Antitrust Lawyer Blog Commentary on Current Developments

FTC ADVISES ROCHESTER PHYSICIAN ORGINIZATION IT WILL NOT RECOMMEND ANTITRUST CHALLENGE TO PROPOSAL FOR “CLINICAL INTEGRATION” PROGRAM

On September 21, 2007, Federal Trade Commission advised the Greater Rochester Independent Practice Association, Inc. (GRIPA), that it had no present intention to challenge the organization’s planned conversion to a non-exclusive physician network joint venture. GRIPA requested a staff advisory opinion regarding its proposal to combine and coordinate the provision of medical services to patients.
The proposed program seeks to organize and control the care provided to patients using several mechanisms intended to assure that its physicians use “best practices” and “evidence-based” medicine. Physicians generally will be required to refer patients to physicians within the network to make sure that GRIPA’s treatment standards are met and to better monitor patient treatment. Also, the performance of physicians and the outcomes of their patients will be tracked and measured against established standards in order to improve results and reduce costs.

GRIPA will be a non-exclusive network, which means that its individual physicians will be able to negotiate and contract independently with health plans and other customers who have not subscribed to the network services. The staff letter did not specify what the competitive effects of the proposed program’s operation would be, yet did raise some concerns about the percentages of GRIPA physicians in certain specialties areas. However, the opinion concluded that it was doubtful that GRIPA would be able to apply influence or that the plan would otherwise have any anticompetitive effects in the market for provision of physician services in the greater Rochester area.

The staff opinion letter, dated September 17, 2007, was signed by Markus H. Meier, Assistant Director of the Health Care Services and Products Division of the Federal Trade Commission’s Bureau of Competition. It concluded that the proposed program appeared to involve substantial integration by its physician participants that had the potential to result in the achievement of significant efficiencies that may benefit consumers. The staff concluded that it would not recommend that the Commission challenge the program “unless it became apparent that GRIPA in fact was able to exercise market power or otherwise have an anticompetitive effect in a relevant market.”

Robert Doyle
(202) 589-1834
rdoyle@dbmlawgroup.com