CA medical practice agrees to FTC deal over price-fixing charges

California's Alta Bates Medical Group has agreed to a consent order from the Federal Trade Commission, settling charges that its methods of negotiating with fee-for-service contracts payers for practice members constituted price-fixing.

The 600-physician independent practice association, which is based in the state's East Bay area, was accused of taking too much control of the contracting negotiations for fee-for-service deals between IPA members and health plans. While it's legal for it to relay health plan contract offers and responses between health plans and doctors, Alta Bates was actually setting rates and establishing terms for doctors on its own, without member input, the FTC charged.

One reason the FTC nixed Alta Bates' arrangements was that the IPA wasn't engaging in activities, such as clinically or financially integrating its practices, which would justify collective agreements on the prices its members charged.

In signing the proposed order--which will be valid in 30 days, after a public comment period--the group would be banned from negotiating or refusing to deal with payers on behalf of IPA members. It would also have to let the FTC know when it was going to contact health plans. Meanwhile, health plans would be able to end contracts reached with the IPA since 2001.

To learn more about this agreement:
- read this Modern Healthcare piece (reg. req.)
- read the FTC press release

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