FTC Settles Price-Fixing Charges Against Doctor Groups in Texas and Colorado
The Federal Trade Commission yesterday settled price-fixing allegations against physician groups in Colorado and Texas, part of federal officials' "increased effort" to investigate practices that increase health care costs for patients, the AP/Denver Post reports. According to the FTC, Dallas-based Genesis Physicians Group and eight obstetrics and gynecology doctor groups in Denver broke antitrust law by collectively bargaining to establish fees and contract terms with insurers that "limit[ed] competition and caus[ed] prices to rise for health plans, employers and patients" (Ho, AP/Denver Post, 8/21). The FTC also said the Denver physician groups, which represents about 80 doctors, and their agent Todd Welter, encouraged doctors to limit their agreements with independent practice associations and practice management groups, Reuters/New York Times reports. The Denver settlement bans Welter for three years from negotiating with any payer "on behalf of the doctor groups or advising current or former members of the groups on any agreements" (Reuters/New York Times, 8/21). As part of its settlement, Genesis, which represents 1,250 doctors, said it would cease any "questionable practices" but did not admit any wrongdoing, the Dallas Morning News reports. Genesis' agreement prohibits the IPA from "refusing to deal with any payers" and "communicating with payers the physicians' reaction to reimbursement rates." In addition, the settlement requires Genesis to create a plan that "better defines" its role as a "clinically integrated group" aimed at reducing costs and improving quality.
Genesis' management group CEO Ron Lutz said the settlement would not alter how the IPA operates because it was "already moving toward clinical integration," the Morning News reports. He added, "We decided to go down that path before we knew such a thing would come from the FTC. ... We have collaborated with the FTC from the very beginning and we will continue to do so." An alert about the settlement will appear in the Federal Register and will remain open for public comment for 30 days through Sept. 19, at which time the agency will issue its final ruling, the Morning News reports (Rivera, Dallas Morning News, 8/21). The FTC plans to hold a two-day workshop in September to discuss "how competition laws and policies affect the cost, quality and availability of health care," the AP/Nando Times reports. Jeff Brennan, head of the FTC health care division's competition bureau, said, "We are concerned about the extent to which price increases are the outcome of anti-competitive behavior. When competition is restrained, prices rise and consumers are injured. That's what we're trying to weed out and eradicate" (AP/Nando Times, 8/20). Earlier this year, the FTC settled similar price-fixing charges against two other Denver-area physician groups and a California group (California Healthline, 5/14).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.