United States v. Chiropractic Associates, Ltd. of South Dakota Proposed Final Judgment and Competitive Impact Statement, 22901-22908 [2013-09035]

Agencies

• Antitrust Division
• Department of Justice

[Federal Register Volume 78, Number 74 (Wednesday, April 17, 2013)]
[Notices]
[Pages 22901-22908]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-09035]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. Chiropractic Associates, Ltd. of South Dakota 
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)-(h), that a proposed Final Judgment, 
Stipulation, and Competitive Impact Statement have been filed with the 
United States District Court for the District of South Dakota in United 
States of America v. Chiropractic Associates Ltd, of South Dakota, 
(CASD), Civil Case No. 13-CV-4030-LLP. On April 8, 2013, the United 
States filed a Complaint alleging that CASD and its members formed a 
conspiracy to gain more favorable fees and other contractual terms by 
agreeing to coordinate their actions, in violation of Section 1 of the 
Sherman Act, 15 U.S.C. 1. The proposed Final Judgment, filed at the 
same time as the Complaint, enjoins CASD from establishing prices or 
terms for chiropractic services.
    Copies of the Complaint, proposed Final Judgment, and Competitive 
Impact Statement are available for inspection at the Department of 
Justice, Antitrust Division, Antitrust Documents Group, 450 Fifth 
Street, NW., Suite 1010, Washington, DC 20530 (telephone: 202-514-
2481), on the Department of Justice's Web site at https://www.justice.gov/atr, and at the Office of the Clerk of the United 
States District Court for the District of South Dakota. 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 filed with the 
Court and posted on the U.S. Department of Justice, Antitrust 
Division's Web site, and, under certain circumstances, published in the 
Federal Register. Comments should be directed to Peter J. Mucchetti, 
Chief, Litigation I Section, Antitrust Division, U.S. Department of 
Justice, 450 Fifth Street NW., Suite 4100, Washington, DC 20530 
(telephone: 202-307-0001).

Patricia A. Brink,
Director of Civil Enforcement.

Complaint

    The United States of America, acting under the direction of the 
Attorney General of the United States, brings this civil antitrust 
action against Defendant Chiropractic Associates, Ltd. of South Dakota 
(``CASD'' or the ``Defendant'') to obtain equitable and other relief to 
prevent and remedy violations of Section 1 of the Sherman Act, 15 
U.S.C. 1. Plaintiff alleges as follows:

I. Nature of the Action

    1. CASD is an association of approximately 300 chiropractors who 
compete with each other in the sale of chiropractic services. CASD's 
members compromise approximately 80 percent of all chiropractors 
practicing in South Dakota. On behalf of its members, CASD contracts 
with health insurers and other payers (collectively, ``payers'').
    2. Since 1997, all of CASD's members have entered into membership 
agreements with CASD that give CASD the right to collectively negotiate 
rates on their behalf with payers.
    3. Since 1997, CASD has negotiated contracts on behalf of its 
members with at least seven payers. These contracts set the prices and 
price-related terms between CASD's members and those payers. CASD's 
conduct has raised the prices of chiropractic services and decreased 
the availability of chiropractic services in South Dakota.
    4. The United States, through this suit, asks this Court to declare 
CASD's conduct illegal and to enter injunctive relief to prevent 
further injury to consumers of chiropractic services.

II. Defendant

    5. CASD is a company organized and doing business under the laws of 
the State of South Dakota, with its principal place of business in 
Brookings.

III. Jurisdiction, Venue, and Interstate Commerce

    6. Plaintiff brings this action pursuant to Section 4 of the 
Sherman Act, 15 U.S.C. Sec.  4, to obtain equitable and other relief to 
prevent and restrain the Defendant's violations of Section 1 of the 
Sherman Act, 15 U.S.C. 1.
    7. The Court has subject-matter jurisdiction over this action under 
Section 4 of the Sherman Act, 15 U.S.C. 4, and 28 U.S.C. 1331, 1337(a), 
and 1345.
    8. The Defendant has consented to personal jurisdiction and venue 
in this District. The Court also has personal jurisdiction over the 
Defendant, and venue is proper in the District of South Dakota under 
Section 12 of the Clayton Act, 15 U.S.C. 22, and 28 U.S.C. 1391(b), 
because the Defendant is found, has transacted business, and committed 
acts in furtherance of the alleged violations in this District. A 
substantial part of the events giving rise to Plaintiff's claims 
occurred in this District.
    9. The Defendant engages in interstate commerce, and its 
activities--including the conduct alleged in this Complaint--
substantially affect interstate commerce. The Defendant's conduct 
increased prices for chiropractic services that some non-South Dakota 
residents traveled to South Dakota to purchase, and for which a number 
of payers paid across state lines.

IV. Other Conspirators

    10. Various persons not named as defendants in this action have 
participated as conspirators with the Defendant in the offenses alleged 
and have performed acts and made statements in furtherance of the 
alleged conspiracies.

V. Defendant's Illegal Conduct

    11. Since 1997, CASD has required that chiropractors joining the 
association enter into a membership agreement (called a ``Provider 
Agreement'') that authorizes CASD to negotiate the fees that CASD's 
chiropractors charge payers for health-care related services and 
products.
    12. For years, CASD has had a stated goal of leveraging its 
contracts with a large share of South Dakota chiropractors to negotiate 
higher fees from payers for chiropractor members. One CASD official 
stated that ``the first thing that we felt was very important to us was 
to establish a fair reimbursement for a full scope of practice.'' Thus, 
CASD sought to ``[h]ave a membership large enough to negotiate fair and 
equitable contracts with insurance companies, including Fair Fee 
Schedules (minimum of 130% of Medicare)[.]''
    13. Since 1997, CASD has negotiated at least seven contracts with 
payers that fix the prices and other price-related terms for all CASD 
members dealing with those payers. In these negotiations, CASD, acting 
on behalf of its members, made proposals and counterproposals on price 
and price-related terms, accepted and rejected offers, and

[[Page 22902]]

entered into payer contracts that contractually bound all of CASD's 
members.
    14. CASD's practice of negotiating contracts on behalf of its 
members has increased prices for chiropractic services in South Dakota.

VI. No Integration

    15. CASD's negotiation of contracts on behalf of its members is not 
ancillary to any procompetitive purpose of CASD or reasonably necessary 
to achieve any efficiencies. Other than CASD members who are part of 
the same practice groups, CASD members do not share any financial risk 
in providing chiropractic services, do not significantly collaborate in 
a program to monitor and modify their clinical practice patterns to 
control costs or ensure quality, do not integrate their delivery of 
care to patients, and do not otherwise integrate their activities to 
produce significant efficiencies.

VII. Violation Alleged

    16. Plaintiff reiterates the allegations contained in paragraphs 1 
to 15. Beginning at least as early as 1997, and continuing to date, 
CASD and its members 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. The combination and 
conspiracy consisted of an understanding and concert of action among 
CASD and its members that CASD would coordinate their negotiations with 
payers to enable the collective negotiation of higher fees from these 
payers. CASD's actions raised prices for the sale of chiropractic 
services and decreased the availability of chiropractic services.

VIII. Request for Relief

    17. To remedy these illegal acts, the United States of America asks 
that the Court:
    (a) adjudge and decree that the Defendant entered into unlawful 
contracts, combinations, or conspiracies 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; its successors, assigns, subsidiaries, 
divisions, groups, partnerships, joint ventures, and each entity over 
which it has control; their directors, officers, managers, agents, 
representatives, and employees; and all other persons acting or 
claiming to act in active concert or participation with one or more of 
them, from:
    i. continuing, maintaining, or renewing in any manner, directly or 
indirectly, the conduct alleged herein or from engaging in any other 
conduct, combination, conspiracy, agreement, 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 chiropractic services, or collective negotiation on behalf of 
competing independent chiropractors or chiropractor groups; and
    ii. directly or indirectly communicating with any chiropractor or 
payer about any actual or proposed payer contract;
    (c) award the United States its costs in this action; and
    (d) award such other and further relief, including equitable 
monetary relief, as may be appropriate and the Court deems just and 
proper.

DATE: April , 2013
FOR PLAINTIFF
UNITED STATES OF AMERICA:
/s/
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WILLIAM J. BAER
Assistant Attorney General
Antitrust Division
/s/
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LESLIE C. OVERTON
Deputy Assistant Attorney General
Antitrust Division
/s/
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PATRICIA A. BRINK
Director of Civil Enforcement
Antitrust Division
/s/
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PETER J. MUCCHETTI
Chief, Litigation I Section
Antitrust Division
/s/
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RYAN M. KANTOR
Assistant Chief, Litigation I Section
Antitrust Division
/s/
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BRENDAN JOHNSON
United States Attorney
/s/
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CHERYL SCHREMPP DUPRIS
Assistant United States Attorney
P.O. Box 7240
225 S. Pierre Street, Suite 337
Pierre, S.D. 57501
(605) 224-1256 ext 2204
Cheryl.Dupris@usdoj.gov
/s/
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RICHARD D. MOSIER
JULIE A. TENNEY
KEVIN YEH
Attorneys for the United States
Antitrust Division
United States Department of Justice
450 Fifth Street, NW., Suite 4100
Washington, DC 20530
Telephone: (202) 307-0585
Facsimile: (202) 307-5802
Email: Richard.Mosier@usdoj.gov

Competitive Impact Statement

    Plaintiff United States of America, pursuant to Section 2(b) of the 
Antitrust Procedures and Penalties Act (``APPA'' or ``Tunney Act''), 15 
U.S.C. 16(b)-(h), files this Competitive Impact Statement relating to 
the proposed Final Judgment submitted for entry in this civil antitrust 
proceeding.

I. Nature and Purpose of the Proceeding

    The United States has filed a civil antitrust Complaint, alleging 
that Chiropractic Associates, Ltd. of South Dakota (``CASD'') violated 
Section 1 of the Sherman Act, 15 U.S.C. 1. CASD negotiated at least 
seven contracts with payers \1\ that set prices for chiropractic 
services on behalf of CASD's members. This conduct caused consumers to 
pay higher fees for chiropractic services.
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    \1\ A ``payer'' is a person or entity 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.
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    At the same time the United States filed the Complaint, the United 
States filed a Stipulation and proposed Final Judgment, which are 
designed to eliminate the anticompetitive effects of CASD's conduct. 
Under the proposed Final Judgment, which is explained more fully below, 
CASD is enjoined from contracting with payers on behalf of 
chiropractors and from facilitating joint contracting among 
chiropractors.
    The United States and CASD have stipulated that the proposed Final 
Judgment may be entered after compliance with the APPA, unless the 
United States withdraws its consent. Entry of the proposed Final 
Judgment would terminate this action, except that the Court would 
retain jurisdiction to construe, modify, or enforce the provisions of 
the Final Judgment and to punish violations thereof.

II. Description of Events Giving Rise to the Alleged Violation of 
Antitrust Laws

A. The Defendant
    CASD is an association of approximately 300 chiropractors, many of 
whom compete with each other in the sale of chiropractic services. 
CASD's members comprise over 80 percent of all

[[Page 22903]]

chiropractors practicing in South Dakota.

B. The Alleged Violations

    CASD negotiated contracts with payers on behalf of competing 
chiropractors with the purpose and effect of increasing fees paid to 
CASD and its members. This conduct raised prices to consumers of 
chiropractic services. One CASD official stated that ``the first thing 
that we felt was very important to us was to establish a fair 
reimbursement for a full scope of practice.'' Thus, CASD sought to 
``[h]ave a membership large enough to negotiate fair and equitable 
contracts with insurance companies, including Fair Fee Schedules 
(minimum of 130% of Medicare)[.]''
    Since 1997, CASD has negotiated at least seven contracts with 
payers that set the prices and other terms for all of CASD's members 
dealing with those payers. In these negotiations, CASD made proposals 
and counterproposals to payers, and accepted and rejected offers, 
without consulting CASD's physician members regarding the prices that 
they would accept. Additionally, CASD entered into contracts with 
payers on behalf of all members.
    CASD requires that each chiropractor joining the association enter 
into a membership agreement (called a ``Provider Agreement'') that 
authorizes CASD to negotiate the fees that CASD's chiropractors charge 
payers for health-care related services and products. Upon joining 
CASD, therefore, a chiropractor explicitly gives contracting authority 
to CASD and charges the price that CASD sets in its contracts with 
payers. CASD's practice of negotiating contracts on behalf of its 
members increased prices for chiropractic services in South Dakota.
    Antitrust law treats naked agreements among competitors that set 
prices as per se illegal.\2\ Where competitors economically integrate 
in a joint venture, however, such agreements, if reasonably necessary 
to accomplish the procompetitive benefits of the integration, are 
analyzed under the rule of reason.\3\ CASD's negotiation of contracts 
on behalf of its members was not ancillary to any procompetitive 
purpose of CASD or reasonably necessary to achieve any efficiencies. 
Other than CASD members who are part of the same practice groups, CASD 
members do not share any financial risk in providing chiropractic 
services, do not significantly collaborate in a program to monitor and 
modify their clinical practice patterns to control costs or ensure 
quality, do not integrate their delivery of care to patients, and do 
not otherwise integrate their activities to produce significant 
efficiencies.
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    \2\ See Statement 8(B)(1) of the 1996 Statements of Antitrust 
Enforcement Policy in Health Care available at https://www.justice.gov/atr/public/guidelines/1791.htm.
    \3\ Id. (further explaining that ``In accord with general 
antitrust principles, physician network joint ventures will be 
analyzed under the rule of reason, and will not be viewed as per se 
illegal, if the physicians' integration through the network is 
likely to produce significant efficiencies that benefit consumers, 
and any price agreements (or other agreements that would otherwise 
be per se illegal) by the network physicians are reasonably 
necessary to realize those efficiencies.'')
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III. Explanation of the Proposed Final Judgment

    The proposed Final Judgment will prevent the recurrence of the 
violations alleged in the Complaint and restore competition in the sale 
of chiropractic services in South Dakota. Section IV of the proposed 
Final Judgment would enjoin CASD from:
    (A) providing, or attempting to provide, any services to any 
physician regarding such physician's actual, possible, or contemplated 
negotiation or contracting with any payer, 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);
    (C) communicating, reviewing, or analyzing, or attempting to 
communicate, review, or analyze with or for any physician, except as 
otherwise allowed, about (1) that physician's, or any other 
physician's, negotiating, contracting, or participating status with any 
payer; (2) that physician's, or any other physician's, fees or 
reimbursement rates; or (3) any proposed or actual contract or contract 
term between any physician and any payer;
    (D) facilitating communication or attempting to facilitate 
communication, among or between physicians, regarding any proposed, 
contemplated, or actual contract or contractual term with any payer, 
including the acceptability of any proposed, contemplated, or actual 
contractual term, between such physicians and any payer;
    (E) entering into or enforcing any agreement, arrangement, 
understanding, plan, program, combination, or conspiracy with any 
payers or physicians to raise, stabilize, fix, set, or coordinate 
prices for physician services, or fixing, setting, or coordinating any 
term or condition relating to the provision of physician services;
    (F) requiring that CASD physician members negotiate with any payer 
through CASD or otherwise restricting, influencing, or attempting to 
influence in any way how CASD physician members negotiate with payers;
    (G) coordinating or communicating, or attempting to coordinate or 
communicate, with any physician, about any refusal to contract, 
threatened refusal to contract, recommendation not to participate or 
contract with any payer, or recommendation to boycott, on any proposed 
or actual contract or contract term between such physician and any 
payer;
    (H) responding, or attempting to respond, to any question or 
request initiated by any payer or physician relating to (1) a 
physician's negotiating, contracting, or participating status with any 
payer; (2) a physician's fees or reimbursement rates; or (3) any 
proposed or actual contract or contract term between any physician and 
any payer, except to refer a payer to a third-party messenger \4\ and 
otherwise to state that the Final Judgment prohibits any additional 
response; and
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    \4\ A messenger is a person or entity that operates a messenger 
model, which is an arrangement designed to minimize the costs 
associated with the contracting process between payers and health-
care providers. Messenger models can operate in a variety of ways. 
For example, network providers may use an agent or third party to 
convey to purchasers information obtained individually from 
providers about the prices or price-related terms that the providers 
are willing to accept. In some cases, the agent may convey to the 
providers all contract offers made by purchasers, and each provider 
then makes an independent, unilateral decision to accept or reject 
the contract offers. See Statement 9(C) of the 1996 Statements of 
Antitrust Enforcement Policy in Health Care, available at https://www.justice.gov/atr/public/guidelines/1791.htm.
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    (I) training or educating, or attempting to train or educate, any 
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 CASD may, provided it does not violate other prohibitions 
of the 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; (2) publish articles on general topics (including 
contracting) in a regularly disseminated newsletter; and (3) provide 
education to physicians regarding the regulatory structure (including 
legislative developments) of workers' compensation, Medicaid, and 
Medicare, except Medicare Advantage.
    But the Final Judgment does not enjoin CASD from providing

[[Page 22904]]

credentialing services \5\ and utilization review services.\6\ 
Credentialing services can provide an efficient and cost-effective way 
to ensure that physicians are qualified, competent, and properly 
licensed. Utilization review services can provide a mechanism to 
monitor and control utilization of health care services, control costs, 
and assure quality of care. Consequently, the provision of these 
services could potentially benefit consumers.
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    \5\ The proposed Final Judgment defines ``credentialing 
services'' to mean a service that recognizes and attests that a 
physician is both qualified and competent, and that verifies that a 
physician meets standards as determined by an organization by 
reviewing such items as the individual's license, experience, 
certification, education, training, malpractice and adverse clinical 
occurrences, clinical judgment, and character by investigation and 
observation.
    \6\ The proposed Final Judgment defines ``utilization review 
services'' to mean a service that CASD provides to a Payer that 
establishes mechanisms to monitor and control utilization of health 
care services and that is designed to control costs and assure 
quality of care by monitoring over-utilization of health care 
services, provided that such mechanisms are not used or designed to 
increase costs or utilization of health care services.
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    With limited exceptions, Section V of the proposed Final Judgment 
requires CASD to terminate all payer contracts at the earlier of (1) 
CASD's receipt of a payer's written request to terminate its contract, 
(2) the earliest termination date, renewal date (including automatic 
renewal date), or the anniversary date of such payer contract, or (3) 
three months from the date the Final Judgment is entered. Furthermore, 
the Final Judgment immediately makes void any clause in a provider 
agreement that disallows a physician from contracting individually with 
a Payer.
    Section VI of the proposed Final Judgment permits CASD to 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. (CC) ] 13,153. Moreover, nothing in the proposed Final 
Judgment prohibits CASD or its members from advocating or discussing, 
in accordance with the doctrine established in Eastern Railroad 
Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127 (1961) 
and its progeny, legislative, judicial, or regulatory actions, or other 
governmental policies or actions.
    To promote compliance with the decree, Section VII of the proposed 
Final Judgment requires that CASD provide to its members, directors, 
officers, managers, agents, employees, and representatives, who provide 
or have provided, or supervise or have supervised the provision of 
services to physicians, copies of the Final Judgment and this 
Competitive Impact Statement and to institute mechanisms to facilitate 
compliance. For a period of ten years following the date of entry of 
the Final Judgment, CASD must certify annually to the United States 
whether it has complied with the provisions of the Final Judgment.

IV. Remedies Available to Potential Private Litigants

    Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any 
person who has been injured as a result of conduct prohibited by the 
antitrust laws may bring suit in federal court to recover three times 
the damages the person has suffered, as well as costs and reasonable 
attorneys' fees. Entry of the proposed Final Judgment will neither 
impair nor assist the bringing of any private antitrust damage action. 
Under the provisions of Section 5(a) of the Clayton Act, 15 U.S.C. 
16(a), the proposed Final Judgment has no prima facie effect in any 
subsequent private lawsuit that may be brought against CASD.

V. Procedures Available for Modification of the Proposed Final Judgment

    The United States and CASD have stipulated that the proposed Final 
Judgment may be entered by the Court after compliance with the 
provisions of the APPA, provided that the United States has not 
withdrawn its consent. The APPA conditions entry upon the Court's 
determination that the proposed Final Judgment is in the public 
interest.
    The APPA provides a period of at least sixty days preceding the 
effective date of the proposed Final Judgment within which any person 
may submit to the United States written comments regarding the proposed 
Final Judgment. Any person who wishes to comment should do so within 
sixty days of the date of publication of this Competitive Impact 
Statement in the Federal Register, or the last date of publication in a 
newspaper of the summary of this Competitive Impact Statement, 
whichever is later. All comments received during this period will be 
considered by the United States Department of Justice, which remains 
free to withdraw its consent to the proposed Final Judgment at any time 
before the Court's entry of judgment. The comments and the response of 
the United States will be filed with the Court. In addition, comments 
will be posted on the U.S. Department of Justice, Antitrust Division's 
internet Web site, and, under certain circumstances, published in the 
Federal Register. Written comments should be submitted to: Peter J. 
Mucchetti, Chief, Litigation I Section, Antitrust Division, United 
States Department of Justice, 450 Fifth Street NW., Suite 4100, 
Washington, DC 20530.
    The proposed Final Judgment provides that the Court retains 
jurisdiction over this action, and the parties may apply to the Court 
for any order necessary or appropriate for the modification, 
interpretation, or enforcement of the Final Judgment.

VI. Alternatives to the Proposed Final Judgment

    The United States considered, as an alternative to the proposed 
Final Judgment, a full trial on the merits against CASD. The United 
States is satisfied, however, that the relief in the proposed Final 
Judgment will prevent the recurrence of violations alleged in the 
Complaint and preserve competition for payers and consumers of 
chiropractic services in South Dakota. Thus, the proposed Final 
Judgment would achieve all or substantially all of the relief that the 
United States would have obtained through litigation, while avoiding 
the time, expense, and uncertainty of a full trial on the merits of the 
Complaint.

VII. Standard of Review Under the APPA for the Proposed Final Judgment

    The Clayton Act, as amended by the APPA, requires that proposed 
consent judgments in antitrust cases brought by the United States be 
subject to a sixty-day comment period, after which the court shall 
determine whether entry of the proposed Final Judgment ``is in the 
public interest.'' 15 U.S.C. 16(e)(1). In making that determination, 
the court, in accordance with the statute as amended in 2004, is 
required to consider:

    (A) the competitive impact of such judgment, including 
termination of alleged violations, provisions for enforcement and 
modification, duration of relief sought, anticipated effects of 
alternative remedies actually considered, whether its terms are 
ambiguous, and any other competitive considerations bearing upon the 
adequacy of such judgment that the court deems necessary to a 
determination of whether the consent judgment is in the public 
interest; and
    (B) the impact of entry of such judgment upon competition in the 
relevant market or markets, upon the public generally and 
individuals alleging specific injury from the violations set forth 
in the complaint including consideration of the public benefit, if 
any, to be derived from a determination of the issues at trial.

15 U.S.C. 16(e)(1)(A) & (B). In considering these statutory factors, 
the court's inquiry is necessarily a limited one as the government is 
entitled to ``broad discretion to settle with the

[[Page 22905]]

defendant within the reaches of the public interest.'' United States v. 
Microsoft Corp., 56 F.3d 1448, 1461 (D.C. Cir. 1995); see generally 
United States v. SBC Commc'ns, Inc., 489 F. Supp. 2d 1 (D.D.C. 2007) 
(assessing public-interest standard under the Tunney Act); United 
States v. InBev N.V./S.A., 2009-2 Trade Cas. (CCH) ] 76,736, 2009 U.S. 
Dist. LEXIS 84787, No. 08-1965 (JR), at *3 (D.D.C. Aug. 11, 2009) 
(noting that the court's review of a consent judgment is limited and 
only inquires ``into whether the government's determination that the 
proposed remedies will cure the antitrust violations alleged in the 
complaint was reasonable, and whether the mechanisms to enforce the 
final judgment are clear and manageable.'').\7\
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    \7\ The 2004 amendments substituted ``shall'' for ``may'' in 
directing relevant factors for courts to consider and amended the 
list of factors to focus on competitive considerations and to 
address potentially ambiguous judgment terms. Compare 15 U.S.C. 
16(e) (2004), with 15 U.S.C. 16(e)(1) (2006); see also SBC Commc'ns, 
489 F. Supp. 2d at 11 (concluding that the 2004 amendments 
``effected minimal changes'' to Tunney Act review).
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    As the United States Court of Appeals for the District of Columbia 
Circuit has held, a court considers under the APPA, among other things, 
the relationship between the remedy secured and the specific 
allegations set forth in the United States' complaint, whether the 
decree is sufficiently clear, whether enforcement mechanisms are 
sufficient, and whether the decree may positively harm third parties. 
See Microsoft, 56 F.3d at 1458-62. With respect to the adequacy of the 
relief secured by the decree, a court may not ``engage in an 
unrestricted evaluation of what relief would best serve the public.'' 
United States v. BNS Inc., 858 F.2d 456, 462 (9th Cir. 1988) (citing 
United States v. Bechtel Corp., 648 F.2d 660, 666 (9th Cir. 1981)); see 
also Microsoft, 56 F.3d at 1460-62; InBev, 2009 U.S. Dist. LEXIS 84787, 
at *3; United States v. Alcoa, Inc., 152 F. Supp. 2d 37, 40 (D.D.C. 
2001). Courts have held that:

[t]he balancing of competing social and political interests affected 
by a proposed antitrust consent decree must be left, in the first 
instance, to the discretion of the Attorney General. The court's 
role in protecting the public interest is one of insuring that the 
government has not breached its duty to the public in consenting to 
the decree. The court is required to determine not whether a 
particular decree is the one that will best serve society, but 
whether the settlement is ``within the reaches of the public 
interest.'' More elaborate requirements might undermine the 
effectiveness of antitrust enforcement by consent decree.

Bechtel, 648 F.2d at 666 (emphasis added) (citations omitted).\8\ In 
determining whether a proposed settlement is in the public interest, a 
district court ``must accord deference to the government's predictions 
about the efficacy of its remedies, and may not require that the 
remedies perfectly match the alleged violations.'' SBC Commc'ns, 489 F. 
Supp. 2d at 17; see also Microsoft, 56 F.3d at 1461 (noting the need 
for courts to be ``deferential to the government's predictions as to 
the effect of the proposed remedies''); United States v. Archer-
Daniels-Midland Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) (noting that 
the court should grant due respect to the United States' ``prediction 
as to the effect of proposed remedies, its perception of the market 
structure, and its views of the nature of the case'').
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    \8\ Cf. BNS, 858 F.2d at 464 (holding that the court's 
``ultimate authority under the [APPA] is limited to approving or 
disapproving the consent decree''); United States v. Gillette Co., 
406 F. Supp. 713, 716 (D. Mass. 1975) (noting that, in this way, the 
court is constrained to ``look at the overall picture not 
hypercritically, nor with a microscope, but with an artist's 
reducing glass''); see generally Microsoft, 56 F.3d at 1461 
(discussing whether ``the remedies [obtained in the decree are] so 
inconsonant with the allegations charged as to fall outside of the 
`reaches of the public interest' '').
---------------------------------------------------------------------------

    Courts have greater flexibility in approving proposed consent 
decrees than in crafting their own decrees following a finding of 
liability in a litigated matter. ``[A] proposed decree must be approved 
even if it falls short of the remedy the court would impose on its own, 
as long as it falls within the range of acceptability or is `within the 
reaches of public interest.' '' United States v. Am. Tel. & Tel. Co., 
552 F. Supp. 131, 151 (D.D.C. 1982) (citations omitted) (quoting United 
States v. Gillette Co., 406 F. Supp. 713, 716 (D. Mass. 1975)), aff'd 
sub nom. Maryland v. United States, 460 U.S. 1001 (1983); see also 
United States v. Alcan Alum. Ltd., 605 F. Supp. 619, 622 (W.D. Ky. 
1985) (approving the consent decree even though the court would have 
imposed a greater remedy). To meet this standard, the United States 
``need only provide a factual basis for concluding that the settlements 
are reasonably adequate remedies for the alleged harms.'' SBC Commc'ns, 
489 F. Supp. 2d at 17.
    Moreover, the court's role under the APPA is limited to reviewing 
the remedy in relationship to the violations that the United States has 
alleged in its complaint, and does not authorize the court to 
``construct [its] own hypothetical case and then evaluate the decree 
against that case.'' Microsoft, 56 F.3d at 1459; see also InBev, 2009 
U.S. Dist. LEXIS 84787, at *20 (``the `public interest' is not to be 
measured by comparing the violations alleged in the complaint against 
those the court believes could have, or even should have, been 
alleged''). Because the ``court's authority to review the decree 
depends entirely on the government's exercising its prosecutorial 
discretion by bringing a case in the first place,'' it follows that 
``the court is only authorized to review the decree itself,'' and not 
to ``effectively redraft the complaint'' to inquire into other matters 
that the United States did not pursue. Microsoft, 56 F.3d at 1459-60. 
As the United States District Court for the District of Columbia 
confirmed in SBC Communications, courts ``cannot look beyond the 
complaint in making the public interest determination unless the 
complaint is drafted so narrowly as to make a mockery of judicial 
power.'' SBC Commc'ns, 489 F. Supp. 2d at 15.
    In its 2004 amendments, Congress made clear its intent to preserve 
the practical benefits of using consent decrees in antitrust 
enforcement, adding the unambiguous instruction that ``[n]othing in 
this section shall be construed to require the court to conduct an 
evidentiary hearing or to require the court to permit anyone to 
intervene.'' 15 U.S.C. 16(e)(2). This language effectuates what 
Congress intended when it enacted the Tunney Act in 1974. As Senator 
Tunney explained: ``[t]he court is nowhere compelled to go to trial or 
to engage in extended proceedings which might have the effect of 
vitiating the benefits of prompt and less costly settlement through the 
consent decree process.'' 119 Cong. Rec. 24,598 (1973) (statement of 
Senator Tunney). Rather, the procedure for the public-interest 
determination is left to the discretion of the court, with the 
recognition that the court's ``scope of review remains sharply 
proscribed by precedent and the nature of Tunney Act proceedings.'' SBC 
Commc'ns, 489 F. Supp. 2d at 11.\9\
---------------------------------------------------------------------------

    \9\ See United States v. Enova Corp., 107 F. Supp. 2d 10, 17 
(D.D.C. 2000) (noting that the ``Tunney Act expressly allows the 
court to make its public interest determination on the basis of the 
competitive impact statement and response to comments alone''); 
United States v. Mid-Am. Dairymen, Inc., 1977-1 Trade Cas. (CCH) ] 
61,508, at 71,980 (W.D. Mo. 1977) (``Absent a showing of corrupt 
failure of the government to discharge its duty, the Court, in 
making its public interest finding, should * * * carefully consider 
the explanations of the government in the competitive impact 
statement and its responses to comments in order to determine 
whether those explanations are reasonable under the 
circumstances.''); S. Rep. No. 93-298 at 6 (1973) (``Where the 
public interest can be meaningfully evaluated simply on the basis of 
briefs and oral arguments, that is the approach that should be 
utilized.'').

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[[Page 22906]]

VIII. Determinative Documents

    There are no determinative materials or documents within the 
meaning of the APPA that were considered by the United States in 
formulating the proposed Final Judgment.

    Dated: April ----, 2013.

Respectfully submitted,

-----------------------------------------------------------------------
Richard Mosier
(D.C. Bar No. 492489),
Attorney for the United States, Litigation I Section, Antitrust 
Division, United States Department of Justice,
450 Fifth Street NW., Suite 4100,
Washington, DC 20530,
Telephone: (202) 307-0585,
Facsimile: (202) 307-5802,
Email: Richard.Mosier@usdoj.gov.

EXHIBIT A

Final Judgment

    Whereas, Plaintiff, the United States of America, filed its 
Complaint on April----, 2013, alleging that Defendant, Chiropractic 
Associates, Ltd. of South Dakota, engaged in conduct in violation of 
Section 1 of the Sherman Act, as amended, 15 U.S.C. 1, and Plaintiff 
and Defendant have consented to the entry of this Final Judgment 
without trial or adjudication of any issue of fact or law;
    And whereas, this Final Judgment does not constitute any 
admission by Defendant that the law has been violated or of any 
issue of fact or law, other than an admission that the 
jurisdictional facts alleged in the Complaint are true;
    And Whereas, the essence of this Final Judgment is to restore 
competition, as alleged in the Complaint, and to restrain Defendant 
from participating in any unlawful conspiracy to increase fees for 
Physician services;
    And Whereas, the United States requires Defendant to be enjoined 
from rendering services to, or representing, any Physician 
pertaining to such Physician's dealing with any Payer, for the 
purpose of preventing future violations of Section 1 of the Sherman 
Act;
    And Whereas, Defendant agrees to be bound by the provisions of 
this Final Judgment pending its approval by the Court;
    And Whereas, Plaintiff requires Defendant to agree to undertake 
certain actions and refrain from certain conduct for the purpose of 
remedying the loss of competition alleged in the Complaint.
    And Whereas, Defendant has represented to the United States that 
the actions and conduct restrictions can and will be undertaken and 
that it will later raise no claim of hardship or difficulty as 
grounds for asking the Court to modify any of the provisions 
contained below;
    Now Therefore, before any testimony is taken, without trial or 
adjudication of any issue of law or fact, and upon consent of 
Plaintiff and Defendant, it is ordered, adjudged, and decreed:

I. Jurisdiction

    This Court has jurisdiction over the subject matter of, and each 
of the parties to, this action. The Complaint states a claim upon 
which relief may be granted against Defendant under Section 1 of the 
Sherman Act, as amended, 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, directly or indirectly, in any manner;
    (B) ``Credentialing Services'' means a service that recognizes 
and attests that a physician is both qualified and competent, and 
that verifies that a physician meets standards as determined by an 
organization by reviewing such items as the individual's license, 
experience, certification, education, training, malpractice and 
adverse clinical occurrences, clinical judgment, and character by 
investigation and observation;
    (C) ``Defendant'' or ``CASD'' means the Chiropractic Associates, 
Ltd. of South Dakota, a company organized and doing business under 
the laws of South Dakota; its successors, assigns, subsidiaries, 
divisions, groups, partnerships, joint ventures, and each entity 
over which it has control, including Chiropractic Associates of 
North Dakota, LLC, Chiropractic Associates of Minnesota, LLC, 
Chiropractic Associates of Iowa, LLC; and their directors, officers, 
managers, agents, representatives, and employees;
    (D) ``Messenger'' means the Defendant when it Communicates to a 
Payer any information Defendant has received from a Physician, or 
Communicates to any Physician any information Defendant receives 
from any Payer;
    (E) ``Participating Provider Agreement'' means a contract 
entered into by a Physician with CASD that allows the Physician to 
participate in a Payer Contract;
    (F) ``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;
    (G) ``Payer Contract'' means a contract entered into by a Payer 
with CASD that sets the prices and price-related terms between 
CASD's Physician members and the Payer;
    (H) ``Person'' means any natural person, corporation, firm, 
company, sole proprietorship, partnership, joint venture, 
association, institute, governmental unit, or other legal entity;
    (I) ``Physician'' means a doctor of chiropractic medicine (DC), 
a doctor of allopathic medicine (M.D.), or any other practitioner of 
chiropractic, allopathic, or other medicine;
    (J) ``Third-Party Messenger'' means a Person other than 
Defendant that uses a ``messenger model'' as set forth in Statement 
9(C) of the 1996 Statements of Antitrust Enforcement Policy in 
Health Care, 4 Trade Reg. Rep (CC) ] 13,153, provided that the 
messenger model does not create or facilitate an agreement among 
competitors on prices or price-related terms;
    (K) ``Utilization Review Services'' means a service that 
Defendant provides to a Payer that establishes mechanisms to monitor 
and control utilization of health care services and that is designed 
to control costs and assure quality of care by monitoring over-
utilization of health care services, provided that such mechanisms 
are not used or designed to increase costs or utilization of health 
care services.

III. Applicability

    This Final Judgment applies to Defendant and to any Person, 
including any Physician, in active concert or participation with 
Defendant, who receives actual notice of this Final Judgment by 
personal service or otherwise.

IV. Prohibited Conduct

    Defendant is enjoined from, in any manner, directly or 
indirectly:
    (A) Providing, or attempting to provide, any services to any 
Physician regarding such Physician's actual, possible, or 
contemplated negotiation or contracting with any Payer, 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 Physician with any Payer;
    (C) Communicating, reviewing, or analyzing, or attempting to 
Communicate, review, or analyze with or for any Physician, except as 
consistent with Section VI(A), about (1) that Physician's, or any 
other Physician's, negotiating, contracting, or participating status 
with any Payer; (2) that Physician's, or any other Physician's, fees 
or reimbursement rates; or (3) any proposed or actual contract or 
contract term between any Physician and any Payer;
    (D) facilitating Communication or attempting to facilitate 
Communication, among or between Physicians, regarding any proposed, 
contemplated, or actual contract or contractual term with any Payer, 
including the acceptability of any proposed, contemplated, or actual 
contractual term, between such Physicians and any Payer;
    (E) entering into or enforcing any agreement, arrangement, 
understanding, plan, program, combination, or conspiracy with any 
Payers or Physicians to raise, stabilize, fix, set, or coordinate 
prices for Physician services, or fixing, setting, or coordinating 
any term or condition relating to the provision of Physician 
services;
    (F) requiring that CASD Physician members negotiate with any 
Payer through CASD or otherwise restricting, influencing, or 
attempting to influence in any way how CASD Physician members 
negotiate with Payers;
    (G) coordinating or Communicating, or attempting to coordinate 
or Communicate, with any Physician, about any refusal to contract, 
threatened refusal to contract, recommendation not to participate or 
contract with any Payer, or recommendation to boycott, on any 
proposed or actual contract or contract term between such Physician 
and any Payer;
    (H) responding, or attempting to respond, to any question or 
request initiated by any Payer or Physician relating to (1) a 
Physician's negotiating, contracting, or

[[Page 22907]]

participating status with any Payer; (2) a Physician's fees or 
reimbursement rates; or (3) any proposed or actual contract or 
contract term between any Physician and any Payer, except to refer a 
Payer to a Third-Party Messenger and otherwise to state that this 
Final Judgment prohibits any additional response; and
    (I) training or educating, or attempting to train or educate, 
any 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 Defendant may, provided it does not 
violate Sections IV(A) through IV(H) 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; 
(2) publish articles on general topics (including contracting) in a 
regularly disseminated newsletter; and (3) provide education to 
physicians regarding the regulatory structure (including legislative 
developments) of workers' compensation, Medicaid, and Medicare, 
except Medicare Advantage.
    Provided however, that Section IV does not enjoin Defendant from 
providing Credentialing Services and Utilization Review Services.

V. Required Conduct

    (A) Defendant must terminate, without penalty or charge, and in 
compliance with any applicable laws, any Payer Contracts at the 
earlier of (1) receipt by Defendant of a Payer's written request to 
terminate such Payer Contract, (2) the earliest termination date, 
renewal date (including automatic renewal date), or the anniversary 
date of such Payer Contract, or (3) three months from the date the 
Final Judgment is entered.
    Provided however, a Payer Contract to be terminated pursuant to 
Section V(A)(2) of this Final Judgment may extend beyond any such 
termination, renewal, or anniversary date, by up to three months 
from the date the Final Judgment is entered, if:
    (a) The Payer submits to Defendant a written request to extend 
such Payer Contract to a specific date no later than three months 
from the date that this Final Judgment is entered; and
    (b) Defendant had determined not to exercise any right to 
terminate.
    Provided further, that any Payer making such request to extend a 
Payer Contract retains the right, pursuant to Section V(A) of this 
Final Judgment, to terminate the Payer Contract at any time.
    (B) Defendant must terminate, without penalty or charge, and in 
compliance with any applicable laws, any Participating Provider 
Agreement and all other contracts relating to Payers with any CASD 
members at the earlier of (1) receipt by Defendant of any Physician 
member's written request to terminate such Participating Provider 
Agreement, (2) the date all Payer Contracts applicable to a 
Physician member are terminated pursuant to Section V(A), or (3) 
three months from the date the Final Judgment is entered. Defendant 
may distribute a revised membership agreement to its Physician 
members that omits any reference to collectively contracting with 
Payers or other services prohibited by Section IV, and that 
otherwise does not violate this Final Judgment.

VI. Permitted Conduct

    (A) Defendant 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. (CC) 
] 13,153.
    (B) Nothing in this Final Judgment shall prohibit Defendant, or 
any one or more of CASD's members, from 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.

VII. Compliance

    To facilitate compliance with this Final Judgment, Defendant 
shall:
    (A) Distribute by first-class mail within 30 days from the entry 
of this Final Judgment a copy of the Final Judgment; the Competitive 
Impact Statement; and a cover letter that is identical in content to 
Exhibit A to:
    (1) All of CASD's directors, officers, managers, agents, 
employees, and representatives, who provide or have provided, or 
supervise or have supervised the provision of, services to 
Physicians; and
    (2) all of CASD's Physician members;
    (B) distribute by first-class mail within 30 days from the entry 
of this Final Judgment a copy of the Final Judgment; the Competitive 
Impact Statement; and a cover letter that is identical in content to 
Exhibit B to the chief executive officer of each Payer with whom 
CASD has contracted since January 1, 2002, regarding contracts for 
the provision of Physician services;
    (C) distribute a copy of this Final Judgment and the Competitive 
Impact Statement to:
    (1) any Person who succeeds to a position with CASD described in 
Section VII(A)(1), in no event shall such distribution occur more 
than 15 days later than such a Person assumes such a position; and
    (2) any Physician who becomes a member of CASD, in no event 
shall such distribution occur more than 15 days later than such 
Physician becomes a member;
    (D) conduct an annual seminar explaining to all of CASD's 
directors, officers, managers, agents, employees, and 
representatives, the restrictions contained in this Final Judgment 
and the implications of violating the Final Judgment;
    (E) maintain an internal mechanism by which questions about the 
application of the antitrust laws and this Final Judgment from any 
of CASD's directors, officers, managers, agents, employees, and 
representatives can be answered by counsel as the need arises;
    (F) within ten days of receiving a Payer's written request to 
terminate a Payer Contract pursuant to Section V(A) of this Final 
Judgment, distribute, by first-class mail, return receipt requested, 
a copy of that request to each Physician in such Payer Contract as 
of the date that CASD receives such request to terminate; and
    (G) maintain for inspection by Plaintiff a record of recipients 
to whom this Final Judgment and Competitive Impact Statement have 
been distributed.

VIII. Certification

    (A) Within 30 days after entry of this Final Judgment, Defendant 
shall certify to the Chief of the Litigation I Section, Antitrust 
Division, United States Department of Justice, that it has provided 
a copy of this Final Judgment to all Persons described in Sections 
VII(A) and VII(B) of this Final Judgment.
    (B) For a period of ten years following the date of entry of 
this Final Judgment, Defendant shall certify to the Chief of the 
Litigation I Section, Antitrust Division, United States Department 
of Justice, annually on the anniversary date of the entry of this 
Final Judgment that each, respectively, and all of CASD's directors, 
officers, managers, agents, employees, and representatives, if 
applicable, have complied with the provisions of this Final 
Judgment.

IX. Compliance Inspection

    (A) For the purposes of determining or securing compliance with 
this Final Judgment or determining whether the Final Judgment should 
be modified or vacated, and subject to any legally recognized 
privilege, authorized representatives of the United States 
Department of Justice, including consultants and other Persons 
retained by the United States, shall, upon written request of an 
authorized representative of the Assistant Attorney General in 
charge of the Antitrust Division, and upon five days notice to 
Defendant, be permitted:
    (1) Access during CASD's regular business hours to inspect and 
copy, or, at the United States' option, to require that Defendant 
provide copies of all books, ledgers, accounts, records and 
documents in its possession, custody, or control, relating to any 
matters contained in this Final Judgment;
    (2) to interview, either informally or on the record, any of 
CASD's officers, directors, employees, agents, managers, and 
representatives, who may have their individual counsel present, 
regarding such matters. The interviews shall be subject to the 
reasonable convenience of the interviewee and without restraint or 
interference by Defendant; and
    (3) to obtain from Defendant written reports or responses to 
written interrogatories, under oath if requested, relating to any 
matters contained in this Final Judgment.
    (B) No information or documents obtained by the means provided 
in this Section shall be divulged by Plaintiff to any Person other 
than authorized representatives of the executive branch of the 
United States, except in the course of legal proceedings to which 
the United States is a party (including grand jury proceedings), or 
for the purpose of securing compliance with this Final Judgment, or 
as otherwise required by law.
    (C) If at any time Defendant furnishes information or documents 
to the United

[[Page 22908]]

States, Defendant represents and identifies in writing the material 
in any such information or documents to which a claim of protection 
may be asserted under Rule 26(c)(1)(G) of the Federal Rules of Civil 
Procedure, and marks each pertinent page of such material, ``Subject 
to claim of protection under Rule 26(c)(1)(G) of the Federal Rules 
of Civil Procedure,'' then the United States shall give Defendant 
ten calendar days' notice prior to divulging such material in any 
legal proceeding (other than a grand jury proceeding) to which such 
Defendant is not a party.

X. Retention of Jurisdiction

    This Court retains jurisdiction to enable any party to this 
Final Judgment to apply to this Court at any time for further orders 
and directions as may be necessary or appropriate to carry out or 
construe this Final Judgment, to modify any of its provisions, to 
enforce compliance, and to punish violations of its provisions.

XI. Expiration of Final Judgment

    Unless this Court grants an extension, this Final Judgment shall 
expire ten years from the date of its entry.

XII. Public Interest Determination

    The parties have complied with the requirements of the Antitrust 
Procedures and Penalties Act, 15 U.S.C. 16, including making copies 
available to the public of this Final Judgment, the Competitive 
Impact Statement, and any comments thereon and the United States' 
responses to comments. Based upon the record before the Court, which 
includes the Competitive Impact Statement and any comments and 
responses to comments filed with the Court, entry of this Final 
Judgment is in the public interest.

Dated:-----------------------------------------------------------------
-----------------------------------------------------------------------
UNITED STATES DISTRICT JUDGE

Exhibit A

[Letterhead of CASD]
[Name and Address of Member]
Dear Member:
    The United States District Court for the District of South 
Dakota has entered a Final Judgment prohibiting the Chiropractic 
Associates, Ltd., of South Dakota (``CASD'') from collectively 
contracting with payers or engaging in other anticompetitive 
activities. A copy of the Final Judgment and a Competitive Impact 
Statement prepared in accordance with the Antitrust Penalties and 
Procedures Act, 15 U.S.C. 16, are enclosed.
    In order that you may readily understand the terms of the Final 
Judgment, we have set forth its essential provisions and describe 
its application to CASD's payer contracting activities, although you 
must realize the Final Judgment is controlling, rather than the 
following explanation of provisions.
    (1) CASD is prohibited from negotiating or contracting with 
payers on behalf of any physician, except to provide credentialing 
and utilization review services.
    (2) CASD is prohibited from reviewing or analyzing any 
contractual terms between a physician and a payer, and is prohibited 
from communicating about a physician's negotiation or contracting 
with any payer.
    (3) CASD is prohibited from engaging in conduct that promotes 
members' collective boycotts or refusals to contract with payers.
    (4) CASD may not require that CASD members negotiate with payers 
through CASD.
    (5) CASD may not respond to any question or request initiated by 
a payer relating to (a) a physician's negotiating, contracting, or 
participating status with any payer; (b) a physician's fees or 
reimbursement rates; or (c) any proposed or actual contract or 
contract term between any physician and any payer, except to refer a 
payer to a third-party messenger and otherwise to state that the 
Final Judgment prohibits any additional response. Provided however, 
that the Final Judgment does not enjoin CASD from providing 
credentialing services and utilization review services.
    (6) All of CASD's contracts with payers currently in effect 
generally must be cancelled upon, whichever comes first, written 
request by a payer to terminate, the termination date, renewal date, 
or anniversary date of such contract, or within three months from 
the date of the entry of the Final Judgment.
    (7) All of CASD's contracts with its members currently in effect 
must be cancelled upon, whichever comes first, written request by a 
member to terminate, when all payer contracts between CASD and a 
payer applicable to that member have been terminated, or within 
three months from the date of the entry of the Final Judgment. 
Provided, however, that nothing shall prohibit CASD and its member 
from entering into new membership agreements that comply with the 
terms of the Final Judgment. CASD will send you under separate cover 
a new membership agreement that complies with the terms of the Final 
Judgment.
    (8) CASD members and its practice groups may immediately 
contract individually with payers.
    If you have any questions, please do not hesitate to contact me.

Sincerely,

[Appropriate CASD representative]

Exhibit B

[Letterhead of CASD]
[Name and Address of Payer's CEO]
Dear [----------]:
    Enclosed is a copy of a Final Judgment, issued by the United 
States District Court for the District of South Dakota, and a 
Competitive Impact Statement, issued in accordance with the 
Antitrust Procedures and Penalties Act, 15 U.S.C. Sec.  16, against 
the Chiropractic Associates, Ltd., of South Dakota.
    Pursuant to Section V Paragraph A of the Final Judgment, all 
payer contracts with CASD will terminate at the earlier of (1) 
receipt by CASD of a payer's written request to terminate such 
contract, (2) the earliest termination date, renewal date (including 
automatic renewal date), or the anniversary date of such contract, 
or (3) three months from the date the Final Judgment is entered. 
CASD members and their practice groups may immediately contract 
individually with payers.
    If your contract expires prior to a date that is three months 
from the date the Final Judgment is entered, you may request an 
extension of the contract to a date no later than three months from 
the date the Final Judgment is entered. If you choose to extend the 
term of the contract to the extent permitted by the Final Judgment, 
you may later terminate the contract at any time.
    Any request to either to terminate or extend the contract should 
be made in writing, and should be sent to me at the following 
address: [address].

Sincerely,

[Appropriate CASD representative]

[FR Doc. 2013-09035 Filed 4-16-13; 8:45 am]
BILLING CODE P