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. MCCOL-
LUM, 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.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Antitrust Health Care
Advancement Act of 1996’’.
SEC. 2. APPLICATION OF ANTITRUST RULE OF REASON TO
HEALTH CARE PROVIDER NETWORKS.
(a) RULE OF REASON STANDARD.—In any action
under the antitrust laws, or under any State law similar
to the antitrust laws—
(1) the conduct of a health care provider in ex-
changing with 1 or more other health care providers
information relating to costs, sales, profitability,
marketing, prices, or fees of any health care service
if—
(A) the exchange of such information is
solely for the purpose of establishing a health
care provider network and is reasonably re-
quired for such purpose, and
(B) such information is not used for any
other purpose,
(2) the conduct of a health care provider net-
work (including any health care provider who is a
member of such network and who is acting on behalf
of such network) in negotiating, making, or perform-
ing a contract (including the establishment and
modification of a fee schedule and the development
of a panel of physicians), to the extent such contract
is for the purpose of providing health care services
to individuals under the terms of a health benefit
plan, and
(3) the conduct of any member of such network
for the purpose of providing such health care serv-
ices under such contract to such extent,
shall not be deemed illegal per se. Such conduct shall be
judged on the basis of its reasonableness, taking into ac-
count all relevant factors affecting competition, including
the effects on competition in properly defined markets.
(b) DEFINITIONS.—For purposes of subsection (a):
(1) ANTITRUST
LAWS.—The term ‘‘antitrust
laws’’ has the meaning given it in subsection (a) of
the first section of the Clayton Act (15 U.S.C. 12),
except that such term includes section 5 of the Fed-
eral Trade Commission Act (15 U.S.C. 45) to the
extent that such section 5 applies to unfair methods
of competition.
(2) 
HEALTH
BENEFIT
PLAN.—The 
term
‘‘health benefit plan’’ means—
(A) a hospital or medical expense-incurred
policy or certificate,
(B) a hospital or medical service plan con-
tract,
(C) a health maintenance subscriber con-
tract, or
(D) a multiple employer welfare arrange-
ment or employee benefit plan (as defined
under the Employee Retirement Income Secu-
rity Act of 1974).
Such term includes a contract to provide health care
services under section 1876 or 1903(m) of the Social
Security Act.
(3) HEALTH
CARE
PROVIDER.—The term
‘‘health care provider’’ means any individual or en-
tity that is engaged in the delivery of health care
services in a State and that is required by State law
or regulation to be licensed or certified by the State
to engage in the delivery of such services in the
State.
(4) HEALTH CARE SERVICE.—The term ‘‘health
care service’’ means any health care service for
which payment may be made under a health benefit
plan, including services related to the delivery or ad-
ministration of such service.
(5) HEALTH CARE PROVIDER NETWORK.—The
term ‘‘health care provider network’’ means an orga-
nization that—
(A) is organized by, operated by, and com-
posed of members who are health care providers
and for purposes that include providing health
care services,
(B) is funded in part by capital contribu-
tions made by the members of such organiza-
tion,
(C) with respect to each contract made by
such organization for the purpose of providing
a type of health care service to individuals
under the terms of a health benefit plan—
(i) requires all members of such orga-
nization who engage in providing such type
of health care service to agree to provide
health care services of such type under
such contract,
(ii) receives the compensation paid for
the health care services of such type pro-
vided under such contract by such mem-
bers, and
(iii) provides for the distribution of
such compensation,
(D) has established a program to review,
pursuant to written guidelines, the quality, effi-
ciency, and appropriateness of treatment meth-
ods and setting of services for all health care
providers and all patients participating in such
health benefit plan, along with internal proce-
dures to correct identified deficiencies relating
to such methods and such services,
(E) has established a program to monitor
and control utilization of health care services
provided under such health benefit plan, for the
purpose of improving efficient, appropriate care
and eliminating the provision of unnecessary
health care services,
(F) has established a management pro-
gram to coordinate the delivery of health care
services for all health care providers and all pa-
tients participating in such health benefit plan,
for the purpose of achieving efficiencies and en-
hancing the quality of health care services pro-
vided, and
(G) has established a grievance and appeal
process for such organization designed to review
and promptly resolve beneficiary or patient
grievances and complaints.
(6) STATE.—The term ‘‘State’’ has the mean-
ing given it in section 4G(2) of the Clayton Act (15
U.S.C. 15g(2)).
SEC. 3. ISSUANCE OF GUIDELINES.
Not later than 180 days after the date of the enact-
ment of this Act, the Attorney General and the Federal
Trade Commission jointly shall issue guidelines specifying
the enforcement policies and analytical principles that will
be applied by the Department of Justice and the Commis-
sion with respect to the operation of section 2.
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