[Federal Register Volume 75, Number 32 (Thursday, February 18, 2010)]
[Notices]
[Pages 7266-7268]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-3033]


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FEDERAL TRADE COMMISSION

[File No. 061 0172]


Roaring Fork Valley Physicians I.P.A.; Analysis of the Agreement 
Containing Consent Order to Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

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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 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 March 5, 2010.

ADDRESSES: Interested parties are invited to submit written comments 
electronically or in paper form. Comments should refer to ``Roaring 
Fork Valley, File No. 061 0172'' to facilitate the organization of 
comments. Please note that your comment -- including your name and your 
state -- will be placed on the public record of this proceeding, 
including on the publicly accessible FTC website, at (http://www.ftc.gov/os/publiccomments.shtm).
    Because comments will be made public, they should not include any 
sensitive personal information, such as an individual's Social Security 
Number; date of birth; driver's license number or other state 
identification number, or foreign country equivalent; passport number; 
financial account number; or credit or debit card number. Comments also 
should not include any sensitive health information, such as medical 
records or other individually identifiable health information. In 
addition, comments should not include any ``[t]rade secret or any 
commercial or financial information which is obtained from any person 
and which is privileged or confidential. . . .,'' as provided in 
Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and Commission Rule 
4.10(a)(2), 16 CFR 4.10(a)(2). Comments containing material for which 
confidential treatment is requested must be filed in paper form, must 
be clearly labeled ``Confidential,'' and must comply with FTC Rule 
4.9(c), 16 CFR 4.9(c).\1\
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    \1\ 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 FTC Rule 4.9(c), 16 CFR 
4.9(c).
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    Because paper mail addressed to the FTC is subject to delay due to 
heightened security screening, please consider submitting your comments 
in electronic form. Comments filed in electronic form should be 
submitted by using the following weblink: (https://public.commentworks.com/ftc/roaringforkconsent) and following the 
instructions on the web-based form. To ensure that the Commission 
considers an electronic comment, you must file it on the web-based form 
at the weblink: (https://public.commentworks.com/ftc/roaringforkconsent.) If this Notice appears at (http://www.regulations.gov/search/index.jsp), you may also file an electronic 
comment through that website. The Commission will consider all comments 
that regulations.gov forwards to it. You may also visit the FTC website 
at (http://www.ftc.gov/) to read the Notice and the news release 
describing it.
    A comment filed in paper form should include the ``Roaring Fork 
Valley, File No. 061 0172'' 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-135 (Annex 
D), 600 Pennsylvania Avenue, NW, Washington, DC 20580. 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.
    The Federal Trade Commission Act (``FTC Act'') and other laws the 
Commission administers permit the collection of public comments to 
consider and use in this proceeding as appropriate. The Commission will 
consider all timely and responsive public comments that it receives, 
whether filed in paper or electronic form. Comments received will be 
available to the public on the FTC website, to the extent practicable, 
at (http://www.ftc.gov/os/publiccomments.shtm). As a matter of 
discretion, the Commission makes every effort to remove home contact 
information for individuals from the public comments it receives before 
placing those comments on the FTC website. 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.shtm).

FOR FURTHER INFORMATION CONTACT: Constance M. Salemi (202-326-2643), 
Bureau of Competition, 600 Pennsylvania Avenue, NW, Washington, D.C. 
20580.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and Sec.  2.34 the 
Commission 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 February 3, 2010), on the World Wide Web, at (http://www.ftc.gov/os/actions.shtm). A paper copy can be obtained from the FTC Public 
Reference Room, Room 130-H,

[[Page 7267]]

600 Pennsylvania Avenue, NW, Washington, D.C. 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. All comments should be filed as 
prescribed in the ADDRESSES section above, and must be received on or 
before the date specified in the DATES section.

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 (``proposed 
order'') with Roaring Fork Valley Physicians I.P.A., Inc., (``RFV''). 
The agreement settles charges by the Federal Trade Commission that RFV 
violated Section 5 of the Federal Trade Commission Act, 15 U.S.C. Sec.  
45, by, among other things, orchestrating and implementing price-
related agreements and concerted refusals to deal among competing 
physician members of RFV to maintain and raise the price at which RFV's 
physician members contract with payers.
    The proposed 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 order has been entered into for 
settlement purposes only and does not constitute an admission by the 
proposed respondent that it 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.
    RFV is a type of organization commonly referred to in the health 
care industry as an ``independent practice association'' because its 
members consist of independent physicians in solo and small group 
practices. RFV is controlled by and organized in substantial part for 
the pecuniary benefit of its approximately 85 physician members. RFV is 
located in Garfield County, Colorado.
    The complaint alleges that since at least 2003 RFV, although 
purporting to use a messenger model, negotiated price-related terms on 
behalf of its members for the purpose of increasing and maintaining the 
rates for services provided by RFV's otherwise competing physician 
members. RFV increased rates by demanding that payers include automatic 
annual cost of living adjustments (COLAs) in their contracts. RFV held 
lengthy bargaining sessions with payers to pressure them into including 
COLAs and other terms in their contracts. To protect the automatic 
increases, RFV refused to messenger contracts with Medicare-based rates 
because of their potential to decline. RFV feared Medicare-based rates 
would decline over time.
    The complaint also alleges that since at least 2003 RFV and its 
members engaged in concerted refusals to deal with payers except upon 
the collectively-agreed upon contract terms demanded during 
negotiations. RFV organized concerted refusals to deal by requiring 
payers contracting with RFV to persuade 80 percent of all RFV members 
and 50 percent of each RFV specialty (``80/50 rule'') to accept their 
contracts. After a payer satisfied the 80/50 rule, RFV signed, 
administered and bound all the members to the payer's contract. RFV 
refused to messenger the contract of a payer who failed to satisfy the 
80/50 rule. RFV reinforced the 80/50 rule by refusing to provide 
unsuccessful payers with the identity of the members willing to accept 
their contracts. RFV's refusal prevented the unsuccessful payers from 
contracting directly with individual physicians willing to accept the 
proposed contract terms. RFV also reinforced its concerted refusals to 
deal by encouraging members to only use the IPA for their contracting. 
RFV targeted its concerted refusals at national payers and warned 
members against contracting with them. Most national payers attempting 
to contract with RFV could not satisfy the 80/50 rule. RFV members did 
not engage in any efficiency-enhancing integration of their practices 
sufficient to justify the collectively negotiation or the concerted 
refusals to deal. Accordingly, the complaint alleges that RFV violated 
Section 5 of the FTC Act.

The Proposed 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.
    The proposed order's specific provisions are as follows:
    Paragraph II.A prohibits RFV from entering into or facilitating any 
agreement between or among any physicians: (1) to negotiate with payers 
on any physician's behalf; (2) to deal, refuse to deal, or threaten to 
refuse to deal with payers; (3) on any terms on which a physician is 
willing to deal with any payer; or (4) not to deal individually with 
any payer, or not to deal with any payer other than through RFV.
    Other parts of Paragraph II reinforce these general prohibitions. 
Paragraph II.B prohibits RFV from facilitating exchanges of information 
between physicians concerning any physician's willingness to deal with 
a payer or the terms or conditions, including price terms, on which the 
physician is willing to deal with a payer. Paragraph II.C bars attempts 
to engage in any action prohibited by Paragraph II.A or II.B, and 
Paragraph II.D proscribes RFV from inducing anyone to engage in any 
action prohibited by Paragraphs II.A through II.C.
    As in other Commission orders addressing providers' collective 
conduct with health-care purchasers, Paragraph II excludes certain 
kinds of agreements from its prohibitions. First, RFV is not precluded 
from engaging in conduct that is reasonably necessary to form or 
participate in legitimate joint contracting arrangements among 
competing physicians, such as a ``qualified risk-sharing joint 
arrangement'' or a ``qualified clinically-integrated joint 
arrangement.'' The arrangement, however, must not restrict the ability 
of, or facilitate the refusal of, physicians who participate in it to 
contract with payers outside of the arrangement.
    As defined in the proposed order, a ``qualified risk-sharing joint 
arrangement'' possesses two characteristics. First, all physician 
participants must share substantial financial risks through the 
arrangement, such that the arrangement creates incentives for the 
physician 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

[[Page 7268]]

order, physician participants must participate in 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 physicians. 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.
    Paragraph III, for three years, requires RFV to notify the 
Commission before it enters into any arrangements to act as a messenger 
or an agent on behalf of any physicians, with payers regarding 
contracts. Paragraph IV sets out the information necessary to make the 
notification complete.
    Paragraph V, for three years, requires RFV to notify the Commission 
before participating in contracting with health plans on behalf of 
either a qualified risk-sharing or a qualified clinically-integrated 
joint arrangement. Paragraph VI sets out the information necessary to 
satisfy the notification requirement.
    Paragraph VII imposes other notification obligations on RFV and 
requires the termination of certain contracts that were entered into 
illegally. Paragraph VII.A require RFV to distribute the complaint and 
order to (1) physicians who have participated in RFV since 2001; (2) to 
various past and current personnel of RFV; and (3) to payers with whom 
RFV has dealt since 2001. Paragraph VII.B requires RFV, at any payer's 
request and without penalty, to terminate its existing contracts with 
the payer for the provision of physician services. Paragraph VII.B 
allows certain contracts currently in effect to be extended at the 
written request of the payer no longer than one year from the date that 
the order becomes final. Paragraph VII.C requires RFV to distribute 
payer requests for contract termination to physicians who participate 
in the contract Paragraph VII.D requires RFV for three years, to 
provide new members, personnel, and payers not previously receiving a 
copy, a copy of the Order and the Complaint. Paragraph VII.D also 
requires RFV to publish annually a copy of the Order and the Complaint 
in its newsletter.
    Paragraphs VIII, IX, and X impose various obligations on RFV to 
report or provide access to information to the Commission to facilitate 
the monitoring of compliance with the order. Finally, Paragraph XI 
provides that the order will expire in 20 years.
    By direction of the Commission.

Donald S. Clark
Secretary.
[FR Doc. 2010-3033 Filed 2-17-10: 7:19 am]
BILLING CODE 6750-01-S