Two Denver Physician Groups Settle FTC Charges of Price-Fixing

Two Denver physician groups agreed yesterday to settle charges by the Federal Trade Commission that they engaged in anticompetitive behavior by consolidating to put pressure on health insurers to raise reimbursement fees, the Denver Rocky Mountain News reports (Perrault, Denver Rocky Mountain News, 5/14). The settlement is the latest step in the FTC's antitrust crackdown on doctors groups. The commission also has increased its scrutiny of hospital mergers and drug makers' blocking of generic competition (O'Donnell/Appleby, USA Today, 5/14). The FTC said that Physician Integrated Services of Denver and Aurora Associated Primary Care Physicians LLC agreed to settle charges that from 1999 to 2001 they "orchestrated boycotts and agreements among physicians" to establish minimum prices and other terms they would accept from insurers. FTC investigators claimed that the two groups' combined 86 physicians were instructed to "terminate or threaten to terminate individual contracts with health insurers, thus pressuring insurers into offering new contracts with higher fees." According to Joseph Simons, director of the FTC's Bureau of Competition, this activity led to higher costs for patients, employers and health plans (Denver Rocky Mountain News, 5/14). The two groups "were not engaged in any legitimate cooperative activity that could justify agreements on fees," he said (USA Today, 5/14). Under the settlement, in which the doctors groups did not admit liability, Aurora Associated and Physician Integrated must follow several record-keeping and reporting requirements to allow the FTC to monitor compliance, according to Larry Treece, an attorney for Physician Integrated. Physicians in the group cannot exchange information about contracts with insurers, he added (Denver Rocky Mountain News, 5/14). Last month, the FTC settled price-fixing charges with a physician group in Napa County that included nearly every obstetrician and gynecologist at the county's two hospitals (USA Today, 5/14).