United States of America v. Federation of Physicians and Dentists, et al.; Proposed Final Judgment and Competitive Impact Statement, 39450-39462 [07-3421]

Agencies

• Antitrust Division
• Department of Justice

[Federal Register Volume 72, Number 137 (Wednesday, July 18, 2007)]
[Notices]
[Pages 39450-39462]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 07-3421]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States of America v. Federation of Physicians and 
Dentists, et al.; Proposed Final Judgment and Competitive Impact 
Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(b) through (h), that a proposed Final 
Judgment and Competitive Impact Statement have been filed in a civil 
antitrust case, United States of America v. Federation of Physicians 
and Dentists, et al., Case No. 1:05-cv-431, in the United States 
District Court for the Southern District of Ohio.
    On June 24, 2005, the United States filed a Complaint alleging that 
the Federation of Physicians and Dentists (``Federation''), Federation 
employee Lynda Odenkirk, and three physician co-defendants coordinated 
a conspiracy among Federation Cincinnati-area OB-GYN members to 
increase fees paid by health care insurers to them, in violation of 
Section 1 of the Sherman Act, 15 U.S.C. 1. The three physician co-
defendants agreed to a settlement entered by the Court on November 14, 
2005. The proposed Final Judgment, filed on June 19, 2007, enjoins the 
Federation and Ms. Odenkirk from taking future actions in Cincinnati or 
anywhere else that could facilitate private-practice physicians' 
coordination of their dealings with health care payers, such as 
insurers, by prohibiting the Federation's involvement in physicians' 
contracting with such payers.
    A Competitive Impact Statement, filed by the United States, 
describes the Complaint, the proposed Final Judgment, the industry, and 
the remedies available to private litigants. Copies of the Complaint, 
proposed Final Judgment, and the Competitive Impact Statement are 
available for inspection at the Department of Justice, Antitrust 
Division, Antitrust Documents Group, Room 215 North, 325 Seventh 
Street, NW., Washington, DC 20530 (telephone 202-514-2481), on the 
Department of Justice's Web site at: https://www.usdoj.gov/atr/cases/
indx26_b.htm, and at the Office of the Clerk of the United States 
District Court for the Southern District of Ohio. Copies of these 
materials may be obtained from the Antitrust Division upon request and 
payment of the copying fee set by Department of Justice regulations.
    Public comment is invited within 60 days of the date of this 
notice. Such comments, and responses thereto, will be published in the 
Federal Register and filed with the Court. Comments should be directed 
to Joseph Miller, Acting Chief, Litigation I, Antitrust Division, 
United States Department of Justice, 1401 H Street, NW., Suite 4000, 
Washington, DC 20530 (telephone: (202) 307-0001).

J. Robert Kramer II,
Director of Operations, Antitrust Division.

United States District Court for the Southern District of Ohio Western 
Division

    United States of America, Plaintiff, vs. Federation of 
Physicians and Dentists, Lynda Odenkirk, Warren Metherd, Michael 
Karram, and James Wendel, Defendants.
    [Civil Action No. 1:05-cv-431; Filed Jun 24, 2005]

Complaint

    The United States of America, acting under the direction of the 
Attorney General of the United States, brings this action for equitable 
and other relief against Defendants: Federation of Physicians and 
Dentists (``Federation''), Federation employee Lynda Odenkirk, and 
Federation members Warren Metherd, M.D., Michael Karram, M.D., and 
James Wendel, M.D., to restrain Defendants' violations of Section 1 of 
the Sherman Act in concert with the Federation's other Cincinnati-area 
obstetrician and gynecologist (``OB-GYN'') members.

I. Introduction

    1. In concert with approximately 120 OB-GYN Federation members 
located in the Cincinnati area (``Federation members''), Defendants 
participated in a conspiracy to increase fees paid by health care 
insurers to Federation members. The Defendant physicians and other 
competing Federation members joined the Federation to use its services 
to coordinate the renegotiation of their contracts with Cincinnati-area 
healthcare insurers. The Federation, with substantial assistance from 
the Defendant physicians, coordinated and helped implement its members' 
concerted demands to insurers for higher fees and related terms, 
accompanied by threats of contract terminations.

[[Page 39451]]

    2. Defendants' and their conspirators' collusion caused Cincinnati-
area health care insurers to raise fees paid to Federation members 
above the levels that would likely have resulted if Federation members 
had negotiated competitively with those insurers. As a result of 
Defendants' and other Federation members' conduct, the three largest 
Cincinnati-area health care insurers were each forced to increase fees 
paid to most Federation members by approximately 15-20% starting July 
1, 2003, followed by cumulative increases of 20-25%, starting January 
1, 2004, and 25-30%, effective January 1, 2005. Defendants' concerted 
conduct also caused other insurers to raise the fees they paid to 
Federation members.
    3. The United States, through this suit, asks this Court to declare 
Defendants' conduct illegal and to enter injunctive relief to prevent 
further injury to consumers in the Greater Cincinnati area and 
elsewhere.

II. Defendants

    4. The Federation is a membership organization comprising mostly 
physicians and dentists, and is headquartered in Tallahassee, Florida. 
The Federation's physician membership includes economically 
independent, competing physicians in private practice in localities in 
many states, including Cincinnati, Ohio. The Federation offers these 
independent physicians assistance in negotiating fees and other terms 
in their contracts with health care insurers.
    5. Lynda Odenkirk has been employed in Wallingford, Connecticut, by 
the Federation since 1997 as a Regional Director and Contract Analyst. 
Ms. Odenkirk worked with Cincinnati-area Federation members from May, 
2002, through at least 2004.
    6. Warren Metherd, M.D., is an OB-GYN presently in a solo practice 
in Cincinnati.
    7. Michael Karram, M.D., is an OB-GYN practicing in Cincinnati and 
is the Chief Executive Officer of Seven Hills Women's Health Centers, a 
practice comprising several groups totaling 22 OB-GYNs in Cincinnati.
     8. James Wendel, M.D., is an OB-GYN practicing in Cincinnati and 
is the Chief Executive Officer of Mount Auburn Obstetrics and 
Gynecologic Associates, Inc., a group practice of nine OB-GYNs in 
Cincinnati.

III. Jurisdiction and Venue

    9. The United States brings this action to prevent and restrain 
Defendants' recurring violations of Section 1 of the Sherman Act. The 
Court has subject matter jurisdiction over this action pursuant to 15 
U.S.C. 4 and 28 U.S.C. 1331 and 1337.
    10. During 2002 and 2003, the Federation's Cincinnati OB-GYN 
Chapter enrolled as paid members over 120 OB-GYN physicians, most 
practicing in the Southern District of Ohio and some in nearby northern 
Kentucky communities. The Federation and Ms. Odenkirk have transacted 
business and committed acts in furtherance of the conspiracy in the 
Southern District of Ohio. Drs. Metherd, Karram, and Wendel each 
provide OB-GYN services in the Southern District of Ohio. Consequently, 
this Court has personal jurisdiction over Defendants, and venue is 
proper in this District pursuant to 28 U.S.C. 1391(b)(2).

IV. Conspirators

    11. Various persons, not named as defendants in this action, have 
participated as conspirators with Defendants in the offense alleged and 
have performed acts and made statements in furtherance of the alleged 
conspiracy.

V. Effects on Interstate Commerce

    12. The activities of the Defendants that are the subject of this 
Complaint are within the flow of, and have substantially affected, 
interstate trade and commerce.
    13. Federation representatives have traveled across state lines to 
meet with Federation members and also have communicated with them by 
mail, e-mail, and telephone across state lines. Federation members have 
communicated with Federation representatives and have remitted their 
Federation membership dues across state lines. Some Federation members 
have also traveled from Kentucky to Ohio to attend Federation meetings 
and have communicated with other Federation members across the Ohio-
Kentucky state line.
     14. Federation members have treated patients who live across state 
lines, and Federation members have also purchased equipment and 
supplies that were shipped across state lines.
    15. Health care insurers operating in the Cincinnati area remit 
substantial payments across state lines to Federation members. Health 
care insurers' payments to Federation members affect the reimbursements 
paid to insurers by self-insured employers, whose plans they 
administer, and also affect the premiums for health care insurance 
those insurers charge other employers. Many of the affected employers 
sell products and services in interstate commerce. The reimbursements 
and premiums those health care insurers receive from employers for 
administration or coverage of the expenses of their employees' health 
care needs, including OB-GYN services, represent a cost of production 
for those employers that affects the prices at which those firms' 
products are sold in interstate commerce.

VI. Cincinnati Area Health Care Insurers and OB-GYNs

    16. At least six major health care insurers provide coverage in the 
Cincinnati area: WellPoint Health Networks, which during the events at 
issue here was named Anthem, Inc. (``Anthem''), Humana Inc. (``Humana'' 
or ``ChoiceCare''), United HealthCare Insurance Company (``United''), 
Cigna Corp. (``Cigna''), Aetna U.S. Healthcare Inc. (``Aetna''), and 
Medical Mutual of Ohio (``Medical Mutual'' or ``MMO'').
    17. Anthem, Humana and United, through administration and insurance 
of health care benefits, are the three largest private health insurers 
operating in the Greater Cincinnati area. On the basis of market share, 
Medical Mutual, Aetna, and Cigna each insures and administers a 
smaller, but still significant, share of privately financed health 
coverage in the Greater Cincinnati area. The remainder of the privately 
financed health insurance coverage market in the Greater Cincinnati 
area consists of a large number of insurers, each with a small share.
    18. All of the major health care insurers operating in the 
Cincinnati area offer a variety of insurance plans to employers and 
their employees, including ``managed care'' plans such as health-
maintenance organizations and preferred provider organizations. To 
offer such plans, an insurer typically contracts with participating 
providers, including physicians and hospitals, to form a provider 
network (or panel). Among other things, such contracts establish the 
fees that the providers will accept as payment in full for providing 
covered medical care to the insurer's subscribers. All of the major 
Cincinnati-area health care insurers consider it necessary to include 
in their provider panels a substantial percentage of OB-GYN physicians 
who practice in the Cincinnati area to make their health care plans 
marketable to area employers and their employees. Before the formation 
of the alleged conspiracy, Federation member groups competed with each 
other, in their willingness to accept an insurer's proposed fee levels 
and other contractual terms, to be included in these insurers' provider 
panels.

[[Page 39452]]

VII. Defendants' Unlawful Activities

    19. In the spring of 2002, Cincinnati OB-GYNs became interested in 
joining the Federation primarily to band together to negotiate higher 
fees from health care insurers. Through a series of meetings with and 
communications to Cincinnati-area OB-GYNs during the spring, the 
Federation--assisted by some local OB-GYNs, including Defendants 
Metherd, Karram, and Wendel--recruited Cincinnati-area OB-GYNs as 
Federation members and laid the foundation for their coordinated 
negotiating positions seeking higher fees from major Cincinnati health 
care insurers. At an initial membership recruitment meeting on April 
17, 2002, a featured presentation by Jack Seddon, the Federation's 
Executive Director, focused on the need for a majority of area OB-GYN 
practices to use the Federation's contract negotiation services to 
obtain increased fees from insurers.
    20. Ms. Odenkirk, the Federation employee with primary 
responsibility for dealing with Federation members in Cincinnati, 
attended a second recruitment meeting on May 7, 2002. At this meeting, 
the OB-GYNs in attendance decided they needed a 60-70% participation 
rate in the Federation by OB-GYN physicians in the Cincinnati area for 
their activities as Federation members to have an impact on area 
insurance companies. By the end of May 2002, about 75-80% of actively 
practicing, Cincinnati-area OB-GYNs had opted to join the Federation.
    21. On June 10, 2002, the Cincinnati-area OB-GYN Federation chapter 
held its organizational meeting, which was attended by representatives 
from many area OB-GYN practices. At the meeting, Jack Seddon, the 
Federation's Executive Director, told the Federation members that, 
although the Federation could legally represent only individual 
physicians, all physicians must remember that they are part of the 
Federation when making any business decisions regarding a contract. He 
also explained that, although the Federation could not directly 
recommend, through its Negotiation Assistance Program, whether 
Federation members should accept or reject a given provider contract, 
physicians would be given enough information to allow them to decide 
whether or not to sign a contract. At the June 10 meeting, Mr. Seddon 
also explained that Federation members could encourage other member 
physicians to use the Federation's Negotiation Assistance Program 
rather than negotiate on their own without Federation involvement.
    22. In June and July 2002, Ms. Odenkirk, in consultation with some 
Federation members, established the order, or the ``game plan,'' by 
which she would review and coordinate their dealings with the first 
five health care insurers contracts: Anthem, ChoiceCare, United, Aetna, 
and Medical Mutual.
    23. The Federation mailed a newsletter dated September 4, 2002, to 
all Federation member practices, notifying them that the Federation had 
reviewed their current Anthem contract. Accompanying the newsletter was 
the Federation's contract analysis and a set of proposed changes. An 
accompanying memorandum addressed to Cincinnati OB-GYN members from Ms. 
Odenkirk advised members that her contract analysis and proposed 
alternative language could be used to open negotiations with Anthem.
    24. The September 4, 2002, newsletter also encouraged Federation 
members to use the Federation's ``extremely valuable service'' of 
acting as their third-party messenger and as a consultant, touted as 
providing the ``advantage of a nationally experienced consultant who 
can certainly look out for their best interests when negotiating with 
insurance plan executives.'' The newsletter suggested that those 
members dissatisfied with their Anthem contracts, as outlined in the 
accompanying contract analysis, should copy an enclosed sample ``third 
party messenger'' letter onto their practice's letterhead to open a 
dialogue with Anthem. The sample letter advised Anthem that the 
submitting practice had ``several items of concern'' regarding its 
current Anthem contract including ``contract language for various 
clauses and reimbursements rates'' and apprised Anthem that ``the 
purpose of this letter is to open negotiations with Anthem regarding 
the provider agreement.'' The sample letter further informed Anthem 
that the practice had decided to use the Federation as a ``third party 
messenger'' to facilitate negotiations and that the Federation would be 
contacting Anthem to open a dialogue. The sample letter also contained 
a thinly veiled warning that the practice might resort to contract 
termination if its concerns were not addressed and was understood as 
such by Anthem.
    25. Following Ms. Odenkirk's September 4, 2002, communications 
regarding the Anthem contract, most Federation member physician 
practice groups copied the sample letter onto their own letterhead, 
signed it, and sent it to Anthem.
    26. The Federation mailed a newsletter dated September 30, 2002, to 
all Federation member practices, informing them that there had been a 
significant response to the September 4, 2002, Anthem contract analysis 
and that many members had opted to use the ``full services'' of the 
Federation.
    27. Starting on October 11, 2002, Ms. Odenkirk followed up on the 
Federation members' letters to Anthem. She notified Anthem that the 
Federation would be facilitating Federation members' discussion of 
their Anthem contract. For each such practice, Ms. Odenkirk sent Anthem 
a substantively identical letter enclosing a proposed amendment to the 
contracts ``that addresses some of their concerns.'' The set of 
proposed amendments was essentially the same set that Ms. Odenkirk had 
forwarded on September 4, 2002, to all Federation members in connection 
with her review of the Anthem contract.
    28. Besides reporting to Federation members' on their response to 
Anthem, the September 30, 2002, Federation newsletter also focused on 
another insurer. The newsletter explained to Federation members that 
the Federation had reviewed their current ChoiceCare contract. The 
newsletter also included a sample letter to inform ChoiceCare that the 
Federation would be representing the medical practice as a third-party 
messenger. The process of negotiating with ChoiceCare then began and 
tracked the pattem of Federation coordination of negotiations with 
Anthem.
    29. The Federation mailed a newsletter dated October 31,2002, to 
all Federation member practices, explaining that the Federation had 
reviewed the contract of yet another insurer: United. The newsletter 
also included a sample letter to inform United that the Federation 
would be representing the medical practice as a third-party messenger. 
The process of negotiations with United then began and tracked the 
pattem of Federation coordination that occurred in negotiations with 
Anthem and ChoiceCare.
    30. The October 31, 2002, newsletter also noted that 39 OB-GYN 
practices had joined the local Federation chapter. The newsletter 
recapped members' status with Anthem, noting that the Federation had 
initiated contact with Anthem, on behalf of those practices that had 
submitted third-party messenger letters to Anthem, and that the 
Federation had received a very significant response from the local 
chapter practices that had sent Anthem a third-party messenger letter. 
The newsletter also reported to Federation members that a significant 
proportion of them had provided e-mail addresses to participate in a 
``Critical Alert'' mass e-

[[Page 39453]]

mailing system developed by the Federation ``to avoid any situation 
where a member might miss critical information from the Federation.''
    31. On November 1, 2002, the day after the October 31, 2002, 
newsletter, Ms. Odenkirk e-mailed a ``Critical Federation Alert'' to 
member practices. After updating all member practices on the status of 
matters involving United, Humana and Anthem, she wrote:

    ALL MEMBERS ARE AGAIN REMINDED OF THEIR REASON FOR JOINING THE 
LOCAL CHAPTER OF THE FEDERATION. THE OVERALL PURPOSE OF THE 
FEDERATION IS TO ALLOW MEMBER PHYSICIANS TO DEAL WITH THE INSURANCE 
INDUSTRY ON AN EQUAL BASIS. WHILE THE FEDERATION CANNOT RECOMMEND 
THAT PHYSICIANS SIGN OR NOT SIGN A GIVEN PROVIDER AGREEMENT, THE 
FEDERATION CAN ADVISE A MEMBER WHEN THEY ARE BEING PRESENTED WITH A 
BAD CONTRACT.

    32. By letters dated November 14, 2002, sent to each practice, 
Anthem responded to the prior correspondence it had received from the 
practice and the Federation. The letters expressed Anthem's willingness 
to meet with the practices individually to discuss the concerns raised. 
Around the same period, Humana communicated to Federation members its 
preference to deal directly with each practice, rather than with the 
Federation representing the practices.
    33. On November 15, 2002, Ms. Odenkirk spoke by telephone with 
Anthem representatives. Ms. Odenkirk told the Anthem employees that she 
represented a large number of OB-GYN practices in the Cincinnati area. 
Anthem told Ms. Odenkirk they would meet and correspond directly with 
individual practices. Though noting during the conversation that each 
practice would need to speak for itself, Ms. Odenkirk stated generally 
that the physicians would be seeking higher fees at 160% of Medicare 
levels.
    34. Following her telephone conversation with Anthem, Ms. Odenkirk 
proceeded to coordinate Federation practices' ``individual'' dealings 
with Anthem, Humana, and United. She e-mailed a ``Critical Federation 
Alert'' on November 19, 2002, to each practice, addressed to the 
attention of ``Office Manager.'' The Alert informed each practice that 
the Federation had, in its role as a third-party messenger, notified 
Anthem of the practice's desire to initiate negotiations regarding the 
current Provider Agreement, and advised Anthem that the practice had 
designated the Federation to represent it and act as its consultant in 
this process. The Alert then informed member practices they had two 
options: Negotiate directly with Anthem (noting that if this option 
were selected the practice was encouraged to forward all communication 
from Anthem to the Federation), or advise Anthem that the practice 
wished to have the Federation speak on its behalf.
    35. Responding promptly, as requested, to Ms. Odenkirk's November 
19, 2002, Critical Federation Alert, most Federation member practices 
notified the Federation in writing that they wanted the Federation to 
speak on their behalf as their third-party messenger for contract 
negotiations with Anthem.
    36. On Saturday morning, December 14, 2002, Ms. Odenkirk and most 
Federation members attended a membership meeting. The meeting was 
called amid apprehension among Federation members that large Federation 
member groups might make individual deals with insurers without regard 
to the interests of smaller Federation groups and solo practitioners. 
Federation members' discussion at the meeting informed the strategy 
that Ms. Odenkirk and the Defendant physicians developed for the 
Federation to coordinate Federation members' contract negotiations with 
Anthem, ChoiceCare, and United. The strategy employed the Federation's 
collective knowledge and consultation with Federation members as the 
``key'' to ensuring that small groups were not ``left behind'' in 
negotiations with insurers.
    37. Following up promptly on the sense of the December 14 meeting, 
Dr. Metherd, in coordination with Drs. Wendel and Karram, prepared a 
draft of a letter for Ms. Odenkirk to send to Federation members. The 
letter suggested that Federation members again send letters to Anthem 
demanding higher fees and contract amendments. Reviewing a redraft of 
the letter by Ms. Odenkirk on December 17, 2003, Dr. Wendel e-mailed 
Dr. Metherd: ``Have reviewed the letter and changes from Lynda 
[Odenkirk], I also think that we need to also send similar letters to 
[C]hoice [C]are and [U]nited. It[']s time to carpet bomb them with 
these letters and demand responses in a timely fashion. This may be a 
way for the [F]ederation to help to facilitate the process.''
    38. On December 20, 2002, Ms. Odenkirk sent to all Federation 
member practices the final version of the letter implementing the 
coordinated strategy developed from the December 14 membership meeting. 
The letter reviewed the status of the Federation's dealings with Anthem 
on members' behalf to discuss ``problems in the provider agreement.'' 
The letter apprised Federation members that Anthem had ``become 
recalcitrant'' toward the Federation's attempts to attend meetings on 
behalf of multiple physician groups and that ``[c]onsequently, the 
Federation [wa]s recommending another tactic by which you may negotiate 
with Anthem.'' The letter sought to provide Federation members ``with a 
clear set of guidelines* * * that w[ould] hopefully lead to a 
productive set of discussions.'' The ``guidelines'' set forth a number 
of steps for member groups to follow, which the Federation touted as 
``the means by which you are most likely to achieve your goals.'' The 
letter also noted: ``If this tactic is UNSUCCESSFUL in achieving a 
contract with Anthem that meets your concerns, then the Federation will 
so notify you that you are continuing to work under a bad contract and 
that you are now left with two options. You may: (1.) Continue to work 
under this bad contract or (2.) Terminate the contract.''
    39. Beginning in January 2003, and following up on the steps Ms. 
Odenkirk had outlined in her December 20, 2002, letter to Federation 
practices, most Federation member practices sent substantively 
identical letters to Anthem enclosing proposed contractual changes 
styled as ``necessary to achieve an equitable business relationship 
between Anthem and this OB/GYN practice.'' The letters sought a 
response from Anthem within two weeks of receipt and advised that ``all 
responses from Anthem will be forwarded to the Federation of Physicians 
and Dentists for review, interpretation and consultation.'' The letters 
closed with a slightly adapted version of the thinly veiled threat of 
termination first raised in the wave of September and October 2002 
third-party messenger letters sent by Federation member practices to 
Anthem: ``This practice truly desires to avoid any interruption of 
obstetrical and gynecological services to Anthem's customers. Such a 
circumstance can be avoided by a meaningful and productive written 
response from Anthem regarding the issues raised herein no later than 
the aforementioned date.''
    40. Proceeding over the next several months, Federation member 
practices-in close coordination with the Federation and with some 
additional direct coordination among Drs. Karram, Wendel, and Metherd-
negotiated contracts with Anthem that provided for a substantial 
increase in fees. While targeting Anthem initially, the Federation, 
with encouragement and assistance from the Defendant

[[Page 39454]]

physicians, also coordinated member groups' efforts to pressure 
ChoiceCare and United to renegotiate their contracts.
    41. Implementing Federation members' similar strategy toward 
ChoiceCare, Ms. Odenkirk sent to ChoiceCare letters dated January 27-
31, 2003, on behalf of 30 member practices. The letters reviewed the 
history of Humana's discussions with each practice, and included each 
practice's desired fee amounts. The letters asked for a response by 
February 14, 2003, and notified Humana that the practice ``still 
intends to forward any and all responses from HUMANA to the Federation 
of Physicians and Dentists for review, interpretation and consultation, 
as they have every right to do.'' Each letter again noted, as had the 
practices' third-party messenger letters sent to Humana in the fall of 
2002, that a service interruption could be avoided by Humana's prompt 
and meaningful written response.
    42. From December 2002, through March 2003, Dr. Karram's and Dr. 
Wendel's large OB-GYN groups spearheaded Federation member groups' 
attempts to renegotiate their contracts with Anthem and Humana. By a 
letter dated March 4, 2003, Humana proposed to Dr. Wendel's group a 30-
month contract increasing fee levels substantially, in stages, over 
existing fees. According to the proposal, the terms were discussed and 
agreed upon in a telephone conversation on March 4. The next day, Dr. 
Wendel's office faxed Humana's proposal to Ms. Odenkirk.
    43. On March 7, 2003, Ms. Odenkirk sent by e-mail and regular mail 
a Critical Federation Alert that had been prepared by Dr. Metherd in 
consultation with Drs. Karram and Wendel and edited and approved by Ms. 
Odenkirk and Mr. Seddon. The Alert encouraged Federation members to 
meet as soon as possible with Anthem and Humana to discuss proposed 
contract changes because the companies ``seem to legitimately desire 
discussions.'' Accompanying the Alert were negotiation guidelines to 
use in meetings, including advice to tell the health plan ``that you 
are seeking a fair contract both in language and reimbursements.'' The 
guidelines also suggested to members, in part, that

    (3.) You may explain to the health plan that you are, or will 
be, reviewing all of your major contracts and negotiating fairer 
terms for all, and that you are not just focusing on any one 
particular health plan. One particular concern a health plan may 
have is that they will be `out front' if they were, for instance, to 
increase reimbursements thereby placing them at a disadvantage with 
their competitors in their markets.

    44. As negotiations progressed, Ms. Odenkirk became active in 
advising groups how to proceed. Dr. Metherd also coordinated with Dr. 
Wendel and other physicians regarding the status of Federation members' 
negotiations with Anthem.
    45. On April 1, 2003, Dr. Metherd e-mailed to Ms. Odenkirk and Mr. 
Seddon proposed additions to a draft Critical Federation Alert that Dr. 
Metherd had begun drafting with them in mid-March. Dr. Metherd proposed 
adding two paragraphs to a draft he had received from Mr. Seddon and 
explained the reason for his additions:

    It is becoming extremely important to somehow inform the smaller 
groups and solo practitioners that the large groups are not 
achieving favorable contracts at the expense of the small groups. * 
* * It's also important to somehow explain that the physicians are 
not going to get 170-180% of Medicare and that 30-35% is a more 
realistic number. Finally, from my personal discussions with the 
insurance companies, the members need to emphasize that all major 
plans are going to be looked at by the physicians. This seems to be 
critical for the insurance companies to hear.
    46. By mid-April 2003, ChoiceCare had reached agreement with 
several of the larger Federation member groups. ChoiceCare continued 
making offers of varying fee amounts to other groups, which, in turn, 
forwarded them to, or discussed them with, Ms. Odenkirk to obtain her 
thoughts. In an April 16, 2003, e-mail, Dr. Metherd updated Ms. 
Odenkirk and suggested how she should advise the smaller Federation 
member groups regarding ChoiceCare:

    Since you know what everyone is getting, we need you to make 
sure that the small groups are pushing to end up in reasonable 
proximity (5% for example) to the larger groups in regards to 
reimbursements. The larger groups need to know that they can utilize 
[the Federation's] guidelines that we sent out on April 3 * * * as a 
way to pressure ChoiceCare to minimize variations in their 
reimbursements.
    Since you are the only one who, as the third party messenger, 
can know all the facts, it is imperative that you use the knowledge 
to push all of us in the same direction. * * * It is absolutely 
critical that one segment of the Federation here not feel that it 
has gained a significant advantage or suffered a significant 
disadvantage at another's expense * * * especially as we will soon 
be moving onto United, Aetna, etc.

    47. By May 1, 2003, Anthem had sent to all Federation members a 
contract amendment raising fees over a three-year period to 120% of 
Medicare fees, as of July, 2003; 125%, as of January, 2004; and 130%, 
as of January, 2005.
    48. By early May 2003, the large OB-GYN practice groups shifted 
their focus to United Healthcare. At a May 8th the meeting with United, 
called by Dr. Wendel to discuss OB-GYN fees in Cincinnati, Dr. Wendel 
informed United that his group had been able to negotiate new deals 
with the other two top payers in Cincinnati. During the meeting, Dr. 
Wendel threatened that his group would terminate its contract if United 
did not offer it a satisfactory deal. At a meeting on the same day with 
United, Dr. Karram conveyed a similar message on behalf of his group.
    49. Dr. Metherd communicated several times in May 2003 with Drs. 
Karram and Wendel concerning his negotiations on fees with ChoiceCare. 
On May 12, 2003, Dr. Metherd responded to ChoiceCare and attempted to 
leverage Federation members' contract renegotiations with Anthem and 
suggested that ChoiceCare would face a boycott if it did not meet his 
and other OB-GYNs' fee demands.
    50. On May 11, 2003, Dr. Metherd sent an e-mail to Drs. Karram, 
Wendel:

    As per our discussions on Friday [May 9th], I think we need to 
do some `campaigning' so to speak. We need to educate the members 
and encourage them to do four things.
    (1.) They need to accept the contract from Anthem. While not 
perfect, it's actually pretty good and Lynda [Odenkirk] also feels 
the same based on my discussions with her this week. Apparently she 
is quite surprised that we have done as well as we have. * * *
    (2.) They need to negotiate with ChoiceCare. * * *
    (3.) Everyone needs to do the above so we can all move onto 
United next especially given the promising discussions that you have 
just had.
    (4.) Finally, membership dues for the Federation are here and we 
need to convince the members that this is worth doing again this 
next year. * * *

    51. Prompted by Dr. Metherd, on May 16, 2003, Ms. Odenkirk sent to 
essentially all Cincinnati Federation members a ``Federation Alert--
Update.'' Ms. Odenkirk's Alert opined that the revised Anthem contract 
was ``as good as it's going to get at this point in time'' and 
suggesting it was ready to be signed. Ms. Odenkirk's Federation Alert 
also posed the Anthem contract to Federation members as a ``benchmark 
to follow'' when negotiating with other comparable health plans.
    52. On May 20, 2003, Dr. Metherd sent to Federation members a 
proposal to endorse a ``large insurance company'' that had recently 
provided a contract with ``physician-friendly'' changes. Dr. Metherd 
explained that the other insurers could also be endorsed if they

[[Page 39455]]

offered similar contracts and expressed the hope that ``this would then 
offer all companies an incentive to work with member physicians to 
achieve physician-friendly agreements.'' The proposal also noted, 
``This concept has been reviewed and approved by the Federation 
leadership.''
    53. At a May 28, 2003, meeting with United representatives, Dr. 
Metherd threatened to terminate his contract with United if it did not 
offer him satisfactory terms. After the meeting, he sent an e-mail to a 
United representative to emphasize the need for United to ``offer an 
acceptable contract to all members'' and complete fee negotiations 
promptly if it wished to participate in the ``endorsement'' program 
that had also been discussed at the meeting.
    54. By May 30, 2003, United had met with about six Federation 
member groups. Each group conveyed that they wanted essentially the 
same deal and would terminate their contracts if they did not get it.
    55. On May 29, 2003, Dr. Metherd sent an e-mail to all Federation 
members requesting their attention to ``some extremely important 
issues,'' including the need for doctors to keep the Federation 
informed of their negotiation status with various insurers. On May 29, 
Dr. Karram e-mailed Ms. Odenkirk and stated, ``I agree with Warren. We 
need to get everyone moving faster and to become more persistent 
otherwise they will not get increases in 03. I am sure that is what 
[ChoiceCare] is doing. Just think of the money they will save if they 
keep delaying people till 04.'' Dr. Karram's e-mail also asked Ms. 
Odenkirk: ``Are we ready to move on to the next player. I think that is 
Medical Mutual of Ohio.''
    56. During June and July 2003, Ms. Odenkirk continued to advise 
Federation members concerning their contract negotiations with 
ChoiceCare, United, and, to a lesser extent, Anthem.
    57. By letters dated June 13, 2003, Ms. Odenkirk sent to United 
proposed contractual amendments for nearly all Federation member 
groups. On June 17, 2003, she apprised the groups of the communications 
to United on their behalf. In a July 9, 2003, Federation Alert, Ms. 
Odenkirk suggested that all Federation members persist in negotiations 
with United and let United ``know that you have been able to achieve a 
significantly better agreement with one of their competitors, and are 
currently in discussions with another competitor, so if they want to 
remain competitive they need to answer you.'' She reiterated 
essentially the same message to Federation members in an August 1, 
2003, Critical Federation Alert. By November 24, 2003, United had 
signed contracts, calling for substantially increased reimbursements, 
with 33 OB-GYN practice groups or solo practitioners, representing the 
vast majority of Federation member physicians.
    58. On June 23, 2003, ChoiceCare representatives met with Drs. 
Karram, Metherd, and Wendel to learn more about the `` `endorsement 
campaign' '' Federation OB-GYNs were planning. Dr. Metherd described 
the endorsement as both public and private support of those managed-
care organizations that had met the OB-GYNs' established minimum fee 
levels. No physician articulated any criterion for being included in 
the endorsement other than meeting their fee demands, despite repeated 
questions about any other criteria. All three physicians confirmed that 
all physicians affiliated with the Federation would have to receive 
fees at or above the fee threshold to receive the endorsement.
    59. On August 10, 2003, Dr. Metherd sent an e-mail survey to 
Federation member practices, inquiring as to the status of negotiations 
with their top three insurance companies. On September 12, 2003, Dr. 
Metherd faxed the results of his August 10 e-mail survey to Ms. 
Odenkirk. The results included the status of negotiations with their 
top three insurance companies for each of the 31 (out of 43) practices 
that responded.
    60. In a September 18, 2003, memo addressed to Cincinnati area 
members, Ms. Odenkirk advised members that

    Cincinnati OB/GYNs have been discussing their issues with 
several health plans and have been reaching successful outcomes. 
Therefore, I continue to encourage you to hav[e] dialogues with 
various health plans. I am in the process [o]f reviewing the Aetna 
and Medical Mutual of Ohio (`MMO') agreements, so if you're 
interested in opening a dialogue with either of these companies, 
please feel free to use the enclosed sample third party letters.

The enclosed sample letters, addressed to Aetna and Medical Mutual, 
appointed the Federation as the practice's third-party messenger, 
raised concerns about contract language and fees, and contained the 
usual language threatening contract termination.
    61. At an October 7, 2003, Federation membership meeting, which Ms. 
Odenkirk attended, both Dr. Wendel and Dr. Metherd announced to 
competing physicians that they had terminated their respective 
unfavorable contracts with Aetna because of Aetna's refusal to discuss 
the contracts.
    62. In an October 17, 2003, Critical Federation Alert, Ms. Odenkirk 
updated members on the status of negotiations with Aetna and Medical 
Mutual. The Alert evaluated Aetna's new fee schedule as ``NOT 
`reasonable for the Cincinnati market' '' and gave Federation members 
specific instructions on how to respond to Aetna's and Medical Mutual's 
fee proposals.
    63. On October 21, 2003, Dr. Metherd e-mailed the entire Cincinnati 
membership to inform them that his practice had terminated Aetna. 
Although written under the pretense only of informing OB-GYNs not to 
refer Aetna patients to him, Dr. Metherd prefaced his message with an 
account of his reason for termination, decrying Aetna's fees as 
``significantly lower than the current market level in the Cincinnati-
Northern Kentucky area'' and Aetna's refusal to renegotiate his 
contract.
    64. On October 29, 2003, Dr. Metherd e-mailed Lynda Odenkirk, 
reporting on strategizing at a meeting that day of the recently formed 
local Federation Chapter Executive Committee, with copies to the 
Executive Committee, which included Drs. Karram and Wendel:

    The meeting went well * * * we're still waiting to see whether 
and how Aetna responds to Seven Hills. Thus far no one else is 
getting any attention from them and, apparently, they are not being 
all that friendly with Seven Hills. We'll just have to wait and see 
* * * all of us at the meeting are aware of the goals of the entire 
Federation and will, hopefully, not forget them. [Dr. Wendel] and I 
are hoping everyone will react to Aetna as we had to [terminating 
their contracts] * * * time will tell. As for endorsing United * * * 
the message back to them is that they still haven't provided `fair 
and equitable' contracting (i.e. the language issues) and that they 
will receive no endorsement as a result. They will be told this by 
Dr. Karram, and, that, if they do better in 2005 when we come back 
to them, then, perhaps they will be endorsed. (all ellipses in 
original)

    65. In an October 29, 2003, memo to Cincinnati area members, Ms. 
Odenkirk noted that a new fee schedule from Cigna represented a 
reduction in rates, and, in her opinion, did not meet the notice 
requirements in the members' contracts with Cigna. Ms. Odenkirk's memo 
included an attached sample letter, addressed to Cigna, which not only 
raised the concerns noted in her memo, but also appointed the 
Federation as the practice's third-party messenger.
    66. On November 5, 2003, Ms. Odenkirk prepared a sample letter for 
Federation members to send Aetna

[[Page 39456]]

regarding its revised fee schedule. The sample letter advised Aetna 
that the sender had ``recently negotiated far better reimbursements 
with several of your competitors, which has significantly changed the 
Cincinnati market. Therefore we find that your fee schedule is not 
reasonable for this area.''
    67. Dr. Metherd commented to Ms. Odenkirk on her sample letter to 
Aetna, in a November 5, 2003, e-mail, which he copied to the Cincinnati 
Chapter Executive Committee:

    The letter looks good * * * Both [another physician] and [Dr.] 
Wendel are making overtures to Aetna as I did in order to judge 
Aetna's reaction. Before we put this out there, let's see what they 
hear as well. * * * If Aetna responds to [another physician] and 
[Dr.] Wendel with a willingness to consider a proposal as they did 
with me, then we can encourage current Aetna providers (and those of 
us that just recently terminated) to renew contact with them via 
both phone and your letter.

    68. On November 7, 2003, Lynda Odenkirk e-mailed a Critical 
Federation Alert updating Federation members on the status of 
negotiations with Medical Mutual, Cigna, and Aetna. Ms. Odenkirk's 
Alert reported about ``multiple terminations of the Aetna agreement by 
Cincinnati-Northern Kentucky OB/GYN physicians'' and that Aetna had now 
indicated a willingness to negotiate with area OB-GYNs. She strongly 
encouraged Federation members--even those that had noticed termination 
of their Aetna contracts--to negotiate with Aetna. Ms. Odenkirk also 
advised Federation members that Medical Mutual had been advised that 
part of its fee schedule offer was ``unacceptable.''
    69. On November 17, 2003, Medical Mutual mailed proposed agreements 
offering substantially increased fees to nearly all Federation member 
practices. On November 19, 2003, Ms. Odenkirk e-mailed a Critical 
Federation Alert that informed Federation members that Medical Mutual's 
new ``proposal is, for all points and purposes, fair and reasonable, as 
it is now in line with agreements you've recently negotiated with other 
companies.'' By early 2004, most of the Federation member practices had 
signed and returned the contracts.
    70. Ms. Odenkirk's November 19, 2003, Critical Federation Alert 
also gave Federation members specific instructions to persist in 
negotiations with Aetna, noting that its fee schedule was 
``considerably below'' current levels. In the same November 19, 2003, 
Critical Federation Alert, Ms. Odenkirk instructed members that ``[b]y 
now you should have sent your third party letter to CIGNA'' and added 
that members should use with Cigna all of the points mentioned 
concerning Aetna. The Alert also included a general comment regarding 
the smaller insurers in the area, such as Aetna, Cigna, and Medical 
Mutual: ``Consequently, you should make these calls and make it plainly 
known to each that you will NOT settle for anything less than a `fair 
and equitable' contract from each. Moreover, you are in such a position 
with the bigger companies that you NO LONGER have to accept UNFAIR 
contracts from these smaller companies.``
    71. Coordinated by the Federation, using the Anthem agreement as a 
benchmark, as Ms. Odenkirk had urged, and using threats of terminating 
their services, Federation members were able to force ChoiceCare, 
United, and Medical Mutual to offer all Federation OB-GYN practices new 
contracts at fees and terms substantially equivalent to those in their 
Anthem contracts.
    72. Most of the contracts between Federation member OB-GYNs and the 
major insurers run through, at least, the end of 2005. The Federation 
continues to have Cincinnati-area member OB-GYNs. Although some OB-GYNs 
have discontinued their membership in the Federation, the Cincinnati 
chapter of the Federation continues to exist and is available to 
coordinate another round of collectively negotiated contracts when the 
current contracts approach expiration.

VIII. Violation Alleged

    73. Beginning at least as early as April, 2002, and continuing to 
date, Defendants and their conspirators have engaged in a combination 
and conspiracy in unreasonable restraint of interstate trade and 
commerce in violation of Section 1 of the Sherman Act, 15 U.S.C. 1. 
This offense is likely to continue and recur unless the relief 
requested is granted.
    74. The combination and conspiracy consisted of an understanding 
and concert of action among Defendants and their conspirators that the 
Federation's Cincinnati Chapter members would coordinate their 
negotiations with health care insurance companies operating in the 
Cincinnati area to enable the collective negotiation of higher fees 
from these health care insurers.
    75. For the purpose of forming and effectuating this combination 
and conspiracy, Defendants and their conspirators did the following 
things, among others:
    (a) Successfully recruited as members of the Federation a high 
percentage of competing OB-GYNs practicing in the Cincinnati area;
    (b) Designated the Federation to represent most Federation members 
in their fee negotiations with Anthem, Humana, United, Medical Mutual, 
Aetna, and Cigna;
    (c) Reached an understanding to coordinate their negotiations 
through the Federation; and
    (d) In coordination with the Federation demanded new, substantially 
higher fees from each insurer while threatening termination of their 
contracts if satisfactory results were not obtained.
    76. This combination and conspiracy has had the following effects, 
among others:
    (a) Price competition among independent and competing OB-GYNs in 
the Cincinnati area who became Federation members has been restrained;
    (b) Health care insurance companies in the Cincinnati area and 
their subscribers have been denied the benefits of free and open 
competition in the purchase of OB-GYN services in the Cincinnati area; 
and
    (c) Self insured employers and their employees have paid 
significantly higher prices for OB-GYN services in the Cincinnati area 
than they would have paid in the absence of this restraint of trade.

IX. Request for Relief

    77. To remedy these illegal acts, the United States of America 
requests that the Court:
    (a) Adjudge and decree that Defendants entered into an unlawful 
contract, combination, or conspiracy in unreasonable restraint of 
interstate trade and commerce in violation of Section 1 of the Sherman 
Act, 15 U.S.C. 1;
    (b) Enjoin the Defendant Federation and its members, officers, 
agents, servants, employees and attorneys and their successors, the 
individual physician Defendants, and all other persons acting or 
claiming to act in active concert or participation with one or more of 
them, from continuing, maintaining, or renewing in any manner, directly 
or indirectly, the conduct alleged herein or from engaging in any other 
conduct, combination, conspiracy, agreement, understanding, plan, 
program, or other arrangement having the same effect as the alleged 
violations or that otherwise violates Section 1 of the Sherman Act, 15 
U.S.C. 1, through price fixing of medical services, collective 
negotiation on behalf of competing independent physicians or physician 
groups, or group boycotts of the purchasers of health care services;

[[Page 39457]]

    (c) Enjoin the Federation and any Federation representative from 
representing or providing consulting services of any kind to any 
medical practice group, or any self-employed physician; and
    (d) Award to plaintiff its costs of this action and such other and 
further relief as may be appropriate and as the Court may deem just and 
proper.

Dated: June 24, 2005.

For Plaintiff United States of America:

R. Hewitt Pate,

Assistant Attorney General, Antitrust Division.

J. Bruce McDonald,

Deputy Assistant Attorney General, Antitrust Division.

J. Robert Kramer,

Director of Enforcement, Antitrust Division.

Mark J. Botti,

Chief, Litigation I, Antitrust Division.

Joseph Miller,

Assistant Chief, Litigation I, Antitrust Division.

Gregory G. Lockhart,

United States Attorney.

Gerald F. Kaminski (Bar No. 0012532),

Assistant United States Attorney, Office of the United States 
Attorney, 221 E. 4th Street, Suite 400, Cincinnati, Ohio 45202 (513) 
684-3711.

Steven Kramer, John Lohrer, Paul Torzilli

Attorneys, Antitrust Division, United States Department of Justice, 
1401 H Street, NW., Suite 4000, Washington, DC 20530, (202) 307-
0997, steven.kramer@usdoj.gov.

Certificate of Service

    I hereby certify that on June 24, 2005, copies of the foregoing 
Complaint were served by facsimile and first-class regular U.S. mail, 
postage prepaid, to:

Michael E. DeFrank, Esq., Hemmer Pangburn DeFrank PLLC, Suite 200, 250 
Grandview Drive, Fort Mitchell, KY 41017, Fax: 859-344-1188, Attorney 
for Defendant Dr. James Wendel.
G. Jack Donson, Jr., Esq., Taft, Stettinius & Hollander, 425 Walnut 
Street, Suite 1800, Cincinnati, Ohio 45202, Fax: 513-381-0205, Attorney 
for Defendant Dr. Michael Karram.
Jeffrey M. Johnston, Esq., 37 North Orange Avenue, Suite 500, Orlando, 
FL 32801, Fax: 407-926-2452, Attorney for Defendant Dr. Warren Metherd.

Paul J. Torzilli,

Attorney, United States Department of Justice.

In the United States District Court for the Southern District of Ohio 
Western Division

    United States of America, Plaintiff, vs. Federation of Physicians 
and Dentists, Lynda Odenkirk, et al., Defendants.
    [Case No. 1:05-cv-431, Hon. Sandra S. Beckwith, C.J., Hon. Timothy 
S. Hogan, M.J.]

[Proposed] Final Judgment As to the Federation of Physicians and 
Dentists and Lynda Odenkirk

    Whereas, Plaintiff, the United States of America, filed its 
Complaint on June 24, 2005, alleging that Defendant Federation of 
Physicians and Dentists (``Defendant FPD''), and Defendant Lynda 
Odenkirk (``Defendant Odenkirk'') (collectively ``the Federation 
Defendants'') participated in agreements in violation of section 1 of 
the Sherman Act;
    Whereas, Plaintiff and the Federation Defendants, by their counsel, 
have consented to the Court's entry of this Final Judgment without 
trial or adjudication of any issue of fact or law, and without this 
Final Judgment constituting any evidence against, or any admission by 
the Federation Defendants that the law has been violated as alleged in 
the Complaint, or that the facts alleged in such Complaint, other than 
the jurisdictional facts, and the allegations admitted in the 
Federation Defendants' Answers, are true;
    Whereas, the essence of this Final Judgment is to restore 
competition, as alleged in the Complaint, and to restrain the 
Federation Defendants from participating in any unlawful conspiracy to 
increase fees for physician services;
    And Whereas, Plaintiff United States requires the Federation 
Defendants to be enjoined from rendering services to, or representing, 
any independent physician pertaining to such physician's dealing with 
any payer, for the purpose of preventing future violations of Section 1 
of the Sherman Act.
    Now Therefore, without trial or adjudication of any issue of law or 
fact, and upon consent of Plaintiff and the Federation Defendants, it 
is Ordered, Adjudged and Decreed:

I. Jurisdiction

    This Court has jurisdiction over the subject matter of and over the 
United States and the Federation Defendants in this action. The 
Complaint states a claim upon which relief may be granted against the 
Federation Defendants under Section 1 of the Sherman Act, 15 U.S.C. 1.

II. Definitions

    As used in this Final Judgment:
    (A) ``Communicate'' means to discuss, disclose, transfer, 
disseminate, or exchange information or opinion, formally or 
informally, in any manner;
    (B) ``Defendant FPD'' means the Federation of Physicians and 
Dentists, its successors and assigns; its subsidiaries, divisions, 
groups, partnerships and joint ventures; and each entity over which it 
has control; and their directors, officers, managers, agents, 
representatives, and employees.
    (C) ``Defendant Odenkirk'' means Lynda Odenkirk, an employee of 
Defendant FPD;
    (D) ``Delaware Decree'' means the final judgment entered in United 
States v. Federation of Physicians and Dentists, Inc., CA 98-475 JJF 
(D. Del., judgment entered Nov. 6, 2002).
    (E) ``The Federation Defendants'' means Defendant FPD and Defendant 
Odenkirk;
    (F) ``Independent physician'' means any physician or physicians in 
private solo or group medical practice, regardless of whether such 
person is a member of the Federation of Physicians and Dentists. For 
purposes of this Final Judgment, an ``independent physician'' does not 
include physicians or other medical professional employees not in 
private practice or who belong to a recognized or certified bargaining 
unit that is affiliated with the Federation of Physicians and Dentists;
    (G) ``Messenger'' means, in relation to the Federation Defendants, 
communicating to a payer any information the Federation Defendants have 
received from an independent physician, or communicating to any 
independent physician any information the Federation Defendants receive 
from any payer;
    (H) ``Payer'' means any person that purchases or pays for all or 
part of a physician's services for itself or any other person and 
includes but is not limited to individuals, health insurance companies, 
health maintenance organizations, preferred provider organizations, and 
employers;
    (I) ``Person'' means any natural person, corporation, firm, 
company, sole proprietorship, partnership, joint venture, association, 
institute, governmental unit, or other legal entity;
    (J) ``Recognized or certified bargaining unit'' means a group of 
physicians that have been recognized or certified pursuant to state or 
federal law to bargain collectively with their common employer over 
wages, terms, and conditions of employment.

[[Page 39458]]

III. Applicability

    (A) This Final Judgment applies to the Federation Defendants and to 
any person, including any independent physician, in active concert or 
participation with the Federation Defendants, who receives actual 
notice of this Final Judgment by personal service or otherwise.
    (B) Defendant Odenkirk shall be bound by the provisions of Section 
IV of this Final Judgment only while she is an employee or agent of, or 
acting in active concert with, Defendant FPD.
    (C) This Final Judgment shall not apply to the conduct of any 
physician or other medical professional employee who belongs to a 
recognized or certified bargaining unit affiliated with Defendant FPD, 
only to the extent such conduct reasonably relates to the lawful 
activities of the recognized or certified bargaining unit.
    (D) Nothing contained in this Final Judgment is intended to suggest 
or imply that any provision herein is or has been created or intended 
for the benefit of any third party and nothing herein shall be 
construed to provide any rights to any third party.
    (E) Nothing contained in this Final Judgment is intended to suggest 
or imply that Defendant FPD's obligations under the Delaware Decree 
have been diminished, limited, curtailed, or otherwise modified.
    (F) In the event of any conflict or inconsistency between Section 
IV of this Final Judgment, and sections IV or V of the Delaware Decree, 
this Final Judgment controls.

IV. Prohibited Conduct

    The Federation Defendants are enjoined from, in any manner, 
directly or indirectly:
    (A) Providing, or attempting to provide, any services to any 
independent physician regarding such physician's actual, possible, or 
contemplated negotiation, contracting, or other dealings with any 
payer;
    (B) Acting, or attempting to act, in a representative capacity, 
including as a messenger or in dispute resolution (such as 
arbitration), for any independent physician with any payer;
    (C) Reviewing or analyzing, or attempting to review or analyze, for 
any independent physician, any proposed or actual contract or contract 
term between such physician and any payer;
    (D) Communicating, or attempting to communicate, with any 
independent physician about that physician's, or any other physician's, 
negotiating, contracting, or participating status with any payer, or, 
except as consistent with section V(A), about any proposed or actual 
contract or contract term between any independent physician and any 
payer;
    (E) Responding, or attempting to respond, to any question or 
request initiated by any payer, except to state that this Final 
Judgment prohibits such response; and
    (F) Training or educating, or attempting to train or educate, any 
independent physician in any aspect of contracting or negotiating with 
any payer, including but not limited to, contractual language and 
interpretation thereof, methodologies of payment or reimbursement by 
any payer for such physician's services, and dispute resolution such as 
arbitration, except that the Federation Defendants may, provided they 
do not violate sections IV(A) through IV(E) of this Final Judgment, (1) 
Speak on general topics (including contracting), but only when invited 
to do so as part of a regularly scheduled medical educational seminar 
offering continuing medical education credit and only if at least five-
days advance written notice has been provided to Plaintiff and any 
handouts, outlines, presentation slides, notes or other documents 
relating to what was said by the Federation Defendants are retained by 
the Defendant FPD for possible inspection by Plaintiff; (2) publish 
articles on general topics (including contracting) in a regularly 
disseminated newsletter; and (3) provide education to independent 
physicians regarding the regulatory structure (including legislative 
developments) of workers compensation, Medicaid, and Medicare, except 
Medicare Advantage.

V. Permitted Conduct

    (A) The Federation Defendants may engage in activities that fall 
within the safety zone set forth in Statement 6 of the 1996 Statements 
of Antitrust Enforcement Policy in Health Care, 4 Trade Reg. Rep. (CCH) 
] 13,153.
    (B) Nothing in this Final Judgment shall prohibit the Federation 
Defendants, or any one or more of Defendant FPD's members from:
    (1) Engaging or participating in lawful union organizational 
efforts and activities;
    (2) Advocating or discussing, in accordance with the doctrine 
established in Eastern Railroad Presidents Conference v. Noerr Motor 
Freight, Inc., 365 U.S. 127 (1961), United Mine Workers v. Pennington, 
381 U.S. 657 (1965), and their progeny, legislative, judicial, or 
regulatory actions, or other governmental policies or actions; and
    (3) Exercising rights protected by the National Labor Relations Act 
or any state collective bargaining laws.
    (C) Nothing in this Final Judgment shall prohibit:
    (1) Any independent physician to whom this Final Judgment applies 
from engaging solely with other members or employees of such 
physician's bona fide solo practice or practice group in activities 
otherwise prohibited herein;
    (2) Any independent physician to whom this Final Judgment applies 
from acting alone in the exercise of his or her own independent 
business judgment, from choosing the payer or payers with which to 
contract, and/or refusing to enter into discussions or negotiations 
with any payer.
    (D) Nothing in this Final Judgment shall prohibit or impair the 
right of the Federation Defendants (or any affiliate thereof) as a 
labor organization from communicating with other labor organizations 
concerning the identity of payers who are considered pro- or anti-
union, provided such activity is consistent with Sec.  8(b)(4) of the 
National Labor Relations Act, 29 U.S.C. 158(b)(4), and to the extent it 
does not constitute a secondary boycott.

VI. Compliance

    To facilitate compliance with this Final Judgment, Defendant FPD 
shall:
    (A) Distribute within 60 days from the entry of this Final 
Judgment, a copy of this Final Judgment and the Competitive Impact 
Statement to:
    (1) All of Defendant FPD's directors, officers, managers, agents, 
employees, and representatives, who provide or have provided, or 
supervise or have supervised the provision of, services to independent 
physicians; and
    (2) All of Defendant FPD's members who are independent physicians.
    (B) Distribute as soon as practicable a copy of this Final Judgment 
and the Competitive Impact Statement to:
    (1) Any person who succeeds to a position with Defendant FPD 
described in section VI(A), in no event shall such distribution occur 
more than fifteen (15) days later than such person assumes such 
position; and
    (2) Any independent physician who becomes a member of Defendant 
FPD, in no event shall such distribution occur more than fifteen (15) 
days later than such physician becomes a member.
    (C) Conduct an annual seminar explaining to all of Defendant FPD's 
directors, officers, managers, agents, employees, and representatives, 
who provide or have provided, or supervise or have supervised the 
provision of, services to independent physicians, the antitrust 
principles applicable to their

[[Page 39459]]

work, the restrictions contained in this Final Judgment, and the 
implications of violating the Final Judgment;
    (D) Maintain an internal mechanism by which questions about the 
application of the antitrust laws and this Final Judgment from any of 
Defendant FPD's directors, officers, managers, agents, employees, and 
representatives, who provide or have provided, or supervise or have 
supervised the provision of, services to independent physicians, can be 
answered by counsel as the need arises;
    (E) Obtain a certificate from each person to whom Defendant FPD 
must distribute this Final Judgment:
    (1) Pursuant to section VI(A), within 120 days from the entry of 
this Final Judgment; and
    (2) Pursuant to section VI(B), as soon as practicable but in no 
event more than 120 days from the date of such distribution;
    The certificate shall state that such person has received, read, 
and understands this Final Judgment, and that such person has been 
advised and understands that such person must comply with this Final 
Judgment and may be held in civil or criminal contempt for failing to 
do so. Defendant FPD shall retain each certificate for the duration of 
this Final Judgment; and
    (F) Maintain for inspection by Plaintiff a record of recipients to 
whom this Final Judgment, and Competitive Impact Statement have been 
distributed and from whom written certifications, pursuant to section 
VI(E), have been received.

VII. Certification

    (A) Within 75 days after entry of this Final Judgment, Defendant 
FPD shall certify to Plaintiff that it has provided a copy of this 
Final Judgment to all