Colorado IPA prevails in antitrust case

A significant concession by the Federal Trade Commission (FTC) has led to a settlement of its antitrust lawsuit against Mesa County Physicians IPA based in Grand Junction, Colo. The FTC dropped its key demand — that the 190-member IPA reduce its primary care physician membership — and the IPA agreed to a consent order governing its contracting practices.

“It's a victory of sorts,” says Roger Shenkel, MD, an IPA board member and member of the FPM Board of Editors. “The antitrust legislation that the FTC has to enforce is ill-suited to rural communities. In the end, we believe they thought their case was weak, but it cost us a half-million dollars and about two years of leadership time. There has to be a better way to deal with these matters.”

Approximately 85 percent of Mesa County's physicians and 90 percent of its primary care physicians are members of the IPA. At issue was the IPA's relationship with Rocky Mountain HMO, a nonprofit entity founded by the IPA that insures approximately half of Mesa County. Before filing suit in May 1997, the FTC offered a consent decree that would have required the IPA to reduce its primary care physician membership by 70 percent. The IPA board rejected it and denied charges that its members conspired to fix prices and collectively refused to deal with payers who did not meet their demands.

The physicians contended that the utilization review and quality assurance programs they conducted in alliance with Rocky Mountain HMO constituted a form of clinical integration that made their contracting practices legal.

“Ultimately, the FTC recognized that, far from being a sinister conspiracy, the relationship between the IPA and Rocky Mountain HMO had fostered cost-effective, innovative health care,” says attorney Mark Horoschak, Charlotte, N.C., who was retained by the IPA after the suit was filed and negotiated the final consent order, which requires the IPA to disband its contract review committee and not contract collectively on non-risk-sharing agreements.

Panel doesn't endorse patients' rights law

Although the White House has mandated that federal health programs implement the Patients' Bill of Rights proposed by the president's Advisory Commission on Consumer Protection and Quality in the Health Care Industry, that commission has declined to recommend new laws to enforce patients' rights.

At its final meeting in March, the commission called for a “national dialogue” about how to compensate people who are injured because of health care decisions, rather than advocating legislation to enforce the Patients' Bill of Rights. One group of commissioners favored legislation, and another favored a free-market approach to correcting anti-consumer provisions in insurance plans.

Meanwhile, the more than 85 million people enrolled in federal health programs will be covered by the commission's recommendations following a presidential directive in February. Federal health programs must comply with the Patients' Bill of Rights by the end of 1999.

The president's action was partly intended to pressure Congress to enact consumer health care protections. But business and insurance groups argue that imposing the Patients' Bill of Rights would be costly to employers and consumers. “If it could be done in a moment and at no cost, I don't think the president would be giving these agencies two years to do it,” says Bill Gradison, president of the Health Insurance Association of America.