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Judge Rules Texas Physicians Group Participated in Unlawful Price-Fixing

Posted on: Wednesday, 17 November 2004, 03:00 CST

Nov. 17--North Texas Specialty Physicians, a group of about 500 Metroplex doctors, engaged in unlawful price-fixing in its negotiations with various health insurers, according to a judge's ruling released Tuesday.

Administrative Law Judge D. Michael Chappell upheld a complaint filed in September 2003 by the Federal Trade Commission, which accused the doctors group of anti-competitive practices that raised the price of health care in the region.

The Nov. 8 decision prohibits the physicians group from sharing information with its member doctors about their contract terms or from helping them reach agreements among themselves in deals with insurers. And it marks the federal agency's first court victory since it turned its attention about four years ago to "independent practice associations" that negotiate physicians' contracts.

"It's important for consumers, and it's important for competition," said Mitchell Katz, a commission spokesman. "Certainly, competition is going to be improved because the doctors group is not going to be allowed to engage in this collective bargaining."

Individual doctors routinely enter into contracts with insurers, agreeing to accept reduced prices in exchange for access to patients from the health plan's roster.

In its lawsuit, the FTC had argued that the North Texas group collectively negotiated the contracts between its doctors and health insurers and exchanged members' prospective price information in violation of federal law.

The agency also claimed that the group inappropriately polled participating doctors, asking them to disclose the fees they deemed acceptable and then calculating an average of minimum acceptable fees.

Bill Katz, a lawyer for the doctors, said they had given up that practice well before the ruling.

"We haven't done the poll in a couple of years," he said. "There hasn't been a need in the marketplace."

Although the judge's decision favored the commission, the doctors group was highlighting its own legal successes Tuesday.

In a written statement, the group noted that Chappell found no evidence that health plans actually paid its members any more than other doctors or that its doctors ever had consulted with one another about insurers' contract offers.

"The ultimate ruling that there's been a violation of Section 5 doesn't really tell the whole story," Bill Katz said. "There's a lot of stuff going on in this opinion. Focusing only on the ultimate result will overlook a whole lot of other things."

The nonprofit physicians group, which was formed in 1995, includes doctors who practice various specialties, as well as some primary-care physicians. Most are in Tarrant County, although the group also includes doctors from seven other counties.

In recent years, the FTC has targeted more than a dozen doctors groups nationwide with allegations of anti-competitive practices.

The agency reached a settlement in August 2002 with System Health Providers, whose 1,250 physicians practice primarily in eastern Dallas-Fort Worth. In June 2003, Southwest Physician Associates, which represents about 1,000 Metroplex doctors, agreed to settle charges that their collective bargaining had decreased competition.

North Texas Specialty Physicians was the first group to seek a judge's ruling instead of an out-of-court settlement.

"It's the first case of the maybe 15 that we've brought in the last four years that's gone that route," Mitchell Katz said. "It's significant because the FTC won it."

Neither side would say Tuesday whether they plan to appeal any portion of the ruling.

Potential appeals would be heard by the agency's five commissioners but could proceed to a federal appeals court.

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(c) 2004, Fort Worth Star-Telegram, Texas. Distributed by Knight Ridder/Tribune Business News. For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com.

Source: Fort Worth Star-Telegram (Fort Worth, Texas)

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