I 
108TH CONGRESS 
1ST SESSION H. R. 1120
To ensure and foster continued patient safety and quality of care by clarifying 
the application of the antitrust laws to negotiations between groups 
of health care professional and health plans and health care insurance 
issuers. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 6, 2003
Mr. BACHUS (for himself, Mr. CONYERS, Mr. HOEFFEL, Mr. RANGEL, and 
Mr. RAHALL) introduced the following bill; which was referred to the 
Committee on the Judiciary 
A BILL 
To ensure and foster continued patient safety and quality 
of care by clarifying the application of the antitrust 
laws to negotiations between groups of health care pro-
fessional and health plans and health care insurance 
issuers.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; FINDINGS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Health Care Antitrust Improvements Act of 2003’’. 
(b) FINDINGS.—Congress finds the following:
(1) A large number of Americans receive their 
health care coverage from managed health care 
plans. This represents a 10-fold increase over the 
last 20 years. 
(2) The market power of insurance companies 
has increased tremendously since the early 1990’s. 
Since 1995, there have been 321 announced man-
aged care mergers and acquisitions. This unprece-
dented consolidation has provided health plans with 
significant leverage over health care professionals 
and patients in determining the scope, coverage, and 
quality of health care in this country. 
(3) Health plans, because of the concentration 
and exertion of market and economic power, system-
atically and improperly manipulate the practice of 
medicine through such mechanisms as inappropri-
ately making medical necessity determinations, 
down-coding and bundling, knowingly denying and 
delaying payment, and engaging in a variety of prac-
tices that may affect the continuity and quality of 
patient care. 
(4) In 1992, Congress considered legislation ad-
dressing various antitrust issues within the health 
care industry that were problematic for health care 
providers and patients. Most of the legislation was
incorporated into the revised Statements of Anti-
trust Enforcement Policy in Health Care, issued by 
the Department of Justice and the Federal Trade 
Commission in August 1996. While the ‘‘safe har-
bor’’ guidance for physicians contained in the State-
ments was a good first step in addressing this mar-
ket imbalance, it does not provide adequate param-
eters for the roughly 54 percent of self-employed and 
small physician group practices to interact, share in-
formation, and effectively and fairly negotiate with 
health plans. 
(5) The intent of the antitrust laws is to en-
courage competition and protect the consumer, and 
the current per se standard for enforcing the anti-
trust laws in the health care field frequently does 
not achieve these objectives. 
(6) An application of the rule of reason to 
health care professionals’ business activities and 
interactions with health care plans will tend to pro-
mote both competition and high-quality patient care. 
(7) An application of the rule of reason to 
health care professionals’ business activities and 
interactions with health plans will not change the 
professionals’ ethical duty to continue to provide 
medically necessary care to their patients.
SEC. 2. APPLICABILITY OF RULE OF REASON STANDARD. 
In any action under the antitrust laws challenging the 
efforts of 2 or more physicians or other health care profes-
sionals to negotiate with a health plan, the conduct of such 
physicians or health care professionals shall not be deemed 
illegal per se, but shall be judged on the basis of its rea-
sonableness, taking into account all relevant factors affect-
ing competition, including patient access to health care, 
the quality of health care received by patients, and con-
tract terms or proposed contract terms. 
SEC. 3. AWARD OF ATTORNEY’S FEES AND COSTS OF SUIT. 
Notwithstanding sections 4(a) and 16 of the Clayton 
Act (15 U.S.C. 15(a), 26), in any action under the anti-
trust laws brought against a health care cooperative ven-
ture based on its negotiations with a health plan, the court 
at the conclusion of the action shall include an attorney’s 
fee in the award of costs to a substantially prevailing 
plaintiff only if the defendant’s conduct during litigation 
of the claim was frivolous, unreasonable, without founda-
tion, or in bad faith.
SEC. 4. NOTIFICATIONS UNDER ANTITRUST LAW FOR 
HEALTH CARE COOPERATIVE VENTURES. 
(a) NOTIFICATIONS.—
(1) SUBMISSION
OF
NOTIFICATION
BY
VEN-
TURE.—Any party to a health care cooperative ven-
ture (acting on behalf of such venture) that intends,
or has begun, to negotiate with a health plan may 
file with the Attorney General of the United States 
a written notification disclosing—
(A) the identities of the parties to such 
venture, and the name and address of each 
agent representing such venture; 
(B) the identity of each health plan with 
which such venture is or may be negotiating; 
and 
(C) the general nature and objectives of 
the negotiations. 
(2) SUBMISSION OF INFORMATION ON CHANGES 
TO VENTURE.—A health care cooperative venture for 
which a notification is in effect under this section 
shall submit information on any change in the mem-
bership of the venture not later than 90 days after 
such change occurs. 
(3) PUBLICATION
OF
NOTIFICATION.—Except 
as provided in paragraph (4), not later than 30 days 
after receiving a notification with respect to a health 
care cooperative venture under paragraph (1), the 
Attorney General shall publish in the Federal Reg-
ister a notice with respect to such venture that iden-
tifies the parties to the venture, the name and ad-
dress of each agent representing the venture, and
generally identifies the purpose and planned activity 
of the venture. Prior to its publication, the contents 
of the notice shall be made available to the agents 
of the venture. 
(4) RESTRICTION ON DISCLOSURE OF OTHER 
INFORMATION.—All information submitted pursuant 
to notification and all information and documentary 
material obtained by the Attorney General in the 
course of any investigation with respect to a poten-
tial violation of the antitrust laws by the health care 
cooperative venture shall be exempt from disclosure 
under section 552 of title 5, United States Code, 
and shall not be made publicly available by any 
agency of the United States to which such section 
applies except in a judicial proceeding in which such 
information and material are subject to any protec-
tive order. 
(5) WITHDRAWAL OF NOTIFICATION.—Any per-
son who files a notification pursuant to this section 
may withdraw such notification before a publication 
by the Attorney General pursuant to paragraph (3). 
(6) NO
JUDICIAL
REVIEW
PERMITTED.—Any 
action taken or not taken by the Attorney General 
with respect to notifications filed pursuant to this 
subsection shall not be subject to judicial review.
(7) RESTRICTIONS
ON
ADMISSIBILITY
OF
IN-
FORMATION.—
(A) IN
GENERAL.—Any information dis-
closed in a notification submitted under para-
graph (1) and the fact of the publication of a 
notification by the Attorney General under 
paragraph (3) shall only be admissible into evi-
dence in a judicial or administrative proceeding 
for the sole purpose of establishing that a party 
to a health care cooperative venture is entitled 
to the protections described in subsection (b). 
(B) ACTIONS OF ATTORNEY GENERAL.—
No action taken by the Attorney General pursu-
ant to this subsection shall be admissible into 
evidence in any judicial or administrative pro-
ceeding for the purpose of supporting or an-
swering any claim under the antitrust laws. 
(b) PROTECTIONS FOR VENTURES SUBJECT TO NO-
TIFICATION.—
(1) IN GENERAL.—
(A) PROTECTIONS DESCRIBED.—The pro-
visions of paragraph (2) shall apply with re-
spect to any action under the antitrust laws 
challenging conduct within the scope of a notifi-
cation which is in effect pursuant to subsection 
(a)(1). 
(B) TIMING OF PROTECTIONS.—The pro-
tections described in this subsection shall apply 
to a venture, and any party to such venture 
that has made a notification under subsection 
(a)(1) as of the postmarked date of the notifica-
tion. 
(2) LIMITATION
ON
RECOVERY
TO
ACTUAL 
DAMAGES AND INTEREST.—Notwithstanding section 
4 of the Clayton Act, any person who is entitled to 
recovery under the antitrust laws for conduct that is 
within the scope of a notification filed under sub-
section (a) shall recover only the actual damages 
sustained by such person and interest calculated at 
the rate specified in section 1961 of title 28, United 
States Code, for the period beginning on the earliest 
date for which injury can be established and ending 
on the date of judgment, unless the court finds that 
the award of all or part of such interest is unjust 
under the circumstances. 
SEC. 5. TYING ARRANGEMENTS. 
Any rule, policy, agreement, or other action of a 
health plan that has the effect of requiring a health care 
professional to participate in a product, all products, or
product lines offered by the health plan in order to partici-
pate in a particular product or product line, shall be con-
strued to be an illegal tying arrangement under the anti-
trust laws unless the health plan demonstrates that it 
lacks market power in the market for the tying product 
or product lines. 
SEC. 6. DEMONSTRATION PROJECTS ALLOWING HEALTH 
CARE PROFESSIONALS TO NEGOTIATE WITH 
HEALTH PLANS. 
(a) 
ESTABLISHMENT
OF
DEMONSTRATION 
PROJECTS.—The Attorney General, in accordance with 
the recommendations of the advisory committee appointed 
under subsection (b), shall establish demonstration 
projects (in this section referred to as ‘‘projects’’) under 
which health care professionals in the States designated 
as project sites may act together to jointly negotiate con-
tracts and agreements with health plans to provide health 
care items and services for which benefits are provided 
under such health plans. Projects shall be established for 
the purpose of testing various options in the health care 
market to allow negotiations and agreements by health 
care professionals that will enhance efficiency, quality, and 
availability of health care, while promoting competition in 
the health care market.
(b) ADVISORY COMMITTEE.—(1) Not later than 180 
days after the date of the enactment of this Act, the Attor-
ney General shall appoint an Advisory Committee on 
Health Plan Negotiations to advise the Attorney General 
with respect to the carrying out of the Attorney General’s 
functions under this section. The duties of the Advisory 
Committee shall include, but not be limited to, providing 
recommendations regarding implementation and design of 
projects and monitoring and reporting on the impact of 
projects as required under subsection (e). 
(2) The Advisory Committee shall consist of 13 mem-
bers, appointed without regard to the civil service laws. 
Seven members shall be representatives of health care pro-
fessional organizations, 2 of whom shall be self-employed 
physicians (allopathic or osteopathic). The remaining 
members shall have expertise in health care quality, eco-
nomics, or insurance, but at least 1 of such remaining 
members shall be a representative of consumers. 
(3) The Attorney General shall furnish to the Advi-
sory Committee an executive secretary and such secre-
tarial, clerical, and other services as may be necessary to 
conduct its business, and may call upon other agencies of 
the Government for statistical data, reports, and other in-
formation which will assist the Advisory Committee in the 
performance of its duties.
(4) Members of the Advisory Committee, while serv-
ing on business of the Advisory Committee (inclusive of 
travel time), shall be entitled to receive the daily equiva-
lent of the annual rate of basic maximum rate of pay pay-
able from time to time under section 5376 of title 5, 
United States Code, for each day and, while so serving 
away from their homes or regular places of business, may 
be allowed travel expenses, including per diem in lieu of 
subsistence, in the same manner as provided in section 
5703 of title 5, United States Code, for individuals in the 
Government employed intermittently. 
(5) The members shall serve until submission of the 
report pursuant to subsection (e)(2), at which time the 
Advisory Committee shall terminate. A vacancy arising in 
the Advisory Committee shall be filled in the same manner 
as the original appointment is made. A majority of mem-
bers shall constitute a quorum, and action shall be taken 
only by a majority vote of those present and voting. 
(c) APPLICATION FOR STATES TO PARTICIPATE IN 
PROJECTS.—
(1) IN
GENERAL.—Not later than 180 days 
after appointment of the Advisory Committee, the 
Attorney General shall establish, taking into consid-
eration the recommendations of the Advisory Com-
mittee, an application process that shall allow health
care professional organizations to apply for 1 or 
more States to be designated as a site for 1 project 
to be implemented under subsection (d). Such health 
care professional organizations shall be permitted a 
3-month period to submit applications. At the end of 
the 3-month application period, the Attorney Gen-
eral shall have 3 months to designate not fewer than 
6 States in which projects shall be implemented re-
gardless of the number of applications submitted. 
(2) CRITERIA FOR SELECTION.—The Attorney 
General shall determine the States to be designated 
in accordance with the recommendations of the Advi-
sory Committee, and taking into account the level of 
managed care penetration in the particular State, as 
well as other factors that demonstrate a need to ad-
dress unfair negotiations, based upon factual infor-
mation submitted by the applicants or otherwise 
found by the Advisory Committee. The designated 
States shall represent an appropriate environment 
for a study on the imbalance in contractual negotia-
tions between health care providers and health 
plans. 
(d) PROJECT IMPLEMENTATION.—
(1) IN GENERAL.—Not later than 18 months 
after the date of the enactment of this Act the At-
torney General shall implement not fewer than 6 
projects, limited to 1 project in each State des-
ignated under subsection (c) and satisfying subpara-
graphs (A) and (B). 
(A) QUALITY
HEALTH
CARE
COALITION 
DEMONSTRATION.—For not fewer than 3 of 
such States, the following provisions shall apply 
to projects in such States: 
(i) IN
GENERAL.—Notwithstanding 
the antitrust laws (except as provided in 
clause (ii)), health care professionals may 
act jointly to negotiate and enter into con-
tracts and agreements with health plans to 
provide health care items and services for 
which benefits are provided under such 
health plans. 
(ii) LIMITATION.—
(I) NO NEW RIGHT FOR COLLEC-
TIVE CESSATION OF SERVICE.—Clause 
(i) shall not provide health care pro-
fessionals with any new right to par-
ticipate in any collective cessation of 
service to patients not already per-
mitted by existing law.
(II) OTHER
CONDUCT
UNDER 
ANTITRUST
LAW
UNAFFECTED.—
Nothing in this section shall exempt 
from the application of the antitrust 
laws any agreement or otherwise un-
lawful conspiracy that excludes, limits 
the participation or reimbursement of, 
or otherwise limits the scope of serv-
ices to be provided by any health care 
professional or group of health care 
professionals with respect to the per-
formance of services that are within 
their scope of practice as defined or 
permitted by relevant law or regula-
tion. 
(iii) PROTECTION
FOR
GOOD
FAITH 
ACTIONS.—Actions taken by health care 
professionals in good faith reliance on 
clause (i) shall not be subject under the 
antitrust laws to criminal sanctions or civil
damages, fees, or penalties other than ac-
tual damages. 
(B) QUALITY HEALTH CARE COOPERATIVE 
DEMONSTRATION.—For any remaining States
designated under subsection (c), the following 
provisions shall apply to projects in such States: 
(i) IN
GENERAL.—Notwithstanding 
the antitrust laws, any health care profes-
sionals may act jointly to negotiate and 
enter into contracts and agreements with 
health plans to provide health care items 
and services for which benefits are pro-
vided under such health plans. 
(ii) OVERSIGHT.—(I) If the Attorney 
General has reason to believe that 2 or 
more health care professionals have jointly 
engaged in conduct described in clause (i) 
with a health plan, that is intended to sub-
stantially harm both competition and the 
quality of health care received by patients, 
the Attorney General shall serve upon such 
health care professionals a complaint alleg-
ing such conduct. 
(II) The complaint shall accompany a 
notice of hearing to be held not less than 
60 days after the date of service, requiring 
the health care professionals to show cause 
why an order should not be made directing
them to cease and desist from engaging in 
such conduct.
(iii) 
ADMINISTRATIVE
ADJUDICA-
TION.—(I) The Attorney General shall 
make a determination of the charge alleged 
in the complaint based on the record after 
an opportunity for a hearing. 
(II) If the Attorney General deter-
mines that such health care professionals 
have jointly engaged in conduct described 
in clause (i) with a health plan that is in-
tended to substantially harm both competi-
tion and the quality of health care received 
by patients, the Attorney General shall 
issue and cause to be served upon such 
health care professionals, an order reciting 
the facts on which the determination is 
made and directing such health care pro-
fessionals to cease and desist from engag-
ing in such conduct. 
(III) A health care professional ag-
grieved by such determination may com-
mence a civil action in an appropriate dis-
trict court of the United States, not later 
than 60 days after receiving such order,
for review of such determination on the 
record of the Attorney General. 
(IV) As part of the answer to the 
complaint, the Attorney General shall file 
in such court a certified copy of the record 
on which such determination is based. The 
findings of fact of the Attorney General 
may be set aside only if found to be unsup-
ported by substantial evidence in such 
record taken as a whole. 
(iv) JUDICIAL REVIEW.—(I) The dis-
trict courts of the United States shall have 
jurisdiction to review in accordance with 
this subparagraph determinations made 
and orders issued under clause (iii). 
(II) CONTEMPT.—Failure to obey any 
such order may be punished by such courts 
as a contempt thereof. 
(C) NO
EFFECT
ON
TITLE
VI
OF
CIVIL 
RIGHTS ACT OF 1964.—Nothing in this section 
shall be construed to affect the application of 
title VI of the Civil Rights Act of 1964.
(e) MONITORING AND REPORT.—
(1) MONITORING IMPACT.—During the effective 
period of projects implemented under this section,
the Attorney General shall, in accordance with the 
recommendations of the Advisory Committee, closely 
monitor and measure the impact of projects in each 
State on the quality of and access to health care 
services, choice of health plans, changes in health 
plan enrollment, and other relevant factors. The At-
torney General shall, in accordance with the rec-
ommendations of the Advisory Committee, determine 
the criteria for evaluating the impact on the quality 
of health care services. 
(2) REPORT.—Not earlier than 3 years and not 
later than 4 years after commencement of all of the 
projects implemented pursuant to subsection (d), the 
Attorney General shall submit to the Committee on 
the Judiciary of the Senate and the Committee on 
the Judiciary of the House of Representatives 1 re-
port on the progress of all of the projects imple-
mented under this section, including a comparison of 
the matters monitored under paragraph (1) among 
the different designated States and as compared to 
the Nation as a whole. 
(3) PROJECT TERMINATION.—Unless the report 
submitted pursuant to paragraph (2) demonstrates 
by factual evidence that consumers have been 
harmed by a decrease in quality of or access to
health care services as a direct result of a project 
implemented under this section and without any off-
setting benefits, the Attorney General may not ter-
minate such project. Projects that are implemented 
under this section and that are not terminated under 
this paragraph shall be extended by the Attorney 
General to additional States. 
SEC. 7. NO APPLICATION TO FEDERAL PROGRAMS. 
Nothing in this Act shall apply to negotiations, agree-
ments, or other obligations between health care profes-
sionals and health plans that pertain to benefits provided 
under any of the following: 
(1) The Medicare Program under title XVIII of 
the Social Security Act (42 U.S.C. 1395 et seq.). 
(2) The Medicaid Program under title XIX of 
the Social Security Act (42 U.S.C. 1396 et seq.). 
(3) The SCHIP program under title XXI of the 
Social Security Act (42 U.S.C. 1397aa et seq.). 
(4) Chapter 55 of title 10, United States Code 
(relating to medical and dental care for members of 
the uniformed services).
(5) Chapter 17 of title 38, United States Code 
(relating to veterans’ medical care).
(6) Chapter 89 of title 5, United States Code 
(relating to the Federal Employees’ Health Benefits 
Program). 
(7) The Indian Health Care Improvement Act 
(25 U.S.C. 1601 et seq.). 
SEC. 8. DEFINITIONS. 
In this Act, the following definitions shall apply: 
(1) ANTITRUST
LAWS.—The term ‘‘antitrust 
laws’’—
(A) has the meaning given it in subsection 
(a) of the first section of the Clayton Act (15 
U.S.C. 12(a)), except that such term includes 
section 5 of the Federal Trade Commission Act 
(15 U.S.C. 45) to the extent such section ap-
plies to unfair methods of competition; and 
(B) includes any State law similar to the 
laws referred to in subparagraph (A). 
(2) HEALTH PLAN.—The term ‘‘health plan’’ 
means a group health plan or a health insurance 
issuer that is offering health insurance coverage. 
(3) GROUP HEALTH PLAN.—The term ‘‘group 
health plan’’ means an employee welfare benefit plan 
to the extent that the plan provides medical care (in-
cluding items and services paid for as medical care) 
to employees or their dependents (as defined under
the terms of the plan) directly or through insurance, 
reimbursement, or otherwise. 
(4) MEDICAL CARE.—The term ‘‘medical care’’ 
means amounts paid for—
(A) the diagnosis, cure, mitigation, treat-
ment, or prevention of disease, or amounts paid 
for the purpose of affecting any structure or 
function of the body; 
(B) transportation primarily for and essen-
tial to medical care referred to in subparagraph 
(A); and 
(C) insurance covering medical care re-
ferred to in subparagraphs (A) and (B). 
(5) HEALTH INSURANCE COVERAGE.—The term 
‘‘health insurance coverage’’ means benefits con-
sisting of medical care (provided directly, through 
insurance or reimbursement, or otherwise and in-
cluding items and services paid for as medical care) 
under any hospital or medical service policy or cer-
tificate, hospital or medical service plan contract, or 
health maintenance organization contract offered by 
a health insurance issuer.
(6) HEALTH
INSURANCE
ISSUER.—The term 
‘‘health insurance issuer’’ means an insurance com-
pany, insurance service, or insurance organization
(including a health maintenance organization) that 
is licensed to engage in the business of insurance in 
a State and that is subject to State law regulating 
insurance. Such term does not include a group 
health plan. 
(7) HEALTH MAINTENANCE ORGANIZATION.—
The 
term 
‘‘health 
maintenance 
organization’’ 
means—
(A) a federally qualified health mainte-
nance organization (as defined in section 
1301(a) of the Public Health Service Act (42 
U.S.C. 300e(a))); 
(B) an organization recognized under State 
law as a health maintenance organization; or 
(C) a similar organization regulated under 
State law for solvency in the same manner and 
to the same extent as such a health mainte-
nance organization. 
(8) GROUP HEALTH PLAN, HEALTH INSURANCE 
ISSUER.—The terms ‘‘group health plan’’ and 
‘‘health insurance issuer’’ include a third-party ad-
ministrator or other person acting for or on behalf 
of such plan or issuer. 
(9) HEALTH CARE COOPERATIVE VENTURE.—
The term ‘‘health care cooperative venture’’ means 2
or more health care professionals who are engaged 
in negotiations with a health plan, including any at-
tempts to enter into negotiations with a health plan, 
regarding the provision of health care services to in-
sureds, enrollees, or beneficiaries of a health plan. 
(10) HEALTH
CARE
SERVICES.—The term 
‘‘health care services’’ means any services for which 
payment may be made under a health plan, includ-
ing services related to the delivery or administration 
of such services. 
(11) HEALTH CARE PROFESSIONAL.—The term 
‘‘health care professional’’ means any individual or 
entity that provides health care items or services, 
treatment, assistance with activities of daily living, 
or medications to patients and who, to the extent re-
quired by State or Federal law, possesses specialized 
training that confers expertise in the provision of 
such items or services, treatment, assistance, or 
medications. 
(12) HEALTH CARE PROFESSIONAL ORGANIZA-
TION.—The term ‘‘health care professional organiza-
tion’’ means any nonprofit association, society, or 
organization whose membership consists of health 
care professionals.