Denver doctors settle FTC anti-competitive charges

The physicians' attorneys say clarity is needed on how the third-party messenger model can be used.

By Tanya Albert, AMNews staff. June 3, 2002.

Rather than endure long legal battles, two Denver-area physician groups in May reached agreements with the Federal Trade Commission on allegations that they misused a third-party facilitator system when negotiating contracts with insurers.

The FTC accused Physician Integrated Services of Denver Inc. and Aurora Associated Primary Care Physicians L.L.C. of using methods that restrained competition when a third-party "messenger" was working on contracts on their behalf.

"The conduct challenged here had the purpose and effect of raising prices for physician services, and the physicians were not engaged in any legitimate cooperative activity that could justify agreements on fees," said Joseph Simons, director of the FTC Bureau of Competition.

The two proposed settlements would prohibit the physician groups, their leaders or their agents from jointly negotiating on behalf of doctors. The physicians may participate in certain other arrangements that do not hinder them from contracting individually. The FTC plans a final vote on the agreements after a public comment period ends June 12.

Although only employed physicians are allowed to bargain collectively under federal antitrust laws, other physicians can legally use a "third-party messenger model" outlined in the 1996 Statements of Antitrust Enforcement Policy in Health Care issued jointly by the U.S. Dept. of Justice and the FTC.

The messenger model allows competing physicians to designate an outside individual who can share with health plans information on physician fees or other contract terms doctors are willing to accept. The agent also may convey contract offers to physicians, but doctors must decide individually whether to accept them. The agent cannot divulge competitively sensitive information or recommend that a physician reject or accept a contract. [...]