance
efficiency. In connection with the
activities described in the complaint,
the physicians have not shared financial
risk. They also have not shared
information technology systems, or
complied with common performance
standards or clinical protocols, to
enhance services. ENH Medical Group’s
contracting practices violate of Section
5 of the Federal Trade Commission Act.
The Proposed Consent Order
The proposed consent order is
designed to remedy the illegal conduct
charged in the complaint and prevent its
recurrence, while allowing Respondents
to engage in legitimate conduct that
does not impair competition. The
proposed order is similar to recent
orders that the Commission has issued
to settle charges relating to unlawful
agreements to raise physician prices.
The proposed order’s specific
provisions are as follows:
The order’s core prohibitions are
contained in Paragraphs II, III, and IV.
Paragraph II.A prohibits Respondents
from entering into or facilitating any
agreement between or among any
physicians: (1) To negotiate with payors
on any physician’s behalf; (2) to deal,
not to deal, or threaten not to deal with
payors; (3) on what terms to deal with
any payor; or (4) not to deal
individually with any payor, or to deal
with any payor only through
Respondents’ arrangements.
Other parts of Paragraph II reinforce
these general prohibitions. Paragraph
II.B prohibits the Respondents from
facilitating exchanges of information
between or among physicians
concerning whether, or on what terms,
to contract with a payor. Paragraph II.C
bans them from attempting to engage in
any action prohibited by Paragraph II.A
or II.B. Paragraph II.D prohibits
Respondents from inducing anyone to
engage in any action prohibited by
Paragraphs II.A through II.C.
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Federal Register / Vol. 70, No. 68 / Monday, April 11, 2005 / Notices
As in other orders addressing health
care providers’ collective contracting
with payors, certain kinds of agreements
are excluded from the general bar on
joint negotiations. Respondents are not
precluded from engaging in conduct
that is reasonably necessary to form or
participate in legitimate joint
contracting arrangements among
competing physicians, whether a
‘‘qualified risk-sharing joint
arrangement’’ or a ‘‘qualified clinicallyintegrated joint arrangement.’’ However,
such arrangements must not restrict the
ability, or facilitate the refusal, of the
arrangements’ physician members to
deal with payors on an individual basis
or through any other arrangement. As
discussed below in connection with
Paragraph IV, Respondents are required
to notify the Commission about such an
arrangement prior to negotiating on
behalf of the arrangement’s members, or
before those members jointly discuss
any terms of dealing with a payor.
Respondents would not be barred
from activities solely involving the
salaried physicians with respect to ENH
physician services.
As defined in the proposed order, a
‘‘qualified risk-sharing joint
arrangement’’ must satisfy two
conditions. First, all physician
participants must share substantial
financial risk through the arrangement
and thereby create incentives for the
physician participants jointly to control
costs and improve quality by managing
the provision of services. Second, any
agreements concerning reimbursement
or other terms or conditions of dealing
must be reasonably necessary to obtain
significant efficiencies through the joint
arrangement.
As defined in the proposed order, a
‘‘qualified clinically-integrated joint
arrangement’’ also must satisfy two
conditions. First, all physician
participants must participate in active
and ongoing programs to evaluate and
modify their clinical practice patterns,
creating a high degree of
interdependence and cooperation
among physicians, in order to control
costs and ensure the quality of services
provided. Second, any agreements
concerning reimbursement or other
terms or conditions of dealing must be
reasonably necessary to obtain
significant efficiencies through the joint
arrangement.
Paragraph III requires Respondents to
notify the Commission before entering
into any arrangement to act as a
messenger, or as an agent on behalf of
any physicians, with payors regarding
contracts. The paragraph also sets out
the information necessary to make the
notification complete.
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In the event that a Respondent forms
a qualified risk-sharing joint
arrangement or a qualified clinicallyintegrated joint arrangement, Paragraph
IV requires the Respondent, for five
years, to notify the Commission at least
90 days prior to initially contacting,
negotiating, or entering into agreements
with payors concerning the
arrangement. Notification is not
required for subsequent negotiations or
agreements with payors pursuant to any
arrangement for which notice was
already given under Paragraph IV, nor is
notice required for renegotiation of any
risk-sharing contract identified at
confidential Appendix 1 of the Order.
The final proviso to Paragraph IV sets
out the information necessary to make
the notification complete, and
establishes the Commission’s right to
obtain additional information regarding
the arrangement.
Paragraph V, which applies only to
ENH Medical Group, requires ENH
Medical Group to distribute the
complaint and order to: (1) All
physicians that have participated in
ENH Medical Group since January 1,
2000, and (2) payors that ENH Medical
Group has a record of having been in
contact with regarding contracting for
the provision of affiliated physician
services since January 1, 2000.
Paragraph V.B requires ENH Medical
Group, at any payor’s request and
without penalty, or within one year after
the Order is made final, to terminate its
current contracts with respect to
providing physician services. However,
ENH Medical Group is not required by
Paragraph V.B to terminate its risksharing contracts identified in
confidential Appendix 1 of the order.
Paragraph V.C requires ENH Medical
Group to distribute payor requests for
contract termination to all physicians
who participate in ENH Medical Group.
The remaining provisions of
Paragraph V, and Paragraphs VI through
X, of the proposed order impose
obligations on ENH Medical Group and
ENH to report or provide access to
information to the Commission to
facilitate monitoring Respondents’
compliance with the order.
The proposed order will expire in 20
years.
By direction of the Commission, Chairman
Majoras not participating.
Donald S. Clark,
Secretary.
[FR Doc. 05–7244 Filed 4–8–05; 8:45 am]
BILLING CODE 6750–01–U
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18399
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Meeting of the Advisory Committee on
Minority Health
Department of Health and
Human Services, Office of the Secretary.
ACTION: Notice.
AGENCY:
SUMMARY: As stipulated by the Federal
Advisory Committee Act, the
Department of Health and Human
Services (DHHS) is hereby giving notice
that the Advisory Committee on
Minority Health (ACMH) will hold a
meeting. This meeting is open to the
public.
The meeting will be held on
April 25, 2005 from 1 p.m. to 5 p.m. and
on April 26, 2005 from 9 a.m. to 5 p.m.
ADDRESSES: The meeting will be held at
the Marriott Bethesda North Hotel and
Conference Center, 5701 Marinelli Road,
North Bethesda, Maryland 20852. This
location is metro accessible to the White
Flint Station.
FOR FURTHER INFORMATION CONTACT: Ms.
Monica A. Farrar, Tower Building, 1001
Wootton Parkway, Rockville, Maryland
20852. Phone: 301–443–5084. Fax: 301–
594–0767.
SUPPLEMENTARY INFORMATION: In
accordance with Pub. L. 105–392, the
Advisory Committee on Minority Health
was established to provide advice to the
Secretary DHHS, through the Deputy
Assistant Secretary for Minority Health,
on issues related to the health of racial
and ethnic minority populations.
Topics to be discussed during this
meeting will include programs and
activities related to the Office of
Minority Health and presentations on
the status of racial and ethnic health
disparities as well as other related
issues. A tentative agenda will be made
available one week prior to meeting for
review at https://www.omhrc.gov/acmh.
Public attendance at the meeting is
limited to space available. Individuals
who plan to attend and need special
assistance, such as sign language
interpretation or other reasonable
accommodations, should notify the
designated contact person. Members of
the public will have the opportunity to
provide comments at the meeting.
Public comments will be limited to five
minutes per speaker. Individuals who
would like to submit written statements
should mail or fax their comments to
the Office of Minority Health at least
two business days prior to the meeting.
Any members of the public who wish to
have printed material distributed to
ACMH committee members should
submit their materials to the Executive
DATES:
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]]>Agencies
[Federal Register Volume 70, Number 68 (Monday, April 11, 2005)]
[Notices]
[Pages 18397-18399]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-7244]
=======================================================================
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FEDERAL TRADE COMMISSION
[Docket No. 9315]
Evanston Northwestern Healthcare Corporation and ENH Medical
Group, Inc.; Analysis To Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed Consent Agreement.
-----------------------------------------------------------------------
SUMMARY: The consent agreement in this matter settles alleged
violations of federal law prohibiting unfair or deceptive acts or
practices or unfair methods of competition. The attached Analysis to
Aid Public Comment describes both the allegations in Count III of the
complaint and the terms of the consent order--embodied in the consent
agreement--that would settle these allegations.
DATES: Comments must be received on or before May 2, 2005.
ADDRESSES: Interested parties are invited to submit written comments.
Comments should refer to ``Evanston Northwestern Healthcare
Corporation, et al., Docket No. 9315,'' to facilitate the organization
of comments. A comment filed in paper form should include this
reference both in the text and on the envelope, and should be mailed or
delivered to the following address: Federal Trade Commission/Office of
the Secretary, Room 159-H, 600 Pennsylvania Avenue, NW., Washington, DC
20580. Comments containing confidential material must be filed in paper
form, must be clearly labeled ``Confidential,'' and must comply with
Commission Rule 4.9(c). 16 CFR 4.9(c) (2005).\1\ The FTC is requesting
that any comment filed in paper form be sent by courier or overnight
service, if possible, because U.S. postal mail in the Washington area
and at the Commission is subject to delay due to heightened security
precautions. Comments that do not contain any nonpublic information may
instead be filed in electronic form as part of or as an attachment to
email messages directed to the following email box:
consentagreement@ftc.gov.
---------------------------------------------------------------------------
\1\ The comment must be accompanied by an explicit request for
confidential treatment, including the factual and legal basis for
the request, and must identify the specific portions of the comment
to be withheld from the public record. The request will be granted
or denied by the Commission's General Counsel, consistent with
applicable law and the public interest. See Commission Rule 4.9(c)
16 CFR 4.9(c).
---------------------------------------------------------------------------
The FTC Act and other laws the Commission administers permit the
collection of public comments to consider and use in this proceeding as
appropriate. All timely and responsive public comments, whether filed
in paper or electronic form, will be considered by the Commission, and
will be available to the public on the FTC website, to the extent
practicable, at www.ftc.gov. As a matter of discretion, the FTC makes
every effort to remove home contact information for individuals from
the public comments it receives before placing those comments on the
FTC website. More information,
[[Page 18398]]
including routine uses permitted by the Privacy Act, may be found in
---------------------------------------------------------------------------
the FTC's privacy policy, at https://www.ftc.gov/ftc/privacy.htm.
FOR FURTHER INFORMATION CONTACT: Elizabeth A. Piotrowski, Bureau of
Competition, 600 Pennsylvania Avenue, NW., Washington, DC 20580, (202)
326-2623.
SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and Sec. 3.25(f)
of the Commission Rules of Practice, 16 CFR 3.25(f), notice is hereby
given that the above-captioned consent agreement containing a consent
order to cease and desist, having been filed with and accepted, subject
to final approval, by the Commission, has been placed on the public
record for a period of thirty (30) days. The following Analysis to Aid
Public Comment describes the terms of the consent agreement, and the
allegations in the complaint. An electronic copy of the full text of
the consent agreement package can be obtained from the FTC Home Page
(for April 5, 2005), on the World Wide Web, at https://www.ftc.gov/os/
2005/04/index.htm. A paper copy can be obtained from the FTC Public
Reference Room, Room 130-H, 600 Pennsylvania Avenue, NW., Washington,
DC 20580, either in person or by calling (202) 326-2222.
Public comments are invited, and may be filed with the Commission
in either paper or electronic form. All comments should be filed as
prescribed in the ADDRESSES section above, and must be received on or
before the date specified in the DATES section.
Analysis of Agreement Containing Consent Order To Aid Public Comment
The Federal Trade Commission has accepted, subject to final
approval, an agreement containing a proposed consent order with
Evanston Northwestern Healthcare Corporation (``ENH''), ENH Medical
Group, Inc. (``ENH Medical Group''), and ENH Faculty Practice
Associates (``Faculty Practice Associates''). On February 10, 2004, the
Commission issued a three-count complaint, alleging in Count III that
ENH and ENH Medical Group (``Respondents'') violated Section 5 of the
Federal Trade Commission Act, 15 U.S.C. 45, by negotiating price and
other competitive terms on the collective behalf of otherwise
independent, competing physicians. The proposed consent order, should
the Commission accept it, would settle solely the allegations that are
set forth in Count III of the complaint. The hearing on the remaining
charges in the complaint is scheduled to commence before the
Administrative Law Judge on February 10, 2005.
The proposed consent order has been placed on the public record for
30 days to receive comments from interested persons. Comments received
during this period will become part of the public record. After 30
days, the Commission will review the agreement and the comments
received, and will decide whether it should withdraw from the agreement
or make the proposed order final.
The purpose of this analysis is to facilitate public comment on the
proposed order. The analysis is not intended to constitute an official
interpretation of the agreement and proposed order, or to modify its
terms in any way. Further, the proposed consent order has been entered
into for settlement purposes only and does not constitute an admission
by ENH, ENH Medical Group, or Faculty Practice Associates that they
violated the law or that the facts alleged in the complaint (other than
jurisdictional facts) are true.
The Complaint Allegations Pertaining to Count III
ENH, a non-profit corporation, owns Faculty Practice Associates,
which is also a non-profit corporation. Faculty Practice Associates
employs approximately 460 physicians (``salaried physicians'') who
practice medicine in several offices either in Cook or Lake Counties,
Illinois, and who primarily serve ENH's patients. Faculty Practice
Associates is the sole shareholder of ENH Medical Group, a for-profit
corporation. ENH Medical Group, on behalf of physicians whom it
represents, negotiates and enters into contracts with health plans and
other third-party payors (``payors''), pursuant to which the physicians
provide services to the payors'' insureds in exchange for a fee. Among
the contract terms that ENH Medical Group negotiates is the price by
which payors compensate physicians for their provision of services.
ENH Medical Group jointly represented two categories of physicians
in its negotiations with payors for contracts: The salaried physicians,
and about 450 other, independent physicians, who also practice medicine
throughout Cook and Lake Counties (``independent physicians''). The
salaried and independent physicians both include within their ranks
specialists and primary care physicians. In the absence of their
collective price fixing through ENH Medical Group, these physicians
compete in the same geographic area for the sale of comparable
physician services.
Competition has the effect of lowering the costs, and improving the
quality, of physician services. ENH Medical Group deprived payors,
employers, and individuals of the benefits of physician competition, by
orchestrating agreements among rival physicians on price and other
competitively significant terms, and by negotiating with payors for
contracts that contained such fixed terms. By eliminating physician
competition, ENH Medical Group was able to obtain increases in the
prices that payors paid to the salaried and independent physicians.
The salaried physicians and independent physicians have not
integrated their practices in a meaningful manner to enhance
efficiency. In connection with the activities described in the
complaint, the physicians have not shared financial risk. They also
have not shared information technology systems, or complied with common
performance standards or clinical protocols, to enhance services. ENH
Medical Group's contracting practices violate of Section 5 of the
Federal Trade Commission Act.
The Proposed Consent Order
The proposed consent order is designed to remedy the illegal
conduct charged in the complaint and prevent its recurrence, while
allowing Respondents to engage in legitimate conduct that does not
impair competition. The proposed order is similar to recent orders that
the Commission has issued to settle charges relating to unlawful
agreements to raise physician prices.
The proposed order's specific provisions are as follows:
The order's core prohibitions are contained in Paragraphs II, III,
and IV. Paragraph II.A prohibits Respondents from entering into or
facilitating any agreement between or among any physicians: (1) To
negotiate with payors on any physician's behalf; (2) to deal, not to
deal, or threaten not to deal with payors; (3) on what terms to deal
with any payor; or (4) not to deal individually with any payor, or to
deal with any payor only through Respondents' arrangements.
Other parts of Paragraph II reinforce these general prohibitions.
Paragraph II.B prohibits the Respondents from facilitating exchanges of
information between or among physicians concerning whether, or on what
terms, to contract with a payor. Paragraph II.C bans them from
attempting to engage in any action prohibited by Paragraph II.A or
II.B. Paragraph II.D prohibits Respondents from inducing anyone to
engage in any action prohibited by Paragraphs II.A through II.C.
[[Page 18399]]
As in other orders addressing health care providers' collective
contracting with payors, certain kinds of agreements are excluded from
the general bar on joint negotiations. Respondents are not precluded
from engaging in conduct that is reasonably necessary to form or
participate in legitimate joint contracting arrangements among
competing physicians, whether a ``qualified risk-sharing joint
arrangement'' or a ``qualified clinically-integrated joint
arrangement.'' However, such arrangements must not restrict the
ability, or facilitate the refusal, of the arrangements' physician
members to deal with payors on an individual basis or through any other
arrangement. As discussed below in connection with Paragraph IV,
Respondents are required to notify the Commission about such an
arrangement prior to negotiating on behalf of the arrangement's
members, or before those members jointly discuss any terms of dealing
with a payor.
Respondents would not be barred from activities solely involving
the salaried physicians with respect to ENH physician services.
As defined in the proposed order, a ``qualified risk-sharing joint
arrangement'' must satisfy two conditions. First, all physician
participants must share substantial financial risk through the
arrangement and thereby create incentives for the physician
participants jointly to control costs and improve quality by managing
the provision of services. Second, any agreements concerning
reimbursement or other terms or conditions of dealing must be
reasonably necessary to obtain significant efficiencies through the
joint arrangement.
As defined in the proposed order, a ``qualified clinically-
integrated joint arrangement'' also must satisfy two conditions. First,
all physician participants must participate in active and ongoing
programs to evaluate and modify their clinical practice patterns,
creating a high degree of interdependence and cooperation among
physicians, in order to control costs and ensure the quality of
services provided. Second, any agreements concerning reimbursement or
other terms or conditions of dealing must be reasonably necessary to
obtain significant efficiencies through the joint arrangement.
Paragraph III requires Respondents to notify the Commission before
entering into any arrangement to act as a messenger, or as an agent on
behalf of any physicians, with payors regarding contracts. The
paragraph also sets out the information necessary to make the
notification complete.
In the event that a Respondent forms a qualified risk-sharing joint
arrangement or a qualified clinically-integrated joint arrangement,
Paragraph IV requires the Respondent, for five years, to notify the
Commission at least 90 days prior to initially contacting, negotiating,
or entering into agreements with payors concerning the arrangement.
Notification is not required for subsequent negotiations or agreements
with payors pursuant to any arrangement for which notice was already
given under Paragraph IV, nor is notice required for renegotiation of
any risk-sharing contract identified at confidential Appendix 1 of the
Order. The final proviso to Paragraph IV sets out the information
necessary to make the notification complete, and establishes the
Commission's right to obtain additional information regarding the
arrangement.
Paragraph V, which applies only to ENH Medical Group, requires ENH
Medical Group to distribute the complaint and order to: (1) All
physicians that have participated in ENH Medical Group since January 1,
2000, and (2) payors that ENH Medical Group has a record of having been
in contact with regarding contracting for the provision of affiliated
physician services since January 1, 2000. Paragraph V.B requires ENH
Medical Group, at any payor's request and without penalty, or within
one year after the Order is made final, to terminate its current
contracts with respect to providing physician services. However, ENH
Medical Group is not required by Paragraph V.B to terminate its risk-
sharing contracts identified in confidential Appendix 1 of the order.
Paragraph V.C requires ENH Medical Group to distribute payor requests
for contract termination to all physicians who participate in ENH
Medical Group.
The remaining provisions of Paragraph V, and Paragraphs VI through
X, of the proposed order impose obligations on ENH Medical Group and
ENH to report or provide access to information to the Commission to
facilitate monitoring Respondents' compliance with the order.
The proposed order will expire in 20 years.
By direction of the Commission, Chairman Majoras not
participating.
Donald S. Clark,
Secretary.
[FR Doc. 05-7244 Filed 4-8-05; 8:45 am]
BILLING CODE 6750-01-U
