Court Opinion

ID: 9472725
Source: CourtListenerOpinion
Date Created: 2023-08-05 04:08:24.461549+00
Date Added: 2024-06-11T17:43:05.713295
License: Public Domain

FAIRCHILD, Senior Circuit Judge,
concurring in result.
This case deals with a significant problem in the operation of group dental insurance in Indiana. The insurance companies have contracted with employers to pay dental bills incurred by employees. The insurer’s obligation is limited, however, by the standard of “least expensive adequate course of treatment.” An opportunity to examine an x-ray in connection with a claim for services already rendered or pre-autho-rization of a course of treatment aids the insurer in determining the amount of its obligation to pay, and serves the interests of both insurer and employer in keeping costs under control. Employee patients have an interest in prompt and full payment of their dental bills, as well as in the quality of care. Dentists have an interest in being paid for their service, as well as in freedom to exercise professional judgment in prescribing treatment.
There is little question that the Indiana Dental Association organized boycott of insurers’ requests for x-rays had a significant economic impact on the functioning of *1145group dental plans within Indiana. In 1974 IDA’s membership included 85 to 88 percent of licensed dentists in Indiana. IDA’s recommendation to its members to refuse to submit x-rays began as early as 1972 and achieved widespread compliance particularly in those counties where IFD would later form chapters. IDA’s boycott forced group insurers to withdraw requests for the mailing of x-rays or face growing backlogs in patient claims. The experience of Aetna Insurance Company, provides an example. Aetna contracted to provide dental coverage to International Harvester employees in 23 states and several foreign countries. The Commission found that:
Only in Indiana did Aetna experience any difficulty in obtaining x-rays for review of dental treatments. Within one year, there was a backlog of approximately 600 unpaid claims, because of Aetna’s inability to verify the maximum allowable benefits. In a one-time effort to eliminate this backlog, the company’s dental consultant visited the offices of all the dentists who had refused to submit x-rays and reviewed the claims with them, also urging them to submit x-rays in the future. There were two general reactions to his plea: “one, dentists who said despite the fact that you seem fair, I will not send x-rays to you; and others who said I would like to, but I don’t dare to.” In January, 1974, Aetna’s consultants began doing in-mouth examinations of claimants in its Ft. Wayne office; they continued this practice until the end of November, 1978. In that period, the company conducted 4,700 exams at an estimated cost of ten dollars each. (Transcript references omitted.)
By 1976 some leaders of the IDA inspired boycott became concerned that antitrust entanglements would begin to hinder IDA’s already prolonged efforts to force group dental insurers to cease requesting submission of x-rays. These individuals decided to form a “dentist union” that they hoped would give dentists “more muscle” in negotiations with insurance carriers and be immune from antitrust liability. In August 1976 IFD was formed with members in at least six Indiana counties.
After formation, IFD actively encouraged its members to continue the IDA boycott. The record shows that companies operating dental insurance plans in counties with high IFD membership continued to face substantial resistance to requests for x-rays as late as January 1977.
Even viewing the IFD group independently of the IDA background, the size of IFD membership in a number of Indiana counties gave IFD the power to frustrate to a significant extent the insurers’ need to review x-rays in those counties without going to exorbitant expense.
The substantial problem posed to the insurers by the concerted refusal to supply' x-rays is clear. The difficult questions arise from the application of antitrust doctrine.
The underlying issue is the fairness of the practice of refusal, principally as it impacts insurers, but also as it affects employers and employee-patients. The complaint alleged that the concerted refusals were unfair acts or practices. The FTC acknowledged that the record contained some evidence of consumer injury, but noted that neither the parties nor the AU had analyzed the issue of unfairness liability and declined to decide it. The FTC also concluded under the unfair methods of competition allegation a per se analysis is inappropriate, and that it must, under the rule of reason, examine the nature, purpose, and effect on competition of the concerted refusals.
Also acknowledging an argument by complaint counsel that the dentists’ concerted action may have caused reduced competition among insurers, the FTC declined to make that finding. The FTC did find that the concerted refusals substantially limited competition among dentists. Thus the inquiry must be focused on competition among dentists, and whether concerted refusal to furnish x-rays to insurers curtails such competition.
*1146I join in the result reached by the court, vacating the FTC order, because I conclude that the FTC analysis of the effect of the concerted refusal on competition among dentists is deficient.
Conceivably a dentist’s willingness or unwillingness to supply x-rays to an insurer may be significant to an employee in choosing his dentist. Assuming that a prospective patient is aware of the practice of particular dentists in refusing or supplying x-rays, and the significance that refusal or cooperation may have to the patient’s interest, he may choose one dentist over another. Presumably a patient would consider cooperation desirable because the bill would be paid more promptly. The IFD, however, might argue that refusal is an advantage to a patient because a dentist who decides to refuse puts a value on preserving his independent judgment of the patient’s needs.
Pretty clearly, no evidence was developed on the validity of an assumption that a dentist’s policy of refusal or cooperation has any significance in competition among dentists, and the FTC decision fails to analyze the proposition. It may well be that evidence could be produced to support a finding that this policy is really an element of competition among dentists and that a concerted policy of refusal does work a real injury to competition. 'But this analysis has not been made.
This deficiency is the reason I join in the court’s result. There is much in the opinion in which I do not join, particularly in the repeated assertion that the concerted refusal resulted from a legal, moral and ethical policy of quality dental care and complied with established, accepted, and approved standards of such care. The relevance of these assertions is not clear. Insofar as they imply a finding that legal, moral and ethical considerations and approved standards were the sole cause of the concerted policy, they are in conflict with a clearly and adequately supported finding of the FTC of an economic motive.
The FTC said:
Moreover, it is clear that the concern of IDA’s members over possible interference in the doctor-patient relationship was not limited to the effect such interference might have on patient welfare. It also extended to issues of professional pride and the economic well-being of Indiana dentists. Dr. McClure, who later became the first president of IFD, said in a speech to the association’s Council on Dental Care Programs in 1974: “We are fighting an economic war where the very survival of our profession is at stake. * * * The name of the game is money. The government and labor are determined to reduce the cost of the dental health dollar at the expense of the dentist. There is no way a dental service can be rendered cheaper when the third party has to have its share of the dollar.”
With the formation of IFD, the economic motive became more explicit.