Health Care Alliance of Laredo, L.C.; Analysis of Proposed Consent Order to Aid Public Comment, 9823-9825 [E6-2721]

Download as PDF Federal Register / Vol. 71, No. 38 / Monday, February 27, 2006 / Notices Dated: February 21, 2006. Roland E. Smith, Secretary, Farm Credit Administration Board. [FR Doc. 06–1840 Filed 2–23–06; 11:33 am] BILLING CODE 6705–01–P 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 March 14, 2006. A. Federal Reserve Bank of Chicago (Patrick M. Wilder, Assistant Vice President) 230 South LaSalle Street, Chicago, Illinois 60690-1414: 1. Matthew J. and Gayle M. Ahlers, and the Matthew J. Ahlers Family, (consisting of Matthew, Gayle, Michael, Carolyn, Emily, Jeffery, and Matthew Jr. Ahlers), all of Le Mars, Iowa, to acquire additional voting shares of Primebank, Inc., Le Mars, Iowa, and thereby indirectly acquire voting shares of Primebank, Le Mars, Iowa. Board of Governors of the Federal Reserve System, February 22, 2006. Robert deV. Frierson, Deputy Secretary of the Board. [FR Doc. E6–2712 Filed 2–24–06; 8:45 am] BILLING CODE 6210–01–S FEDERAL RESERVE SYSTEM hsrobinson on PROD1PC70 with NOTICES 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 VerDate Aug<31>2005 14:15 Feb 24, 2006 Jkt 208001 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 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 March 24, 2006. A. Federal Reserve Bank of St. Louis (Glenda Wilson, Community Affairs Officer) 411 Locust Street, St. Louis, Missouri 63166-2034: 1. First M&F Corporation, Kosciusko, Mississippi; to merge with Crockett County Bancshares, Inc., Bells, Tennessee, and thereby indirectly acquire Bells Banking Company, Bells, Tennessee. B. Federal Reserve Bank of Kansas City (Donna J. Ward, Assistant Vice President) 925 Grand Avenue, Kansas City, Missouri 64198-0001: 1. Sundance State Bank Profit Sharing and Employee Stock Ownership Plan and Trust, Sundance, Wyoming; to acquire an additional .67 percent, for a total of 26.73 percent, of the voting shares of Sundance Bankshares, Inc., and thereby indirectly acquire additional voting shares of Sundance State Bank, all located in Sundance, Wyoming. Board of Governors of the Federal Reserve System, February 22, 2006. Robert deV. Frierson, Deputy Secretary of the Board. [FR Doc. E6–2713 Filed 2–24–06; 8:45 am] BILLING CODE 6210–01–S PO 00000 Frm 00052 Fmt 4703 Sfmt 4703 9823 FEDERAL TRADE COMMISSION [File No. 041 0097] Health Care Alliance of Laredo, L.C.; Analysis of Proposed Consent Order to Aid Public Comment Federal Trade Commission. Proposed consent agreement. AGENCY: ACTION: 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 the draft 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 March 15, 2006. ADDRESSES: Interested parties are invited to submit written comments. Comments should refer to ‘‘Health Care Alliance of Laredo, File No. 041 0097,’’ 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 135–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 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). E:\FR\FM\27FEN1.SGM 27FEN1 9824 Federal Register / Vol. 71, No. 38 / Monday, February 27, 2006 / Notices considered by the Commission, and will be available to the public on the FTC Web site, to the extent practicable, at https://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 Web site. More information, 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: John DeGeeter, Bureau of Competition, 600 Pennsylvania Avenue, NW., Washington, DC 20580, (202) 326–2783. SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and § 2.34 of the Commission Rules of Practice, 16 CFR 2.34, 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 February 13, 2006), on the World Wide Web, at https:// www.ftc.gov/os/2006/02/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. hsrobinson on PROD1PC70 with NOTICES 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 Health Care Alliance of Laredo, L.C. (‘‘HAL’’). The agreement settles charges that HAL violated section 5 of the Federal Trade Commission Act, 15 U.S.C. 45, by orchestrating and implementing agreements among physician members of HAL to fix prices and other terms on which they would deal with health plans, and to refuse to deal with such purchasers except on collectively-determined terms. The proposed consent order has been placed VerDate Aug<31>2005 14:15 Feb 24, 2006 Jkt 208001 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 their terms in any way. Further, the proposed consent order has been entered into for settlement purposes only and does not constitute an admission by HAL that it violated the law or that the facts alleged in the complaint (other than jurisdictional facts) are true. The Complaint The allegations of the complaint are summarized below. HAL is a multi-specialty independent practice association (‘‘IPA’’) in the Laredo, Texas, area with approximately 80 member physicians, a substantial majority of whom are competitors of one another. HAL contracts with payors on behalf of its member physicians and thereby establishes uniform prices and other contract terms applicable to its members. Although purporting to employ a ‘‘messenger model,’’ 2 from 1998 to 2005, HAL attempted to and did negotiate higher reimbursement rates for its member physicians, sent payor offers to its members only after HAL negotiated and approved the rates, and urged its members not to deal individually with payors. HAL’s Board of Managers, nine physicians who are elected by and represent HAL’s physician members, authorized and directed each step of the contracting process. The Board initiated negotiations by directing HAL personnel to contact a payor. On several occasions, HAL personnel contacted payors after learning that the payors were soliciting contracts with individual physicians. HAL personnel told the payors that HAL would represent and contract on behalf of HAL’s physician members. As negotiations between payors and HAL 2 Some arrangements can facilitate contracting between health care providers and payors without fostering an illegal agreement among competing physicians on fees or fee-related terms. One such approach, sometimes referred to as a ‘‘messenger model’’ arrangement, is described in the 1996 Statements of Antitrust Enforcement Policy in Health Care jointly issued by the Federal Trade Commission and U.S. Department of Justice, at 125. See https://www.ftc.gov/reports/hlth3s.htm#9. PO 00000 Frm 00053 Fmt 4703 Sfmt 4703 personnel proceeded, HAL personnel were required to report to the Board on the progress of negotiations, and to seek authorization from the Board before making counterproposals. Ultimately, the Board either accepted or rejected contracts which HAL personnel presented to it. If the Board accepted the contract, HAL would then, and only then, ‘‘messenger’’ the contract to HAL’s members for their individual acceptance or rejection. HAL did not messenger any rates proposed by the payors during negotiations, and messengered only the rates that the Board approved. HAL members were fully aware of the payor negotiations HAL conducted on their behalf. HAL’s staff provided updates to members on the status of contract negotiations via telephone, monthly newsletters, and monthly meetings. On several occasions, as HAL personnel were attempting to negotiate a group contract, HAL urged its members not to negotiate individually with the health plans, and significant numbers of HAL members refused to deal individually with those payors. HAL members also had direct input in payor negotiations, aside from their representation on the Board. In 1999, HAL surveyed its members, asking them for ‘‘the 20 most common codes used in the office and the maximum discount that you are willing to accept.’’ HAL’s Executive Director explained that ‘‘[t]his will help me when I negotiate contracts on behalf of the organization, since I would present these codes as those for which I will seek the advantageous rates.’’ In addition to the 1999 survey, HAL personnel and Board members regularly solicited input on acceptable rates from HAL’s members, which were then used in negotiations with payors. HAL has orchestrated collective agreements on fees and other terms of dealing with health plans, carried out collective negotiations with health plans, and fostered refusals to deal. HAL succeeded in forcing numerous health plans to raise the fees paid to HAL physician members, and thereby raised the cost of medical care in the Laredo, Texas, area. HAL engaged in no efficiency-enhancing integration sufficient to justify joint negotiation of fees. By the acts set forth in the Complaint, HAL violated Section 5 of the FTC Act. The Proposed Consent Order The proposed order is designed to remedy the illegal conduct charged in the complaint and prevent its recurrence. It is similar to recent consent orders that the Commission has issued to settle charges that physician groups engaged in unlawful agreements E:\FR\FM\27FEN1.SGM 27FEN1 hsrobinson on PROD1PC70 with NOTICES Federal Register / Vol. 71, No. 38 / Monday, February 27, 2006 / Notices to raise fees they receive from health plans. The proposed order’s specific provisions are as follows: Paragraph II.A prohibits HAL 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 an arrangement involving HAL. Other parts of Paragraph II reinforce these general prohibitions. Paragraph II.B prohibits HAL from facilitating exchanges of information between physicians concerning whether, or on what terms, to contract with a payor. Paragraph II.C bars attempts to engage in any action prohibited by Paragraph II.A or II.B, and Paragraph II.D proscribes HAL from inducing anyone to engage in any action prohibited by Paragraphs II.A through II.C. As in other Commission orders addressing providers’ collective bargaining with health care purchasers, certain kinds of agreements are excluded from the general bar on joint negotiations. HAL would not be precluded from engaging in conduct that is reasonably necessary to form or participate in legitimate joint contracting arrangements among competing physicians in a ‘‘qualified risk-sharing joint arrangement’’ or a ‘‘qualified clinically-integrated joint arrangement.’’ The arrangement, however, must not facilitate the refusal of, or restrict, physicians in contracting with payors outside of the arrangement. As defined in the proposed order, a ‘‘qualified risk-sharing joint arrangement’’ possesses two key characteristics. First, all physician participants must share substantial financial risk through the arrangement, such that the arrangement creates incentives for the physician participants jointly to control costs and improve quality by managing the provision of services. Second, any agreement concerning reimbursement or other terms or conditions of dealing must be reasonably necessary to obtain significant efficiencies through the joint arrangement. A ‘‘qualified clinically-integrated joint arrangement,’’ on the other hand, need not involve any sharing of financial risk. Instead, as defined in the proposed order, physician participants must participate in active and ongoing programs to evaluate and modify their clinical practice patterns in order to control costs and ensure the quality of VerDate Aug<31>2005 14:15 Feb 24, 2006 Jkt 208001 services provided, and the arrangement must create a high degree of interdependence and cooperation among physicians. As with qualified risk-sharing arrangements, any agreement concerning price or other terms of dealing must be reasonably necessary to achieve the efficiency goals of the joint arrangement. Paragraph III, for three years, requires HAL 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. Paragraph III also sets out the information necessary to make the notification complete. Paragraph IV, for three years, requires HAL to notify the Commission before participating in contracting with health plans on behalf of a qualified risksharing joint arrangement, or a qualified clinically-integrated joint arrangement. The contracting discussions that trigger the notice provision may be either among physicians, or between HAL and health plans. Paragraph IV also sets out the information necessary to satisfy the notification requirement. Paragraph V requires HAL to distribute the complaint and order to all physicians who have participated in HAL, and to payors that negotiated contracts with HAL or indicated an interest in contracting with HAL. Paragraph V.D requires HAL, at any payor’s request and without penalty, or, at the latest, within one year after the order is made final, to terminate its current contracts with respect to providing physician services. Paragraph V.D also allows any contract currently in effect to be extended, upon mutual consent of HAL and the contracted payor, to any date no later than one year from when the order became final. This extension allows both parties to negotiate a termination date that would equitably enable them to prepare for the impending contract termination. Paragraph V.E requires HAL to distribute payor requests for contract termination to all physicians who participate in HAL. Paragraphs VI, VII, and VIII of the proposed order impose various obligations on HAL to report or provide access to information to the Commission to facilitate monitoring HAL’s compliance with the order. The proposed order will expire in 20 years. The purpose of this analysis is to facilitate public comment on the proposed order. It is not intended to constitute an official interpretation of the proposed order to modify its terms in any way. PO 00000 Frm 00054 Fmt 4703 Sfmt 4703 9825 By direction of the Commission. Donald S. Clark, Secretary. [FR Doc. E6–2721 Filed 2–24–06; 8:45 am] BILLING CODE 6750–01–P GENERAL SERVICES ADMINISTRATION Notice of Intent to Prepare an Environmental Impact Statement for the Calexico West Port of Entry Expansion/Renovation, Calexico, California Public Buildings Service, GSA Notice of Intent to Prepare an Environmental Impact Statement (EIS) and Public Scoping Meeting AGENCY: ACTION: SUMMARY: The General Services Administration (GSA) announces its intent to prepare an Environmental Impact Statement (EIS) for the expansion/renovation of the Calexico West Port of Entry (POE), located in Calexico, California. The purpose of the expansion/renovation is to reduce traffic congestion in Calexico and Mexicali city centers caused by vehicles crossing the border, to improve border security; and to provide safe, secure, and efficient operational areas for the public and Federal employees. This facility serves both vehicular and pedestrian traffic into and out of the Mexican city of Mexicali. The need for this expansion/ renovation derives from the substantial increase in its use by international travelers. The existing POE is not equipped to process this increase within an acceptable level of service consistent with the Federal Inspection Service’s minimum standards. Problems at the current facility are mostly related to inadequate space for inspection operations, equipment, and personnel. The facility also requires seismic retrofitting. The EIS will address potential environmental impacts of the alternatives for the proposed project related to geology and soils, water resources, land use, biological resources, cultural resources, visual resources, infrastructure, traffic, air quality, noise, human health and safety, socioeconomics, and environmental justice. The existing contamination of the New River and traffic congestion have been identified as potential environmental impacts. Information regarding other potential environmental impacts will be gathered during the public scoping process. DATES: The views and comments of the public are necessary in determining the E:\FR\FM\27FEN1.SGM 27FEN1

Agencies

[Federal Register Volume 71, Number 38 (Monday, February 27, 2006)]
[Notices]
[Pages 9823-9825]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-2721]


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FEDERAL TRADE COMMISSION

[File No. 041 0097]


Health Care Alliance of Laredo, L.C.; Analysis of Proposed 
Consent Order 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 the draft 
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 March 15, 2006.

ADDRESSES: Interested parties are invited to submit written comments. 
Comments should refer to ``Health Care Alliance of Laredo, File No. 041 
0097,'' 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 135-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 e-mail 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

[[Page 9824]]

considered by the Commission, and will be available to the public on 
the FTC Web site, to the extent practicable, at https://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 Web site. More 
information, 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: John DeGeeter, Bureau of Competition, 
600 Pennsylvania Avenue, NW., Washington, DC 20580, (202) 326-2783.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and Sec.  2.34 of 
the Commission Rules of Practice, 16 CFR 2.34, 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 February 13, 2006), on the World Wide Web, at https://www.ftc.gov/
os/2006/02/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 Health 
Care Alliance of Laredo, L.C. (``HAL''). The agreement settles charges 
that HAL violated section 5 of the Federal Trade Commission Act, 15 
U.S.C. 45, by orchestrating and implementing agreements among physician 
members of HAL to fix prices and other terms on which they would deal 
with health plans, and to refuse to deal with such purchasers except on 
collectively-determined terms. 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 their 
terms in any way. Further, the proposed consent order has been entered 
into for settlement purposes only and does not constitute an admission 
by HAL that it violated the law or that the facts alleged in the 
complaint (other than jurisdictional facts) are true.

The Complaint

    The allegations of the complaint are summarized below.
    HAL is a multi-specialty independent practice association (``IPA'') 
in the Laredo, Texas, area with approximately 80 member physicians, a 
substantial majority of whom are competitors of one another. HAL 
contracts with payors on behalf of its member physicians and thereby 
establishes uniform prices and other contract terms applicable to its 
members.
    Although purporting to employ a ``messenger model,'' \2\ from 1998 
to 2005, HAL attempted to and did negotiate higher reimbursement rates 
for its member physicians, sent payor offers to its members only after 
HAL negotiated and approved the rates, and urged its members not to 
deal individually with payors.
    HAL's Board of Managers, nine physicians who are elected by and 
represent HAL's physician members, authorized and directed each step of 
the contracting process. The Board initiated negotiations by directing 
HAL personnel to contact a payor. On several occasions, HAL personnel 
contacted payors after learning that the payors were soliciting 
contracts with individual physicians. HAL personnel told the payors 
that HAL would represent and contract on behalf of HAL's physician 
members. As negotiations between payors and HAL personnel proceeded, 
HAL personnel were required to report to the Board on the progress of 
negotiations, and to seek authorization from the Board before making 
counterproposals. Ultimately, the Board either accepted or rejected 
contracts which HAL personnel presented to it. If the Board accepted 
the contract, HAL would then, and only then, ``messenger'' the contract 
to HAL's members for their individual acceptance or rejection. HAL did 
not messenger any rates proposed by the payors during negotiations, and 
messengered only the rates that the Board approved.
    HAL members were fully aware of the payor negotiations HAL 
conducted on their behalf. HAL's staff provided updates to members on 
the status of contract negotiations via telephone, monthly newsletters, 
and monthly meetings. On several occasions, as HAL personnel were 
attempting to negotiate a group contract, HAL urged its members not to 
negotiate individually with the health plans, and significant numbers 
of HAL members refused to deal individually with those payors.
---------------------------------------------------------------------------

    \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).
    \2\ Some arrangements can facilitate contracting between health 
care providers and payors without fostering an illegal agreement 
among competing physicians on fees or fee-related terms. One such 
approach, sometimes referred to as a ``messenger model'' 
arrangement, is described in the 1996 Statements of Antitrust 
Enforcement Policy in Health Care jointly issued by the Federal 
Trade Commission and U.S. Department of Justice, at 125. See https://
www.ftc.gov/reports/hlth3s.htm#9.
---------------------------------------------------------------------------

    HAL members also had direct input in payor negotiations, aside from 
their representation on the Board. In 1999, HAL surveyed its members, 
asking them for ``the 20 most common codes used in the office and the 
maximum discount that you are willing to accept.'' HAL's Executive 
Director explained that ``[t]his will help me when I negotiate 
contracts on behalf of the organization, since I would present these 
codes as those for which I will seek the advantageous rates.'' In 
addition to the 1999 survey, HAL personnel and Board members regularly 
solicited input on acceptable rates from HAL's members, which were then 
used in negotiations with payors.
    HAL has orchestrated collective agreements on fees and other terms 
of dealing with health plans, carried out collective negotiations with 
health plans, and fostered refusals to deal. HAL succeeded in forcing 
numerous health plans to raise the fees paid to HAL physician members, 
and thereby raised the cost of medical care in the Laredo, Texas, area. 
HAL engaged in no efficiency-enhancing integration sufficient to 
justify joint negotiation of fees. By the acts set forth in the 
Complaint, HAL violated Section 5 of the FTC Act.

The Proposed Consent Order

    The proposed order is designed to remedy the illegal conduct 
charged in the complaint and prevent its recurrence. It is similar to 
recent consent orders that the Commission has issued to settle charges 
that physician groups engaged in unlawful agreements

[[Page 9825]]

to raise fees they receive from health plans.
    The proposed order's specific provisions are as follows:
    Paragraph II.A prohibits HAL 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 an arrangement involving HAL.
    Other parts of Paragraph II reinforce these general prohibitions. 
Paragraph II.B prohibits HAL from facilitating exchanges of information 
between physicians concerning whether, or on what terms, to contract 
with a payor. Paragraph II.C bars attempts to engage in any action 
prohibited by Paragraph II.A or II.B, and Paragraph II.D proscribes HAL 
from inducing anyone to engage in any action prohibited by Paragraphs 
II.A through II.C.
    As in other Commission orders addressing providers' collective 
bargaining with health care purchasers, certain kinds of agreements are 
excluded from the general bar on joint negotiations. HAL would not be 
precluded from engaging in conduct that is reasonably necessary to form 
or participate in legitimate joint contracting arrangements among 
competing physicians in a ``qualified risk-sharing joint arrangement'' 
or a ``qualified clinically-integrated joint arrangement.'' The 
arrangement, however, must not facilitate the refusal of, or restrict, 
physicians in contracting with payors outside of the arrangement.
    As defined in the proposed order, a ``qualified risk-sharing joint 
arrangement'' possesses two key characteristics. First, all physician 
participants must share substantial financial risk through the 
arrangement, such that the arrangement creates incentives for the 
physician participants jointly to control costs and improve quality by 
managing the provision of services. Second, any agreement concerning 
reimbursement or other terms or conditions of dealing must be 
reasonably necessary to obtain significant efficiencies through the 
joint arrangement.
    A ``qualified clinically-integrated joint arrangement,'' on the 
other hand, need not involve any sharing of financial risk. Instead, as 
defined in the proposed order, physician participants must participate 
in active and ongoing programs to evaluate and modify their clinical 
practice patterns in order to control costs and ensure the quality of 
services provided, and the arrangement must create a high degree of 
interdependence and cooperation among physicians. As with qualified 
risk-sharing arrangements, any agreement concerning price or other 
terms of dealing must be reasonably necessary to achieve the efficiency 
goals of the joint arrangement.
    Paragraph III, for three years, requires HAL 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. Paragraph III also sets out the information necessary to 
make the notification complete.
    Paragraph IV, for three years, requires HAL to notify the 
Commission before participating in contracting with health plans on 
behalf of a qualified risk-sharing joint arrangement, or a qualified 
clinically-integrated joint arrangement. The contracting discussions 
that trigger the notice provision may be either among physicians, or 
between HAL and health plans. Paragraph IV also sets out the 
information necessary to satisfy the notification requirement.
    Paragraph V requires HAL to distribute the complaint and order to 
all physicians who have participated in HAL, and to payors that 
negotiated contracts with HAL or indicated an interest in contracting 
with HAL. Paragraph V.D requires HAL, at any payor's request and 
without penalty, or, at the latest, within one year after the order is 
made final, to terminate its current contracts with respect to 
providing physician services. Paragraph V.D also allows any contract 
currently in effect to be extended, upon mutual consent of HAL and the 
contracted payor, to any date no later than one year from when the 
order became final. This extension allows both parties to negotiate a 
termination date that would equitably enable them to prepare for the 
impending contract termination. Paragraph V.E requires HAL to 
distribute payor requests for contract termination to all physicians 
who participate in HAL.
    Paragraphs VI, VII, and VIII of the proposed order impose various 
obligations on HAL to report or provide access to information to the 
Commission to facilitate monitoring HAL's compliance with the order.
    The proposed order will expire in 20 years.
    The purpose of this analysis is to facilitate public comment on the 
proposed order. It is not intended to constitute an official 
interpretation of the proposed order to modify its terms in any way.
By direction of the Commission.

Donald S. Clark,
Secretary.
[FR Doc. E6-2721 Filed 2-24-06; 8:45 am]
BILLING CODE 6750-01-P