Federal Register / Vol. 69, No. 195 / Friday, October 8, 2004 / Notices 60397

1Commission Rule 4.2(d), 16 CFR 4.2(d). The 

comment must be accompanied by an explicit 

request for confidential treatment, including the 

factual and legal basis for the request, and must 

identify the specific portions of the comment to be 

withheld from the public record. The request will 

be granted or denied by the Commission’s General 

Counsel, consistent with applicable law and the 

public interest. See Commission Rule 4.9(c), 16 CFR 

4.9(c).

contract with Shell for Shell to manage 

the terminal independently from 

Magellan’s other operations. Shell will 

report directly and exclusively to a hold 

separate trustee with respect to the 

operation of the terminal. Shell is 

required to keep confidential business 

information related to the terminal from 

Magellan employees, except as 

permitted by the Hold Separate Order. 

Other paragraphs of the Hold Separate 

Order contain provisions regarding 

compliance reports, notification of 

changes that may affect compliance, and 

access to materials that may be 

necessary to monitor compliance. 

The Hold Separate Order terminates 

on the earlier of two dates, either (1) 

three business days after the 

Commission withdraws its acceptance 

of the consent agreement, or (2) the day 

after the divestiture of the Oklahoma 

City terminal, as described in and 

required by the Proposed Order, is 

completed. 

IV. Opportunity for Public Comment 

By accepting the Agreement, subject 

to final approval, the Commission 

anticipates that the competitive 

problems alleged in the Complaint will 

be resolved. The purpose of this 

analysis is to invite public comment on 

the Agreement, including the proposed 

divestiture, to aid the Commission in its 

determination of whether it should 

make the Agreement final. This analysis 

is not intended to constitute an official 

interpretation of the Agreement or 

modify the terms of the Agreement in 

any way.

By direction of the Commission, Chairman 

Majoras recused. 

Donald S. Clark, 

Secretary.

[FR Doc. 04–22698 Filed 10–7–04; 8:45 am] 

BILLING CODE 6750–01–P

FEDERAL TRADE COMMISSION

[File No. 031 0135] 

White Sands Health Care System, 

L.L.C., et al.; Analysis To Aid Public 

Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

SUMMARY: The consent agreement in this 

matter settles alleged violations of 

federal law prohibiting unfair or 

deceptive acts or practices or unfair 

methods of competition. The attached 

Analysis to Aid Public Comment 

describes both the allegations in the 

draft complaint that accompanies the 

consent agreement and the terms of the 

consent order—embodied in the consent 

agreement—that would settle these 

allegations.

DATES: Comments must be received on 

or before October 28, 2004.

ADDRESSES: Comments should refer to 

‘‘White Sands Health Care System, 

L.L.C., et al., File No. 031 0135,’’ to 

facilitate the organization of comments. 

A comment filed in paper form should 

include this reference both in the text 

and on the envelope, and should be 

mailed or delivered to the following 

address: Federal Trade Commission/

Office of the Secretary, Room H–159, 

600 Pennsylvania Avenue, NW., 

Washington, DC 20580. Comments 

containing confidential material must be 

filed in paper form, as explained in the 

SUPPLEMENTARY INFORMATION section. 

The FTC is requesting that any comment 

filed in paper form be sent by courier or 

overnight service, if possible, because 

U.S. postal mail in the Washington area 

and at the Commission is subject to 

delay due to heightened security 

precautions. 

Comments filed in electronic form 

(except comments containing any 

confidential material) should be sent to 

the following e-mail box: 

consentagreement@ftc.gov.

FOR FURTHER INFORMATION CONTACT:

Steve Vieux, FTC, Bureau of 

Competition, 600 Pennsylvania Avenue, 

NW., Washington, DC 20580, (202) 326–

2306.

SUPPLEMENTARY INFORMATION: Pursuant 

to Section 6(f) of the Federal Trade 

Commission Act, 38 Stat. 721, 15 U.S.C. 

46(f), and Section 2.34 of the 

Commission’s Rules of Practice, 16 CFR 

2.34, notice is hereby given that the 

above-captioned consent agreement 

containing a consent order to cease and 

desist, having been filed with and 

accepted, subject to final approval, by 

the Commission, has been placed on the 

public record for a period of thirty (30) 

days. The following Analysis to Aid 

Public Comment describes the terms of 

the consent agreement, and the 

allegations in the complaint. An 

electronic copy of the full text of the 

consent agreement package can be 

obtained from the FTC Home Page (for 

September 28, 2004), on the World 

Wide Web, at http://www.ftc.gov/os/

2004/09/index.htm. A paper copy can 

be obtained from the FTC Public 

Reference Room, Room 130–H, 600 

Pennsylvania Avenue, NW., 

Washington, DC 20580, either in person 

or by calling (202) 326–2222. 

Public comments are invited, and may 

be filed with the Commission in either 

paper or electronic form. Written 

comments must be submitted on or 

before October 28, 2004. Comments 

should refer to ‘‘White Sands Health 

Care System, L.L.C., et al., File No. 031 

0135,’’ to facilitate the organization of 

comments. A comment filed in paper 

form should include this reference both 

in the text and on the envelope, and 

should be mailed or delivered to the 

following address: Federal Trade 

Commission/Office of the Secretary, 

Room H–159, 600 Pennsylvania 

Avenue, NW., Washington, DC 20580. If 

the comment contains any material for 

which confidential treatment is 

requested, it must be filed in paper 

(rather than electronic) form, and the 

first page of the document must be 

clearly labeled ‘‘Confidential.’’ 1 The 

FTC is requesting that any comment 

filed in paper form be sent by courier or 

overnight service, if possible, because 

U.S. postal mail in the Washington area 

and at the Commission is subject to 

delay due to heightened security 

precautions. Comments filed in 

electronic form should be sent to the 

following e-mail box: 

consentagreement@ftc.gov.

The FTC Act and other laws the 

Commission administers permit the 

collection of public comments to 

consider and use in this proceeding as 

appropriate. All timely and responsive 

public comments, whether filed in 

paper or electronic form, will be 

considered by the Commission, and will 

be available to the public on the FTC 

Web site, to the extent practicable, at 

http://www.ftc.gov. As a matter of 

discretion, the FTC makes every effort to 

remove home contact information for 

individuals from the public comments it 

receives before placing those comments 

on the FTC Web site. More information, 

including routine uses permitted by the 

Privacy Act, may be found in the FTC’s 

privacy policy, at http://www.ftc.gov/

ftc/privacy.htm.

Analysis of Agreement Containing 

Consent Order To Aid Public Comment 

The Federal Trade Commission has 

accepted, subject to final approval, an 

agreement containing a proposed 

Consent Order with the White Sands 

Health Care System, L.L.C., Alamogordo 

Physicians’ Cooperative, Inc., Dacite, 

Inc., and James R. Laurenza. The 

agreement settles charges that these 

60398 Federal Register / Vol. 69, No. 195 / Friday, October 8, 2004 / Notices 

2Some arrangements can facilitate contracting 

between health care providers and payors without 

fostering an illegal agreement among competing 

physicians on fees or fee-related terms. One such 

approach, sometimes referred to as a ‘‘messenger 

model’’ arrangement, is described in the 1996 

Statements of Antitrust Enforcement Policy in 

Health Care jointly issued by the Federal Trade 

Commission and U.S. Department of Justice, at 125. 

See http://www.ftc.gov/reports/hlth3s.htm#8.

parties violated Section 5 of the Federal 

Trade Commission Act, 15 U.S.C. 45, by 

orchestrating and implementing 

agreements among the physician and 

certified registered nurse anesthetist 

(nurse anesthetist) members of White 

Sands to fix prices and other terms on 

which they would deal with health 

plans, and to refuse to deal with such 

purchasers except on collectivelydetermined terms. The proposed 

Consent Order has been placed on the 

public record for 30 days to receive 

comments from interested persons. 

Comments received during this period 

will become part of the public record. 

After 30 days, the Commission will 

review the agreement and the comments 

received, and will decide whether it 

should withdraw from the agreement or 

make the proposed Order final. 

The purpose of this analysis is to 

facilitate public comment on the 

proposed Order. The analysis is not 

intended to constitute an official 

interpretation of the agreement and 

proposed Order or to modify their terms 

in any way. Further, the proposed 

Consent Order has been entered into for 

settlement purposes only and does not 

constitute an admission by any 

respondent that said respondent 

violated the law or that the facts alleged 

in the Complaint (other than 

jurisdictional facts) are true. 

The Complaint 

The allegations of the Complaint are 

summarized below. 

White Sands is a physician-hospital 

organization (PHO), consisting of 

Alamogordo Physicians, an independent 

practice association (IPA); Gerald 

Champion Regional Medical Center 

(Gerald Champion), the sole hospital in 

the Alamogordo area, which is located 

in south-central New Mexico; and 31 

non-physician health care providers, 

including all five nurse anesthetists in 

the Alamogordo area. White Sands was 

organized in 1996 to ‘‘develop pricing 

policies and * * * negotiate and enter 

into Managed Care Contracts’’ on behalf 

of its members. 

Alamogordo Physicians is composed 

of 45 physicians, representing 84% 

percent of all physicians independently 

practicing (that is, those not employed 

by area hospitals) in and around the 

Alamogordo area. Dacite provides 

consulting and payor contracting 

services to White Sands. Mr. Laurenza 

is the founder and President of Dacite, 

and the General Manager and principal 

contract negotiator for White Sands. 

White Sands’ members refuse to deal 

with health plans on an individual 

basis. Instead, Mr. Laurenza negotiates 

price and other contract terms with 

health plans that desire to contract with 

White Sands’ members. Contract terms 

for physician services that Mr. Laurenza 

negotiates for White Sands are 

presented to the White Sands’ Board of 

Managers for approval after acceptance 

by the Alamogordo Physicians’ Board of 

Directors. Mr. Laurenza also negotiates 

contract provisions, including fees, on 

behalf of independently practicing nonphysician health care providers, namely 

nurse anesthetists. Respondents have 

orchestrated collective agreements on 

fees and other terms of dealing with 

health plans, carried out collective 

negotiations with health plans, and 

orchestrated refusals to deal and threats 

to refuse to deal with health plans that 

resisted respondents’ desired terms. 

Although White Sands purported to 

operate as a ‘‘messenger model,’’—that 

is, an arrangement that does not 

facilitate horizontal agreements on 

price—it engaged in various actions that 

demonstrated or orchestrated such 

agreements.2

Respondents have repeatedly 

succeeded in forcing numerous health 

plans to raise fees paid to White Sands’

members, and thereby raised the cost of 

medical care in the Alamogordo area. 

They have been successful in 

‘‘leverag[ing] the collective power of the 

members in obtaining more favorable 

reimbursement rates than could be 

negotiated * * * individually.’’

White Sands engaged in no efficiencyenhancing integration sufficient to 

justify respondents’ joint negotiation of 

fees. By orchestrating agreements among 

White Sands members to deal only on 

collectively-determined terms, and 

actual or threatened refusals to deal 

with health plans that would not meet 

those terms, respondents have violated 

Section 5 of the FTC Act. 

The Proposed Consent Order 

The proposed Order is designed to 

remedy the illegal conduct charged in 

the Complaint and prevent its 

recurrence. It is similar to recent 

consent orders that the Commission has 

issued to settle charges that physician 

groups engaged in unlawful agreements 

to raise fees they receive from health 

plans. Unlike recent consent orders, 

however, this Order also settles charges 

that non-physician health care providers 

engaged in unlawful price agreements as 

well. The Order also includes temporary 

‘‘fencing-in’’ relief to ensure that the 

alleged unlawful conduct by 

respondents does not continue. 

The proposed Order’s specific 

provisions are as follows: 

Paragraph II.A prohibits respondents 

from entering into or facilitating any 

agreement between or among any health 

care providers: (1) To negotiate with 

payors on any health care provider’s 

behalf; (2) to deal, not to deal, or 

threaten not to deal with payors; (3) on 

what terms to deal with any payor; or 

(4) not to deal individually with any 

payor, or to deal with any payor only 

through an arrangement involving the 

respondents.

Other parts of Paragraph II reinforce 

these general prohibitions. Paragraph 

II.B prohibits the respondents from 

facilitating exchanges of information 

between health care providers 

concerning whether, or on what terms, 

to contract with a payor. Paragraph II.C 

bars attempts to engage in any action 

prohibited by Paragraph II.A or II.B, and 

Paragraph II.D proscribes inducing 

anyone to engage in any action 

prohibited by Paragraphs II.A through 

II.C. 

As in other Commission orders 

addressing health care providers’

collective bargaining with health care 

purchasers, certain kinds of agreements 

are excluded from the general bar on 

joint negotiations. First, respondents 

would not be precluded from engaging 

in conduct that is reasonably necessary 

to form or participate in legitimate joint 

contracting arrangements among 

competing health care providers, 

whether a ‘‘qualified risk-sharing joint 

arrangement’’ or a ‘‘qualified clinicallyintegrated joint arrangement.’’ The 

arrangement, however, must not 

facilitate the refusal of, or restrict, 

participants from contracting with 

payors outside of the arrangement. 

As defined in the proposed Order, a 

‘‘qualified risk-sharing joint 

arrangement’’ possesses two key 

characteristics. First, all participants 

must share substantial financial risk 

through the arrangement, such that the 

arrangement creates incentives for the 

participants jointly to control costs and 

improve quality by managing the 

provision of services. Second, any 

agreement concerning reimbursement or 

other terms or conditions of dealing 

must be reasonably necessary to obtain 

significant efficiencies through the joint 

arrangement. 

A ‘‘qualified clinically-integrated joint 

arrangement,’’ on the other hand, need 

not involve any sharing of financial risk. 

Instead, as defined in the proposed 

Order, participants must participate in 

Federal Register / Vol. 69, No. 195 / Friday, October 8, 2004 / Notices 60399

active and ongoing programs to evaluate 

and modify their clinical practice 

patterns in order to control costs and 

ensure the quality of services provided, 

and the arrangement must create a high 

degree of interdependence and 

cooperation among participants. As 

with qualified risk-sharing 

arrangements, any agreement 

concerning price or other terms of 

dealing must be reasonably necessary to 

achieve the efficiency goals of the joint 

arrangement. 

Also, because the Order is intended to 

reach agreements among horizontal 

competitors, Paragraph II would not bar 

agreements that only involve health care 

providers who are part of the same 

medical group practice (defined in 

Paragraph I.E). 

Paragraph III, for a period of three 

years, bars Dacite and Mr. Laurenza 

from negotiating with any payor on 

behalf of White Sands, Alamogordo 

Physicians, or any White Sands or 

Alamogordo Physicians member; and 

from advising any White Sands or 

Alamogordo Physicians member to 

accept or reject any term, condition, or 

requirement of dealing with any payor. 

This temporary ‘‘fencing-in’’ relief is 

included to ensure that the alleged 

unlawful conduct by these respondents 

does not continue. 

Paragraph IV, for a period of three 

years, requires respondents to notify the 

Commission before entering into any 

arrangement to act as a messenger, or as 

an agent on behalf of any health care 

providers, with payors regarding 

contracts. Paragraph IV sets out the 

information necessary to make the 

notification complete. 

Paragraph V, which applies only to 

White Sands, requires White Sands to 

distribute the Complaint and Order to 

all health care providers who have 

participated in White Sands, and to 

payors that negotiated contracts with 

White Sands or indicated an interest in 

contracting with White Sands. 

Paragraph V.B requires White Sands, at 

any payor’s request and without 

penalty, or within one year after the 

Order is made final, to terminate its 

current contracts. Paragraph V.C 

requires White Sands to distribute payor 

requests for contract termination to all 

health care providers who participate in 

White Sands, and, in the event that 

White Sands fails to comply with the 

requirements of Paragraph V due to 

dissolution or cessation of business, 

Alamogordo Physicians is required to 

do so. 

Paragraph VI requires Alamogordo 

Physicians to notify the Commission of 

any change in Alamogordo Physicians 

that may affect its compliance with the 

Order, such as dissolution. In the event 

that White Sands or Alamagordo 

Physicians fails to comply with the 

requirements of Paragraph V, or 

Alamogordo Physicians fails to comply 

with Paragraph VI, Paragraph VII would 

require Mr. Laurenza to do so. 

Paragraph VIII generally requires 

Dacite to distribute the Complaint and 

Order to health care providers who have 

participated in any group that has been 

represented by Dacite since January 1, 

2003, and to each payor with which 

Dactite has dealt since January 1, 2003, 

for the purpose of contracting. In the 

event that Dacite fails to comply with 

the requirements of Paragraph VIII, 

Paragraph IX would require Mr. 

Laurenza to do so. 

Paragraphs V.E, V.F, VIII.C, VIII.D, X, 

and XI of the proposed Order impose 

various obligations on respondents to 

report or provide access to information 

to the Commission to facilitate 

monitoring respondents’ compliance 

with the Order. 

The proposed Order will expire in 20 

years.

By direction of the Commission. 

Donald S. Clark, 

Secretary.

[FR Doc. 04–22699 Filed 10–7–04; 8:45 am] 

BILLING CODE 6750–01–P

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Meeting of the Presidential Advisory 

Council on HIV/AIDS

AGENCY: Department of Health and 

Human Services, Office of the Secretary.

ACTION: Notice of meeting.

SUMMARY: As stipulated by the Federal 

Advisory Committee Act, the 

Department of Health. and Human 

Services (DHHS) is hereby giving notice 

that the Presidential Advisory Council 

on HIV/AIDS (PACHA) will hold a 

meeting. This meeting is open to the 

public. A description of the Council’s 

functions is included also with this 

notice. 

Date and Time: November 9, 2004, 

8:30 a.m. to 5 p.m., and November 10, 

2004, 8:30 a.m. to 4 p.m.

ADDRESSES: Hubert H. Humphrey 

Building, 200 Independence Avenue, 

SW., Washington, DC 20201. Conference 

Room 800.

FOR FURTHER INFORMATION, CONTACT:

Joseph Grogan, Esq., Executive Director, 

Presidential Advisory Council on HIV/

AIDS, Department of Health and Human 

Services, Hubert H. Humphrey Building, 

200 Independence Avenue, SW., Room 

736E, Washington, DC 20201; or visit 

the Council’s Web site at http://

www.pacha.gov.

SUPPLEMENTARY INFORMATION: PACHA 

was established by Executive Order 

12963, dated June 14, 1995, as amended 

by Executive Order 13009, dated June 

14, 1996. PACHA was established to 

provide advice, information, and 

recommendations to the President 

regarding programs and policies 

intended to (a) promote effective 

prevention of HIV disease, (b) advance 

research on HIV and AIDS, and (c) 

promote quality services to persons 

living with HIV disease and AIDS. 

PACHA was established to serve solely 

as an advisory body to the President and 

the Secretary of Health and Human 

Services. PACHA is composed of not 

more than 35 members. PACHA 

membership is determined by the 

Secretary from individuals who are 

considered authorities with particular 

expertise in, or knowledge of, matters 

concerning HIV/AIDS. 

The agenda for this meeting includes 

the following topics: HIV/AIDS 

prevention, care and treatment, and 

global HIV/AIDS issues. Time will be 

allotted during the meeting for public 

comment. 

Public attendance is limited to space 

available and pre-registration is required 

for both attendance and public 

comment. Any individual who wishes 

to attend and/or comment must call 

(202) 690–5560 to register. Individuals 

must provide a government issued 

photo ID for entry into the meeting. 

Individuals who need special 

assistance, such as sign language 

interpretation or other reasonable 

accommodations, should notify the 

registrar. 

Members of the public will have the 

opportunity to provide comments at the 

meeting. Public comment will be 

limited to three (3) minutes per speaker 

and to time available. Written 

testimony, not exceed five (5) pages, 

will be accepted by mail or facsimile at 

(202) 690–7560. Written testimony will 

not be accepted after 5 p.m., 

Wednesday, November 3, 2004.

Dated: September 27, 2004. 

Joseph Grogan, 

Executive Director, Presidential Advisory 

Council on HIV/AIDS.

[FR Doc. 04–22626 Filed 10–7–04; 8:45 am] 

BILLING CODE 4150–28–P