I

104TH CONGRESS

2D SESSION H. R. 2925

To modify the application of the antitrust laws to health care provider

networks that provide health care services; and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 1, 1996

Mr. HYDE (for himself, Mr. ARCHER, Mr. WELDON of Florida, Mr. MCCOLLUM, Mr. GEKAS, Mr. COBLE, Mr. SMITH of Texas, Mr. HASTERT, Mr.

SCHIFF, Mr. THOMAS, Mr. CANADY of Florida, Mr. INGLIS of South

Carolina, Mr. GOODLATTE, Mr. BOUCHER, Mr. CRANE, Mr. SHAW, Mrs.

JOHNSON of Connecticut, Mr. MCCRERY, Mr. CAMP, Mr. CAMPBELL, Mr.

SAM JOHNSON of Texas, Mr. CHRISTENSEN, Mr. GANSKE, Mr. LIPINSKI,

and Mr. HANCOCK) introduced the following bill; which was referred to

the Committee on the Judiciary

A BILL

To modify the application of the antitrust laws to health

care provider networks that provide health care services;

and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Antitrust Health Care

5 Advancement Act of 1996’’.
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1 SEC. 2. APPLICATION OF ANTITRUST RULE OF REASON TO

2 HEALTH CARE PROVIDER NETWORKS.

3 (a) RULE OF REASON STANDARD.—In any action

4 under the antitrust laws, or under any State law similar

5 to the antitrust laws—

6 (1) the conduct of a health care provider in ex7 changing with 1 or more other health care providers

8 information relating to costs, sales, profitability,

9 marketing, prices, or fees of any health care service

10 if—

11 (A) the exchange of such information is

12 solely for the purpose of establishing a health

13 care provider network and is reasonably re14 quired for such purpose, and

15 (B) such information is not used for any

16 other purpose,

17 (2) the conduct of a health care provider net18 work (including any health care provider who is a

19 member of such network and who is acting on behalf

20 of such network) in negotiating, making, or perform21 ing a contract (including the establishment and

22 modification of a fee schedule and the development

23 of a panel of physicians), to the extent such contract

24 is for the purpose of providing health care services

25 to individuals under the terms of a health benefit

26 plan, and
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1 (3) the conduct of any member of such network

2 for the purpose of providing such health care serv3 ices under such contract to such extent,

4 shall not be deemed illegal per se. Such conduct shall be

5 judged on the basis of its reasonableness, taking into ac6 count all relevant factors affecting competition, including

7 the effects on competition in properly defined markets.

8 (b) DEFINITIONS.—For purposes of subsection (a):

9 (1) ANTITRUST LAWS.—The term ‘‘antitrust

10 laws’’ has the meaning given it in subsection (a) of

11 the first section of the Clayton Act (15 U.S.C. 12),

12 except that such term includes section 5 of the Fed13 eral Trade Commission Act (15 U.S.C. 45) to the

14 extent that such section 5 applies to unfair methods

15 of competition.

16 (2) HEALTH BENEFIT PLAN.—The term

17 ‘‘health benefit plan’’ means—

18 (A) a hospital or medical expense-incurred

19 policy or certificate,

20 (B) a hospital or medical service plan con21 tract,

22 (C) a health maintenance subscriber con23 tract, or

24 (D) a multiple employer welfare arrange25 ment or employee benefit plan (as defined
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1 under the Employee Retirement Income Secu2 rity Act of 1974).

3 Such term includes a contract to provide health care

4 services under section 1876 or 1903(m) of the Social

5 Security Act.

6 (3) HEALTH CARE PROVIDER.—The term

7 ‘‘health care provider’’ means any individual or en8 tity that is engaged in the delivery of health care

9 services in a State and that is required by State law

10 or regulation to be licensed or certified by the State

11 to engage in the delivery of such services in the

12 State.

13 (4) HEALTH CARE SERVICE.—The term ‘‘health

14 care service’’ means any health care service for

15 which payment may be made under a health benefit

16 plan, including services related to the delivery or ad17 ministration of such service.

18 (5) HEALTH CARE PROVIDER NETWORK.—The

19 term ‘‘health care provider network’’ means an orga20 nization that—

21 (A) is organized by, operated by, and com22 posed of members who are health care providers

23 and for purposes that include providing health

24 care services,
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1 (B) is funded in part by capital contribu2 tions made by the members of such organiza3 tion,

4 (C) with respect to each contract made by

5 such organization for the purpose of providing

6 a type of health care service to individuals

7 under the terms of a health benefit plan—

8 (i) requires all members of such orga9 nization who engage in providing such type

10 of health care service to agree to provide

11 health care services of such type under

12 such contract,

13 (ii) receives the compensation paid for

14 the health care services of such type pro15 vided under such contract by such mem16 bers, and

17 (iii) provides for the distribution of

18 such compensation,

19 (D) has established a program to review,

20 pursuant to written guidelines, the quality, effi21 ciency, and appropriateness of treatment meth22 ods and setting of services for all health care

23 providers and all patients participating in such

24 health benefit plan, along with internal proce-
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1 dures to correct identified deficiencies relating

2 to such methods and such services,

3 (E) has established a program to monitor

4 and control utilization of health care services

5 provided under such health benefit plan, for the

6 purpose of improving efficient, appropriate care

7 and eliminating the provision of unnecessary

8 health care services,

9 (F) has established a management pro10 gram to coordinate the delivery of health care

11 services for all health care providers and all pa12 tients participating in such health benefit plan,

13 for the purpose of achieving efficiencies and en14 hancing the quality of health care services pro15 vided, and

16 (G) has established a grievance and appeal

17 process for such organization designed to review

18 and promptly resolve beneficiary or patient

19 grievances and complaints.

20 (6) STATE.—The term ‘‘State’’ has the mean21 ing given it in section 4G(2) of the Clayton Act (15

22 U.S.C. 15g(2)).

23 SEC. 3. ISSUANCE OF GUIDELINES.

24 Not later than 180 days after the date of the enact25 ment of this Act, the Attorney General and the Federal
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1 Trade Commission jointly shall issue guidelines specifying

2 the enforcement policies and analytical principles that will

3 be applied by the Department of Justice and the Commis4 sion with respect to the operation of section 2.

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