1 See MGMA website at www.mgma.com.

UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

WASHINGTON, D.C. 20580

 Bureau of Competition

 ~

 Jeffrey W. Brennan

 Assistant Director

 Health Care Services & Products

 Direct Dial

 (202) 326-3688

November 3, 2003

Gerald Niederman, Esq.

Faegre & Benson

3200 Wells Fargo Center

1700 Lincoln Street

Denver, CO 80203-4532

Dear Mr. Neiderman:

This letter responds to your request on behalf of Medical Group Management Association

(MGMA) for an advisory opinion concerning MGMA’s proposal to conduct and publish the

results of a survey of physician practices. The survey will seek information regarding several

aspects of physicians’ contractual relationships with third-party payers, including information

about amounts that health plans pay for physician services. MGMA will publish the information

obtained through the survey only on an aggregated basis; it will not disclose information about

individual payers. As discussed below, it does not appear likely that publication of the survey

results, in the manner described in your letters, will prompt coordinated anticompetitive behavior

by physicians. Accordingly, the Commission staff has no intention to recommend law

enforcement action regarding the proposed conduct. 

Description of the Proposed Conduct

MGMA is a professional association that represents medical practice administrators,

including individual administrators and executives of medical groups and other providers of

health care services. According to information on MGMA’s website, it has 19,000 members

who manage 11,000 physician practices, integrated health care systems, and hospital- and

medical school-affiliated practices containing 220,000 doctors throughout the United States.1

Your request letter states that one of MGMA’s functions is to provide to its members data

that allow them to benchmark the performance and status of their medical group compared to its
Gerald Niederman, Esq.

Page 2

2 See MGMA website at www.mgma.com/surveys.

peers. This information, according to MGMA, can be an important strategic tool in medical

groups’ competition in the market. MGMA already does annual surveys of its members relating

to, among other things, physician compensation and production, and practice costs.2 

MGMA’s request for an advisory opinion focuses on its proposal to conduct a survey of

insurer payments to medical groups and of “medical groups’ overall satisfaction with certain

aspects of contract performance of third-party payers in the marketplace.” MGMA will send the

initial survey to Colorado primary care physicians (family practitioners, general internists,

pediatricians, and obstetrician-gynecologists). It will obtain information from members of the

Colorado State Medical Association as well as members of MGMA. The survey results will be

offered for commercial sale to interested parties (at a reduced price to survey participants). If the

program is successful in Colorado, then MGMA may expand it to other states and specialties.

Only employees of MGMA responsible for the data collection, analysis, and reporting will

have access to the underlying survey responses; this information will not be shared among the

physician practices participating in the survey. The payment information, when published, will

be at least 90 days old. Either MGMA will request information about prices that were in effect

ninety days prior to the response, or it will ask about current prices but not publish them in any

form until 90 days after the information is collected. 

The proposed survey instrument asks each responding practice to report the amount

received for each of ten evaluation and management services procedure codes from up to ten

commercial fee-for-service payers. MGMA will publish for each procedure code only

aggregated information relating to prices paid by all the insurers whose data are reflected in the

survey. The information will not be weighted according to the size of the reporting practice

group or the number of patients covered by a particular payer. MGMA intends to report, for

each procedure code surveyed, the number of responses, the mean, the standard deviation, the

25th percentile, the median, the 75th percentile, and the 90th percentile of payments, both for

Colorado as a whole and for metropolitan areas within the state. Separate reports would be

generated for all primary care practices combined and for particular types of primary care

practitioners. The data may also be reported by practice groups with certain characteristics (such

as size). MGMA will neither collect nor report information on prices paid by individual, named

insurers. 

In addition, the survey will seek information regarding: 

C What percentage of commercial fee-for-service payers maintain an adequate

network of specialists, based on factors such as length of time required for a

patient to get to an appointment with a specialist, travel time to specialists to

whom patients are referred, and the adequacy of communications between the
Gerald Niederman, Esq.

Page 3

referring doctor and specialists; 

C What percentage of commercial fee-for-service claims are denied, partially

denied, or returned for correction or additional information;

C What percentage of commercial fee-for-service claims are paid within certain

time periods (from 30 to 75 days) after submission; and

C The practices’ satisfaction with payers’ responsiveness to questions or concerns

regarding claims.

MGMA will not collect and report the information about these subjects with reference to specific

payers, but only on an aggregated basis.

MGMA contends that the information exchange will “promote the exchange of meaningful

data and enhance the overall efficiency of the health care marketplace, not only among physician

participants but also among insurers, employers and consumers.” In essence, MGMA contends

that providing information about market conditions to providers and purchasers of health care

services will permit those parties to become more efficient participants in the health care system.

It also asserts that the proposed information exchange does not pose a significant risk of

anticompetitive effects because of the nature of the information involved and the procedural

safeguards relating to the survey process that MGMA intends to implement: namely,

safeguarding against disclosure of the underlying data to persons other than selected MGMA

personnel, the focus on prices at least 90 days old, and the aggregated nature of the data to be

reported. 

Legal Analysis

MGMA’s publication of information obtained from physician practices through the

proposed survey of insurer payments and other aspects of insurer business practices constitutes a

type of information exchange among competitors. The information that MGMA proposes to

collect and publish can be divided into two general categories: information about insurer

payments to medical practices, and information about physician practices’ satisfaction with other

aspects of their business relationships with insurers. Each category of information raises

somewhat different antitrust issues and thus warrants separate discussion.

Insurer Payments

MGMA’s publication of information about insurer payments to survey respondents is

similar to an exchange of price information among physicians, because the payment that any

physician practice receives pursuant to a contract with a particular insurer reflects the price that

the physicians have agreed to accept for services rendered to patients covered by that insurer’s

health plan. As is recognized in the DOJ/FTC Statements of Antitrust Enforcement Policy in
Gerald Niederman, Esq.

Page 4

3 The Statements are available at www.ftc.gov/reports/hlth3s.htm#8.

Health Care (1996) (Statements),

3

 competitors’ exchanges of price, cost, and other types of

information do not necessarily endanger competition. In many circumstances, indeed, providing

information to market participants about prevailing market conditions, including information

about market prices, can improve the functioning of the market and enhance competition. In

some circumstances, however, an exchange of price information can be part of a price-fixing

arrangement, or can facilitate sellers’ tacit coordination of their competitive behavior. A price

survey such as MGMA proposes to undertake could restrain competition by resulting in

physicians’ concertedly or interdependently modifying their pricing or contracting behavior

relative to insurers. As your letter recognizes, safeguards relating to the manner in which the

price information is gathered and published can significantly reduce the risk that an exchange of

price information will result in anticompetitive effects.

The Statements provide an antitrust “safety zone” for exchanges of price information that

met the following criteria:

C the survey is managed by a third-party;

C the information provided by survey participants is based on data more than three

months old; and

C there are at least five providers reporting data upon which each disseminated

statistic is based, no individual’s data represents more than 25 percent on a

weighted basis of any statistic, and the information disseminated is sufficiently

aggregated that the prices charged by any particular health care provider cannot

be identified.

These conditions are intended to assure that competing sellers do not use the information

exchange to discuss or determine mutually acceptable price levels.

The safety zone does not by its terms apply to MGMA’s survey of insurer payment

information. Dissemination of that information may, in some circumstances, have different

competitive effects from dissemination of physician price information. Thus, MGMA’s decision

to adopt with respect to the proposed survey the types of safeguards found in the safety zone –

preventing disclosure of the underlying payment data to physicians, focusing on past or current

rather than future payments, publishing only statistics that combine data from at least 5

respondents, and publishing the information in an aggregated form that prevents disclosure of the

prices paid by individual insurers or received by individual physician practices – are not by

themselves dispositive with respect to the antitrust analysis. Nonetheless, these safeguards

provides significant protection against use of the information to restrict competition among

physicians.

In addition, the circumstances of the proposed activity provide no indication that the
Gerald Niederman, Esq.

Page 5

4 Collusion may be easier the fewer the competitors that exist in a market. 

Accordingly, MGMA would reduce the antitrust risk by refraining from publishing information

relating to geographic markets containing a small number of physician practices in a particular

specialty.

proposed conduct is likely to encourage restraints on the competitive process, or is intended to

do so. MGMA will not be acting in a representative capacity with health plans on behalf of any

physician group, and it will not provide advice or suggestions to practices about proper pricing. 

The way that the information will be presented does not appear likely to facilitate tacit

agreement on any particular price level, because the information will not be weighted, prices of

individual payers will not be identified, and several price levels for each procedure will be

reported. Physicians could, of course, use the information disclosed through MGMA’s survey to

enter into agreements on the prices they will accept from insurers. Such conduct would be

patently illegal. The survey itself, however, is not likely to increase appreciably the risk of such

conduct.

On balance, the potential procompetitive effects of providing market participants with

information on insurer payments are likely to outweigh any risk that particular groups of doctors

in some locations might use the information to facilitate anticompetitive conduct. Should such

illegal conduct take place, we would, of course, recommend that the Commission take

appropriate enforcement action.4

 

Other Aspects of Insurer Performance

The other aspect of MGMA’s proposed conduct, involving collecting and disseminating

aggregated information about insurers’ referral networks, their rates of claim rejections and

payments times, and physicians’ satisfaction with payers’ responsiveness to questions or

concerns about claims or payments, does not appear likely to promote anticompetitive conduct

by physicians. Because MGMA will not identify individual payers’ performance on any of the

measures, there does not appear to be ground for concern that the information would facilitate

physicians’ collective refusal to deal with any particular payer. 

In addition, the information to be reported does not lend itself to providing clear

benchmarks for physician agreements on terms of dealing with purchasers. Two of the measures

-- physicians’ perception of the adequacy of specialist networks and their satisfaction with

payers claims and payment practices -- deal with subjective and qualitative judgements on those

two issues. This information neither establishes clear benchmarks for what might be deemed

acceptable performance, nor evaluates particular payers based on any benchmarks. The two

additional survey items -- relating to the percentage of commercial fee-for-service claims denied,

partially denied, or returned for correction or additional information, and the percentage of

commercial fee-for-service claims paid within certain time periods (from 30 to 75 days) after

submission -- provide more specific and quantitative data. These data are not reported in ways

that appear likely to encourage agreement on any particular level of purchaser performance in

evaluating or paying claims for use as a minimum level that physicians could accept from a
Gerald Niederman, Esq.

Page 6

payer.

The information may, however, permit physician practice groups to compare the

performance of the payers with which they contract with the overall performance of payers in the

same market, as well as permit individual payers to compare their performance to that of the

market generally. This appears more likely to encourage payers to compete with respect to their

performance on these measure than to prompt physicians’ concerted refusal to deal with

particular payers.

Conclusion

Groups of physicians could, in some situations, use some of the information that MGMA

intends to collect and publish to fix prices or to reach agreements not to deal with certain payers. 

Such agreements would violate the antitrust laws. MGMA’s proposal to publish the information,

however, does not appear to be intended, or inherently likely, to promote express anticompetitive

agreements or tacit coordinated behavior among physicians in their contracting practices. 

Accordingly, the Commission staff has no present intention to recommend enforcement action

regarding MGMA’s proposed information exchange. 

This letter sets out the views of the staff of the Bureau of Competition, as authorized by the

Commission's Rules of Practice. Under Commission Rule § 1.3(c), 16 C.F.R. § 1.3(c), the

Commission is not bound by this staff opinion and reserves the right to rescind it at a later time. 

In addition, this office retains the right to reconsider the questions involved and, with notice to

the requesting party, to rescind or revoke the opinion if implementation of the proposed program

results in substantial anticompetitive effects, if the program is used for improper purposes, if

facts change significantly, or if it otherwise would be in the public interest to do so.

Sincerely yours,

Jeffrey W. Brennan

Assistant Director