Healthcare Antitrust Update

November 19, 2004

From McDermott Will Emory law firm: In an initial decision made public November 16, 2004, Administrative Law Judge D. Michael Chappell found North Texas Specialty Physicians (“NTSP”) to be in violation of Section 5 of the FTC Act by illegally engaging in a horizontal price-fixing conspiracy in the market of physician services in the Fort Worth, Texas area. FTC Dkt. No. 9312. Judge Chappell entered an order enjoining NTSP from negotiating non-risk contracts on behalf of its member physicians and requiring NTSP to provide payors with an opportunity to terminate their existing contracts without penalty.

However, NTSP may still enter into qualified risk-sharing or clinically-integrated joint arrangements and messenger objective information about payor offers, including objective comparisons with terms offered by other payors, to its physician members. This case is significant as it is the first fully adjudicated complaint brought by the Federal Trade Commission (“FTC”) against an independent practice association (“IPA”) accused of price-fixing. It is also noteworthy because the court’s remedy was more limited than the relief sought by the FTC, relief that the FTC has aggressively pursued and obtained in recent consent decrees with other IPAs. Neither the FTC or NTSP has indicated whether they intend to appeal the ruling.

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