Independent Practice Associates Medical Group, Inc.; Agreement Containing Consent Order To Aid Public Comment, 291-293 [E8-31385]
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Federal Register / Vol. 74, No. 2 / Monday, January 5, 2009 / Notices
attempts to engage in any action
prohibited by Paragraph II.A, or II.B,
and Paragraph II.D. proscribes BVIPA
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,
Paragraph II excludes certain kinds of
agreements from its prohibitions. First,
BVIPA is not precluded from engaging
in conduct that is reasonably necessary
to form or participate in legitimate joint
contracting arrangements among
competing physicians, such as a
‘‘qualified risk-sharing joint
arrangement’’ or a ‘‘qualified clinicallyintegrated joint arrangement.’’ The
arrangement, however, must not restrict
the ability of, or facilitate the refusal of,
physicians who participate in it to
contract with payers outside of the
arrangement.
As defined in the proposed Order, a
‘‘qualified risk-sharing joint
arrangement’’ possesses two
characteristics. First, all physician
participants must share substantial
financial risks 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
BVIPA to notify the Commission before
it enters into any arrangements to act as
a messenger or an agent on behalf of any
physicians, with payers regarding
contracts. Paragraph IV sets out the
information necessary to make the
notification complete.
Paragraph V, for three years, requires
BVIPA to notify the Commission before
participating in contracting with health
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plans on behalf of either a qualified risksharing or a qualified clinicallyintegrated joint arrangement. Paragraph
VI sets out the information necessary to
satisfy the notification requirement.
Paragraph VII imposes other
notification obligations on BVIPA and
requires the termination of certain
contracts that were entered into
illegally. Paragraphs VII.A requires
BVIPA to distribute the Complaint and
the Order to (1) physicians who have
participated in BVIPA since 2001; (2) to
various past and current personnel of
BVIPA; and (3) to payers with whom
BVIPA has dealt since 2001. Paragraph
VII.B requires BVIPA, at any payer’s
request and without penalty, to
terminate its existing contracts with the
payer for the provision of physician
services. Paragraph VII.B. allows certain
contracts currently in effect to be
extended at the written request of the
payer no longer than one year from the
date that the Order becomes final.
Paragraph VII.C requires BVIPA to
distribute payer requests for contract
termination to physicians who
participate in the contract. Paragraph
VII.D requires BVIPA, for three years, to
provide new members, personnel, and
payers not previously receiving a copy,
a copy of the Order and the Complaint.
Paragraph VII.D also requires BVIPA to
publish annually a copy of the Order
and the Complaint in its newsletter.
Paragraphs VIII, IX, and X impose
various obligations on BVIPA to report
or provide access to information to the
Commission to facilitate the monitoring
of compliance with the Order. Finally,
Paragraph XI provides that the Order
will expire in 20 years.
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. E8–31384 Filed 1–2–09: 8:45 am]
BILLING CODE 6750–01–S
FEDERAL TRADE COMMISSION
[File No. 061 0258]
Independent Practice Associates
Medical Group, Inc.; Agreement
Containing Consent Order To Aid
Public Comment
Federal Trade Commission.
Proposed Consent Agreement.
AGENCY:
ACTION:
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
SUMMARY:
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291
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 January 22, 2009.
ADDRESSES: Interested parties are
invited to submit written comments.
Comments should refer to ‘‘AllCareIPA,
File No. 061 0258,’’ 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, N.W.,
Washington, D.C. 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 by
following the instructions on the webbased form at (https://
secure.commentworks.com/ftcAllCareIPA). To ensure that the
Commission considers an electronic
comment, you must file it on that webbased form.
The FTC Act and other laws the
Commission administers permit the
collection of public comments to
consider and use in this proceeding as
appropriate. All timely and responsive
public comments, whether filed in
paper or electronic form, will be
considered by the Commission, and will
be available to the public on the FTC
website, to the extent practicable, at
www.ftc.gov. As a matter of discretion,
the FTC makes every effort to remove
home contact information for
individuals from the public comments it
receives before placing those comments
on the FTC website. More information,
including routine uses permitted by the
Privacy Act, may be found in the FTC’s
privacy policy, at (https://www.ftc.gov/
ftc/privacy.shtm).
1 The comment must be accompanied by an
explicit request for confidential treatment,
including the factual and legal basis for the request,
and must identify the specific portions of the
comment to be withheld from the public record.
The request will be granted or denied by the
Commission’s General Counsel, consistent with
applicable law and the public interest. See
Commission Rule 4.9(c), 16 CFR 4.9(c).
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292
Federal Register / Vol. 74, No. 2 / Monday, January 5, 2009 / Notices
FOR FURTHER INFORMATION CONTACT: John
P. Wiegand, FTC Western Region, San
Francisco, 600 Pennsylvania Avenue,
NW, Washington, D.C. 20580, (415) 8485174.
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 December 24, 2008), on
the World Wide Web, at (https://
www.ftc.gov/os/2008/12/index.htm). A
paper copy can be obtained from the
FTC Public Reference Room, Room 130H, 600 Pennsylvania Avenue, NW,
Washington, D.C. 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 Independent
Practice Associates Medical Group, Inc.,
dba AllCare IPA (‘‘AllCare’’ or
‘‘Respondent’’). The agreement settles
charges that AllCare violated Section 5
of the Federal Trade Commission Act,
15 U.S.C. § 45, by fixing prices charged
to those offering coverage for health care
services (‘‘payors’’) in the Modesto,
California, area and refusing to deal
with payors. 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 Consent Order final.
The purpose of this analysis is to
facilitate public comment on the
proposed Consent Order. The analysis is
not intended to constitute an official
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Jkt 217001
interpretation of the agreement and
proposed Consent 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 Respondent that it
violated the law or that the facts alleged
in the Complaint (other than
jurisdictional facts) are true.
The Complaint’s Allegations
AllCare is a multi-specialty
independent practice association
consisting of multiple, independent
medical practices with a total of
approximately 500 physician members,
of which approximately 200 are devoted
to primary care, in the Modesto,
California, area. Since its formation,
AllCare has negotiated contracts with
payors under which it has received
capitated (per member per month)
payments. These contracts shift the risk
of patient illness to the IPA by
specifying that the health plan will pay
the IPA a flat monthly fee for each
enrollee, with almost no regard for
patient utilization. This type of
contracting is a form of financial
integration. The Complaint does not
challenge AllCare’s activities
concerning these contracts.
AllCare and its physicians also
contract with Preferred Provider
Organizations (‘‘PPOs’’) to provide feefor-service medical care. In PPO
arrangements, the payor compensates
physicians or group practices for
services actually rendered pursuant to
agreed-upon fee schedules. PPO
contracts may or may not entail
financial risk-sharing or clinical
integration on the part of providers. It is
AllCare’s negotiation of certain PPO
contracts that is the subject of the
Commission’s Complaint.
The Complaint alleges that AllCare,
since at least 2005, has acted to restrain
competition on fee-for-service contracts
by facilitating, entering into, and
implementing agreements to fix the
prices and other terms in contracts with
PPO payors; to engage in collective
negotiations over terms and conditions
of dealing with such payors; and to have
AllCare members refrain from
negotiating individually with such
payors or contracting on terms other
than those approved by AllCare. The
Complaint further alleges that AllCare,
to enforce the joint negotiation efforts,
caused a significant number of AllCare
physicians to sent to at least one payor
the same form termination letter. These
letters terminated the physicians’
individual agreements with the payor
and affirmed that the physicians would
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contract with the payor only through an
agreement with AllCare.
AllCare did not engage in any activity
that might justify collective agreements
on the prices its members would accept
for their services. The physicians in
AllCare, with respect to PPO contracts,
do not share any financial risk in
providing medical services, do not
collaborate in programs to monitor and
modify clinical practice patterns to
control members’ costs and ensure
quality, or otherwise integrate their
delivery of health care services. The
Respondent’s actions have restrained
price and other forms of competition
among physicians in the Modesto,
California, area and thereby harmed
consumers (including health plans,
employers, and individual consumers)
by increasing the prices for physician
services.
The Proposed Consent Order
The proposed Consent Order is
designed to prevent the continuance
and recurrence of the unlawful conduct
alleged in the Complaint while allowing
AllCare to engage in legitimate, joint
conduct. The proposed Consent Order
does not affect AllCare’s activities in
contracting with the payors on a
capitated basis.
Paragraph II.A prohibits Respondent
from entering into or facilitating
agreements between or among any
health care providers (1) to negotiate on
behalf of any physician with any payor,
(2) to refuse to deal, or threaten to refuse
to deal with any payor, (3) regarding any
term, condition, or requirement upon
which any physician deals, or is willing
to deal, with any payor, including, but
not limited to price terms or (4) not to
deal individually with any payor, or not
to deal with any payor except through
AllCare.
The other parts of Paragraph II
reinforce these general prohibitions.
Paragraph II.B prohibits the Respondent
from facilitating exchanges of
information between health care
providers 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
encouraging, suggesting, advising,
pressuring, inducing, or attempting to
induce any person to engage in any
action that would be prohibited by
Paragraphs II.A through II.C.
As in other Commission orders
addressing health care providers’
collective bargaining with health care
purchasers, certain kinds of agreements
are excluded from the general bar on
joint negotiations. Paragraph II does not
preclude AllCare from engaging in
E:\FR\FM\05JAN1.SGM
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Federal Register / Vol. 74, No. 2 / Monday, January 5, 2009 / Notices
conduct that is reasonably necessary to
form or participate in legitimate
‘‘qualified risk-sharing’’ or ‘‘qualified
clinically-integrated’’ joint
arrangements, as defined in the
proposed Consent Order. Also,
Paragraph II would not bar agreements
that only involve physicians who are
part of the same medical group practice,
defined in Paragraph I.B, because it is
intended to reach agreements between
and among independent competitors.
Paragraphs III and IV require AllCare
to notify the Commission before it
initiates any arrangement to act as an
agent or messenger with respect to
physician contracting with payors. The
Order also would require AllCare to
provide to the Commission key details
of the arrangement and to delay the
implementation of that arrangement to
permit further factual discovery by the
Commission at its option. Paragraph III
applies such requirements to
arrangements under which AllCare
would be acting as a messenger, and
Paragraph IV applies them to
arrangements under which AllCare
plans to achieve financial or clinical
integration.
Paragraph V.A requires AllCare to
send a copy of the Complaint and
Consent Order to its physician
members, its management and staff, and
any payors who communicated with
AllCare, or with whom AllCare
communicated, with regard to any
interest in contracting for physician
services.
Part V.B. of the Order requires AllCare
to terminate preexisting payor contracts
held by physicians who were AllCare
participants since January 1, 2005, upon
(1) receipt by AllCare of a written
request for termination by relevant
payors, or (2) the termination date,
renewal date, or anniversary date of the
contract, whichever is earlier. This
termination can be delayed for up to one
year after the effective date of the Order,
upon the written request of the payor.
This provision is intended to eliminate
the effects of AllCare’s joint price setting
behavior.
Paragraph V.C requires that AllCare
send a copy of any payor’s request for
termination to every physician who
participates in each group. Paragraph
V.D contains further notification
provisions relating to future contact
with physicians, payors, management,
and staff. This provision requires
AllCare to distribute a copy of the
Complaint and Consent Order to each
physician who begins participating in
each group; each payor who contacts
each group regarding the provision of
physician services; and each person
who becomes an officer, director,
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17:13 Jan 02, 2009
Jkt 217001
manager, or employee for three years
after the date on which the Consent
Order becomes final. In addition,
Paragraph V.D requires AllCare to
publish a copy of the Complaint and
Consent Order, for three years, in any
official publication that it sends to its
participating physicians.
Paragraphs V.E and VI-VII impose
various obligations on AllCare to
provide to the Commission information
that would assist in the monitoring of
Respondent’s compliance with the
Consent Order.
Pursuant to Paragraph VIII, the
proposed Consent Order will expire in
20 years from the date it is issued.
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. E8–31385 Filed 1–2–09: 8:45 am]
BILLING CODE 6750–01–S
FEDERAL TRADE COMMISSION
[File No. 061 0123]
Inverness Medical Innovations, Inc.;
Agreement Containing 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 January 20, 2009.
ADDRESSES: Interested parties are
invited to submit written comments.
Comments should refer to ‘‘Inverness
Medical Innovations, File No. 061
0123,’’ 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,
N.W., Washington, D.C. 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
1 The comment must be accompanied by an
explicit request for confidential treatment,
PO 00000
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293
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 by
following the instructions on the webbased form at (https://
secure.commentworks.com/ftcInverness). To ensure that the
Commission considers an electronic
comment, you must file it on that webbased form.
The FTC Act and other laws the
Commission administers permit the
collection of public comments to
consider and use in this proceeding as
appropriate. All timely and responsive
public comments, whether filed in
paper or electronic form, will be
considered by the Commission, and will
be available to the public on the FTC
website, to the extent practicable, at
www.ftc.gov. As a matter of discretion,
the FTC makes every effort to remove
home contact information for
individuals from the public comments it
receives before placing those comments
on the FTC website. More information,
including routine uses permitted by the
Privacy Act, may be found in the FTC’s
privacy policy, at (https://www.ftc.gov/
ftc/privacy.shtm).
FOR FURTHER INFORMATION CONTACT: Lore
Unt, FTC Bureau of Competition, 600
Pennsylvania Avenue, NW, Washington,
D.C. 20580, (202) 326-3019.
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 December 23, 2008), on
the World Wide Web, at (https://
www.ftc.gov/os/2008/12/index.htm). A
paper copy can be obtained from the
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\05JAN1.SGM
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]]>Agencies
[Federal Register Volume 74, Number 2 (Monday, January 5, 2009)]
[Notices]
[Pages 291-293]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-31385]
-----------------------------------------------------------------------
FEDERAL TRADE COMMISSION
[File No. 061 0258]
Independent Practice Associates Medical Group, Inc.; Agreement
Containing 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 January 22, 2009.
ADDRESSES: Interested parties are invited to submit written comments.
Comments should refer to ``AllCareIPA, File No. 061 0258,'' 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, N.W., Washington, D.C. 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 by following the instructions on the web-based form at (https://
secure.commentworks.com/ftc-AllCareIPA). To ensure that the Commission
considers an electronic comment, you must file it on that web-based
form.
---------------------------------------------------------------------------
\1\ The comment must be accompanied by an explicit request for
confidential treatment, including the factual and legal basis for
the request, and must identify the specific portions of the comment
to be withheld from the public record. The request will be granted
or denied by the Commission's General Counsel, consistent with
applicable law and the public interest. See Commission Rule 4.9(c),
16 CFR 4.9(c).
---------------------------------------------------------------------------
The FTC Act and other laws the Commission administers permit the
collection of public comments to consider and use in this proceeding as
appropriate. All timely and responsive public comments, whether filed
in paper or electronic form, will be considered by the Commission, and
will be available to the public on the FTC website, to the extent
practicable, at www.ftc.gov. As a matter of discretion, the FTC makes
every effort to remove home contact information for individuals from
the public comments it receives before placing those comments on the
FTC website. More information, including routine uses permitted by the
Privacy Act, may be found in the FTC's privacy policy, at (https://
www.ftc.gov/ftc/privacy.shtm).
[[Page 292]]
FOR FURTHER INFORMATION CONTACT: John P. Wiegand, FTC Western Region,
San Francisco, 600 Pennsylvania Avenue, NW, Washington, D.C. 20580,
(415) 848-5174.
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 December 24, 2008), on the World Wide Web, at (https://www.ftc.gov/
os/2008/12/index.htm). A paper copy can be obtained from the FTC Public
Reference Room, Room 130-H, 600 Pennsylvania Avenue, NW, Washington,
D.C. 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
Independent Practice Associates Medical Group, Inc., dba AllCare IPA
(``AllCare'' or ``Respondent''). The agreement settles charges that
AllCare violated Section 5 of the Federal Trade Commission Act, 15
U.S.C. Sec. 45, by fixing prices charged to those offering coverage
for health care services (``payors'') in the Modesto, California, area
and refusing to deal with payors. 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 Consent Order
final.
The purpose of this analysis is to facilitate public comment on the
proposed Consent Order. The analysis is not intended to constitute an
official interpretation of the agreement and proposed Consent 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 Respondent that it violated the law or that
the facts alleged in the Complaint (other than jurisdictional facts)
are true.
The Complaint's Allegations
AllCare is a multi-specialty independent practice association
consisting of multiple, independent medical practices with a total of
approximately 500 physician members, of which approximately 200 are
devoted to primary care, in the Modesto, California, area. Since its
formation, AllCare has negotiated contracts with payors under which it
has received capitated (per member per month) payments. These contracts
shift the risk of patient illness to the IPA by specifying that the
health plan will pay the IPA a flat monthly fee for each enrollee, with
almost no regard for patient utilization. This type of contracting is a
form of financial integration. The Complaint does not challenge
AllCare's activities concerning these contracts.
AllCare and its physicians also contract with Preferred Provider
Organizations (``PPOs'') to provide fee-for-service medical care. In
PPO arrangements, the payor compensates physicians or group practices
for services actually rendered pursuant to agreed-upon fee schedules.
PPO contracts may or may not entail financial risk-sharing or clinical
integration on the part of providers. It is AllCare's negotiation of
certain PPO contracts that is the subject of the Commission's
Complaint.
The Complaint alleges that AllCare, since at least 2005, has acted
to restrain competition on fee-for-service contracts by facilitating,
entering into, and implementing agreements to fix the prices and other
terms in contracts with PPO payors; to engage in collective
negotiations over terms and conditions of dealing with such payors; and
to have AllCare members refrain from negotiating individually with such
payors or contracting on terms other than those approved by AllCare.
The Complaint further alleges that AllCare, to enforce the joint
negotiation efforts, caused a significant number of AllCare physicians
to sent to at least one payor the same form termination letter. These
letters terminated the physicians' individual agreements with the payor
and affirmed that the physicians would contract with the payor only
through an agreement with AllCare.
AllCare did not engage in any activity that might justify
collective agreements on the prices its members would accept for their
services. The physicians in AllCare, with respect to PPO contracts, do
not share any financial risk in providing medical services, do not
collaborate in programs to monitor and modify clinical practice
patterns to control members' costs and ensure quality, or otherwise
integrate their delivery of health care services. The Respondent's
actions have restrained price and other forms of competition among
physicians in the Modesto, California, area and thereby harmed
consumers (including health plans, employers, and individual consumers)
by increasing the prices for physician services.
The Proposed Consent Order
The proposed Consent Order is designed to prevent the continuance
and recurrence of the unlawful conduct alleged in the Complaint while
allowing AllCare to engage in legitimate, joint conduct. The proposed
Consent Order does not affect AllCare's activities in contracting with
the payors on a capitated basis.
Paragraph II.A prohibits Respondent from entering into or
facilitating agreements between or among any health care providers (1)
to negotiate on behalf of any physician with any payor, (2) to refuse
to deal, or threaten to refuse to deal with any payor, (3) regarding
any term, condition, or requirement upon which any physician deals, or
is willing to deal, with any payor, including, but not limited to price
terms or (4) not to deal individually with any payor, or not to deal
with any payor except through AllCare.
The other parts of Paragraph II reinforce these general
prohibitions. Paragraph II.B prohibits the Respondent from facilitating
exchanges of information between health care providers 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 encouraging, suggesting, advising,
pressuring, inducing, or attempting to induce any person to engage in
any action that would be prohibited by Paragraphs II.A through II.C.
As in other Commission orders addressing health care providers'
collective bargaining with health care purchasers, certain kinds of
agreements are excluded from the general bar on joint negotiations.
Paragraph II does not preclude AllCare from engaging in
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conduct that is reasonably necessary to form or participate in
legitimate ``qualified risk-sharing'' or ``qualified clinically-
integrated'' joint arrangements, as defined in the proposed Consent
Order. Also, Paragraph II would not bar agreements that only involve
physicians who are part of the same medical group practice, defined in
Paragraph I.B, because it is intended to reach agreements between and
among independent competitors.
Paragraphs III and IV require AllCare to notify the Commission
before it initiates any arrangement to act as an agent or messenger
with respect to physician contracting with payors. The Order also would
require AllCare to provide to the Commission key details of the
arrangement and to delay the implementation of that arrangement to
permit further factual discovery by the Commission at its option.
Paragraph III applies such requirements to arrangements under which
AllCare would be acting as a messenger, and Paragraph IV applies them
to arrangements under which AllCare plans to achieve financial or
clinical integration.
Paragraph V.A requires AllCare to send a copy of the Complaint and
Consent Order to its physician members, its management and staff, and
any payors who communicated with AllCare, or with whom AllCare
communicated, with regard to any interest in contracting for physician
services.
Part V.B. of the Order requires AllCare to terminate preexisting
payor contracts held by physicians who were AllCare participants since
January 1, 2005, upon (1) receipt by AllCare of a written request for
termination by relevant payors, or (2) the termination date, renewal
date, or anniversary date of the contract, whichever is earlier. This
termination can be delayed for up to one year after the effective date
of the Order, upon the written request of the payor. This provision is
intended to eliminate the effects of AllCare's joint price setting
behavior.
Paragraph V.C requires that AllCare send a copy of any payor's
request for termination to every physician who participates in each
group. Paragraph V.D contains further notification provisions relating
to future contact with physicians, payors, management, and staff. This
provision requires AllCare to distribute a copy of the Complaint and
Consent Order to each physician who begins participating in each group;
each payor who contacts each group regarding the provision of physician
services; and each person who becomes an officer, director, manager, or
employee for three years after the date on which the Consent Order
becomes final. In addition, Paragraph V.D requires AllCare to publish a
copy of the Complaint and Consent Order, for three years, in any
official publication that it sends to its participating physicians.
Paragraphs V.E and VI-VII impose various obligations on AllCare to
provide to the Commission information that would assist in the
monitoring of Respondent's compliance with the Consent Order.
Pursuant to Paragraph VIII, the proposed Consent Order will expire
in 20 years from the date it is issued.
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. E8-31385 Filed 1-2-09: 8:45 am]
BILLING CODE 6750-01-S
