Antitrust

An Antitrust Exemption for Physicians?

March 23, 2015

Major League Baseball has an antitrust exemption. It also has a level playing field. The players, as employees, can collectively bargain.

Health insurers have an antitrust exemption in respect of coordinated gathering of data for ratemaking. The playing field isn’t particularly level. Physicians can’t share pricing information or collectively bargain for payment rates.

So how about an antitrust exemption for physicians?

As it stands now, physicians, outside the confines of an integrated business structure, can’t coordinate their bargaining for reimbursement rates. Dr. Smith, a pediatrician with a practice on Main Street can’t coordinate payor contacting with Dr. Jones, a pediatrician with a practice around the corner on First Avenue.

That’s because federal antitrust laws prevent competitors from fixing prices. The need to comply with that prohibition was one of the major factors in physicians aggregating into financially integrated medical groups in the 1980s in order to jointly contract. By aggregating into one medical group, the entity became one competitor in the market.

But what if completely independent physicians or their entities could band together and negotiate collectively with payors? What if they could share pricing information freely?

A bill introduced in Congress, the Quality Health Care Coalition Act of 2015 (H.R. 105), would permit just that, at least to a certain extent.

The bill exempts physicians and other healthcare professionals, including individuals and entities, from federal and state antitrust laws in connection with health plan contract negotiations. It excludes government healthcare program negotiations. So, for example, independent physicians would still not be able to collectively bargain with Medicare or Medicaid.

Currently, the bill has been referred to the House Judiciary Committee’s Subcommittee on Regulatory Reform, Commercial And Antitrust Law. It has a long way to go before, if ever, it becomes law.

Whatever the bill’s fate, the concepts behind it are interesting. There are practical structures that can be used today to legally circumvent price fixing restrictions though the use of entities that are financially or clinically integrated. Think IPAs for example. However, none of those structures go as far as the complete (well, complete on the private side) exemption that the bill would usher into law.

(My thanks to Laurie Morgan of Capko & Morgan for bringing H.R. 105 to my attention.)

Comment or contact me if you’d like to discuss this post.

Mark F. Weiss

www.weisspc.com

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