Union Calendar No. 325

104TH CONGRESS

2D SESSION H. R. 2925

[Report No. 104–646]

A BILL

To modify the application of the antitrust laws to

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

JUNE 27, 1996

Committed to the Committee of the Whole House on the

State of the Union and ordered to be printed
IB

Union Calendar No. 325

104TH CONGRESS

2D SESSION H. R. 2925

[Report No. 104–646]

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

JUNE 27, 1996

Additional sponsors: Mr. DAVIS, Mr. NORWOOD, Mr. ENSIGN, Ms. GREENE

of Utah, Mr. HOEKSTRA, Mr. MORAN, Mr. PETRI, Mr. TALENT, Mr.

LINDER, Mr. HUTCHINSON, Mr. MOORHEAD, Mrs. SMITH of Washington,

Mr. EHLERS, Mr. COOLEY of Oregon, Mr. SCARBOROUGH, Mr.

KNOLLENBERG, Mr. BARCIA, Mr. STUMP, Mr. TAYLOR of North Carolina, Mr. ZIMMER, Ms. DUNN of Washington, Mr. HOSTETTLER, Mr.

SAXTON, Mr. FOX of Pennsylvania, Mr. BARR of Georgia, Mr. HAYES,

Mr. PORTMAN, Mr. MICA, Mr. MCINTOSH, Mr. SALMON, Mr. COMBEST,

Mr. CRAMER, Mr. PICKETT, Ms. PRYCE, Mr. LATHAM, Mr. SHADEGG,

Mr. NUSSLE, Mr. THORNBERRY, Mr. DICKEY, Mr. CRAPO, Mr. BUNNING

of Kentucky, Mr. GORDON, Mr. DUNCAN, Mr. SANFORD, Mr. BARTLETT

of Maryland, Mr. BALLENGER, Mr. CUNNINGHAM, Mr. UPTON, Mr.

PARKER, Mr. ZELIFF, Mr. HOBSON, Mr. WALSH, Mr. ROGERS, Mr.

SOUDER, Mr. TAYLOR of Mississippi, Mr. CONDIT, Mr. FRELINGHUYSEN,

Mr. GILLMOR, Mr. DEFAZIO, Mr. LIVINGSTON, Mr. KILDEE, Mrs. FOWLER, Mr. MANZULLO, Mr. YOUNG of Alaska, Mr. TORKILDSEN, Mr.

GREENWOOD, Mr. NETHERCUTT, Mr. WHITFIELD, Mrs. VUCANOVICH,

Mr. WICKER, Mr. SHAYS, Mr. FOLEY, Mr. GUTKNECHT, Mr. MINGE, Mr.
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WELLER, Mr. STOCKMAN, Mr. WILSON, Mr. EHRLICH, Mr. STEARNS,

Mrs. MYRICK, Mr. NEY, Mr. STENHOLM, Mr. VOLKMER, Mr. BONILLA,

Mr. FORBES, Mr. CHRYSLER, Mr. WAMP, Mr. CASTLE, Mr. CALLAHAN,

Mr. TEJEDA, Mr. MCKEON, Mr. LAZIO of New York, Mr. MONTGOMERY,

Mr. LIGHTFOOT, Mr. PETERSON of Minnesota, Mr. PAYNE of Virginia,

Mr. HEINEMAN, Mr. ENGLISH of Pennsylvania, Mr. GILMAN, Mr. JONES,

Mr. BURR, Mr. HOLDEN, Mr. TATE, Mr. BALDACCI, Mrs. KELLY, Mr.

HAYWORTH, Mr. OXLEY, Mr. LEWIS of Kentucky, Mr. PORTER, Mr.

BROWNBACK, Mr. FUNDERBURK, Mr. JOHNSON of South Dakota, Mr.

FROST, Mrs. CUBIN, Mr. COLLINS of Georgia, Mrs. CHENOWETH, Mr.

BARRETT of Wisconsin, Mr. LONGLEY, Mr. DEAL of Georgia, Ms. HARMAN, Mr. KINGSTON, Mr. HILLIARD, Mr. HILLEARY, Ms. KAPTUR, Mr.

FRISA, Mr. WATTS of Oklahoma, Mr. BILBRAY, Mr. COBURN, and Mrs.

LINCOLN

JUNE 27, 1996

Committed to the Committee of the Whole House on the State of the Union

and ordered to be printed

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’’.

6 SEC. 2. APPLICATION OF ANTITRUST RULE OF REASON TO

7 HEALTH CARE PROVIDER NETWORKS.

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

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

10 to the antitrust laws—
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1 (1) the conduct of a health care provider in ex2 changing with 1 or more other health care providers

3 information relating to costs, sales, profitability,

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

5 if—

6 (A) the exchange of such information is

7 solely for the purpose of establishing a health

8 care provider network and is reasonably re9 quired for such purpose, and

10 (B) such information is not used for any

11 other purpose,

12 (2) the conduct of a health care provider net13 work (including any health care provider who is a

14 member of such network and who is acting on behalf

15 of such network) in negotiating, making, or perform16 ing a contract (including the establishment and

17 modification of a fee schedule and the development

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

19 is for the purpose of providing health care services

20 to individuals under the terms of a health benefit

21 plan, and

22 (3) the conduct of any member of such network

23 for the purpose of providing such health care serv24 ices under such contract to such extent,
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1 shall not be deemed illegal per se. Such conduct shall be

2 judged on the basis of its reasonableness, taking into ac3 count all relevant factors affecting competition, including

4 the effects on competition in properly defined markets.

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

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

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

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

9 except that such term includes section 5 of the Fed10 eral Trade Commission Act (15 U.S.C. 45) to the

11 extent that such section 5 applies to unfair methods

12 of competition.

13 (2) HEALTH BENEFIT PLAN.—The term

14 ‘‘health benefit plan’’ means—

15 (A) a hospital or medical expense-incurred

16 policy or certificate,

17 (B) a hospital or medical service plan con18 tract,

19 (C) a health maintenance subscriber con20 tract, or

21 (D) a multiple employer welfare arrange22 ment or employee benefit plan (as defined

23 under the Employee Retirement Income Secu24 rity Act of 1974).
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1 Such term includes a contract to provide health care

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

3 Security Act.

4 (3) HEALTH CARE PROVIDER.—The term

5 ‘‘health care provider’’ means any individual or en6 tity that is engaged in the delivery of health care

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

8 or regulation to be licensed or certified by the State

9 to engage in the delivery of such services in the

10 State.

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

12 care service’’ means any health care service for

13 which payment may be made under a health benefit

14 plan, including services related to the delivery or ad15 ministration of such service.

16 (5) HEALTH CARE PROVIDER NETWORK.—The

17 term ‘‘health care provider network’’ means an orga18 nization that—

19 (A) is organized by, operated by, and com20 posed of members who are health care providers

21 and for purposes that include providing health

22 care services,

23 (B) is funded in part by capital contribu24 tions made by the members of such organiza25 tion,
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1 (C) with respect to each contract made by

2 such organization for the purpose of providing

3 a type of health care service to individuals

4 under the terms of a health benefit plan—

5 (i) requires all members of such orga6 nization who engage in providing such type

7 of health care service to agree to provide

8 health care services of such type under

9 such contract,

10 (ii) receives the compensation paid for

11 the health care services of such type pro12 vided under such contract by such mem13 bers, and

14 (iii) provides for the distribution of

15 such compensation,

16 (D) has established a program to review,

17 pursuant to written guidelines, the quality, effi18 ciency, and appropriateness of treatment meth19 ods and setting of services for all health care

20 providers and all patients participating in such

21 health benefit plan, along with internal proce22 dures to correct identified deficiencies relating

23 to such methods and such services,

24 (E) has established a program to monitor

25 and control utilization of health care services
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1 provided under such health benefit plan, for the

2 purpose of improving efficient, appropriate care

3 and eliminating the provision of unnecessary

4 health care services,

5 (F) has established a management pro6 gram to coordinate the delivery of health care

7 services for all health care providers and all pa8 tients participating in such health benefit plan,

9 for the purpose of achieving efficiencies and en10 hancing the quality of health care services pro11 vided, and

12 (G) has established a grievance and appeal

13 process for such organization designed to review

14 and promptly resolve beneficiary or patient

15 grievances and complaints.

16 (6) STATE.—The term ‘‘State’’ has the mean17 ing given it in section 4G(2) of the Clayton Act (15

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

19 SEC. 3. ISSUANCE OF GUIDELINES.

20 Not later than 180 days after the date of the enact21 ment of this Act, the Attorney General and the Federal

22 Trade Commission jointly shall issue guidelines specifying

23 the enforcement policies and analytical principles that will

24 be applied by the Department of Justice and the Commis25 sion with respect to the operation of section 2.