FTC lets group continue clinical integration plan

Some attorneys say the case offers insight into acceptable collective bargaining; others warn that physician joint ventures are still under FTC scrutiny.

By Amy Lynn Sorrel, AMNews staff. Feb. 5, 2007.

In what is believed to be the first decision of its kind, the Federal Trade Commission has given the go-ahead for a physician organization investigated for price-fixing to continue joint contracting with insurers on the basis of its clinical integration program.

The move came as a December 2006 consent decree that culminated a four-year government inquiry into the group's practices.

FTC guidelines outline two ways that doctors are permitted to negotiate collectively with insurers: through financial integration with risk-sharing contracts or through clinical integration, aimed at setting uniform quality measures to which doctors must adhere to streamline practices and save money.

Previous FTC settlements essentially required physician networks to shut down all their operations and cease contracting altogether. Among roughly 30 actions brought against physician entities for alleged anticompetitive behavior since 2002, one group was permitted to go back and re-do its clinical integration program so that it could continue joint negotiations with insurers on that basis.

Although the FTC's move is not a major departure from its standards, some legal experts say it opens another window into what the government views as acceptable.

The FTC accused Chicago-area Advocate Health Partners of illegal price-fixing in its negotiations with insurers. The group admits no wrongdoing.

The consent decree prohibits AHP from using the messenger model to facilitate any contract agreements on behalf of its 2,900 physician members. But the significance of the order is that it allows the network to continue its clinical integration program, under which it has been contracting since 2003, according to John P. Marren, an attorney for AHP.