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Apr 07

Connecticut Chiropractor Groups and Their Attorney Settle Claims over Boycott of Health Plan

From AHLA (www.healthlawyers.com):

Two Connecticut chiropractic associations and one of their attorneys have settled state and federal antitrust charges that they boycotted a health benefits contractor chosen by health insurance companies. In separate filings on March 5th, the Federal Trade Commission and Connecticut Attorney General Richard Blumenthal charged two chiropractic trade associations—the Connecticut Chiropractic Association (CCA) and the Connecticut Chiropractic Council (CCC)—along with CCA’s attorney, Robert L. Hirtle, with orchestrating an illegal anticompetitive boycott of a Connecticut–based health plan. The defendants have settled all charges.

According to the complaint, Connecticut chiropractors received notice in July 2006 of a proposed contract between Anthem Health Plans Inc. and American Specialty Health Network Inc. (ASH). ASH is a healthcare benefits organization hired by insurance companies nationwide to set fees and handle chiropractic referrals. Under the Anthem/ASH agreement, ASH intended to provide its cost-savings chiropractic benefits administration program to Anthem and other payors, including CIGNA and Empire Blue
Cross Blue Shield. After receiving notice of the proposed agreement between Anthem and ASH, CCA, and CCC invited all Connecticut chiropractors to a meeting where it was acknowledged that the Anthem/ASH plan would result in lower reimbursement rates for chiropractic services. CCA and CCC then openly encouraged the chiropractors at the meeting to opt out of ASH’s proposed network.
There was evidence that the defendants knew and anticipated that their conduct might violate the antitrust laws; attendees of the meeting even discussed potential sanctions the group might face for engaging in such conduct. After the meeting, Hirtle and officials from CCA and CCC facilitated the conspiracy by aggressively urging chiropractors to opt out of the ASH network. Internal emails showed the defendants’ intent to “cripple” the ASH provider list and “get [ASH] out of this state.” Ultimately, the ASH/Anthem plan failed to materialize.

The associations and Hirtle entered into a consent agreement with the FTC, who charged them with unreasonably retraining competition in violation of Section 5 of the FTC Act. The consent agreement prohibits the parties from entering into or facilitating any agreement among chiropractors (1) to negotiate with payors on any chiropractor’s behalf; (2) to deal, not deal, or threaten not to deal with payors; or (3) on what terms to deal with payors. The Commission also explored the possibility of seeking disgorgement from the associations, noting that the defendants’ conduct was particularly egregious. Ultimately, however, the Commission concluded that the facts of the case did not warrant disgorgement, but that such a remedy may be imposed in similar cases in the future. The FTC noted that its consent order is similar to those imposed on other healthcare providers engaged in unlawful refusals to deal with payors, but it noted that the case was unique because an attorney had participated in the anticompetitive conduct.

Under the terms of the settlement with the State of Connecticut, the two chiropractor groups will pay civil penalties totaling $87,000; attorney Hirtle will pay $17,500. Both chiropractic trade groups also agreed not to conspire to refuse to deal or threaten to refuse to deal with any health insurer in the future. Finally, the groups agreed to establish antitrust training and compliance programs which will be mandatory for all members.

The case is particularly newsworthy because of the direct participation of an attorney in the anticompetitive conduct and the civil penalties imposed against him as an individual.

Access copies of the FTC’s complaint and proposed settlement.

Access the Connecticut Attorney General’s complaint and stipulations.

About Reed Tinsley, CPA

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