Access of Dr.'s 2 HMO.: Antitrust & Prov'er Network

Antitrust

  1. Promote Competition in Mkt, Not Indiv.
  2. Sherman (S) Act: 1 Reqts
    1. Combo, conspiracy, / K
      1. Can't have 1 person b/c need jt. / collusive activity
      2. Med. staff is combo of dr.'s / sep. econ. units
      3. In CA, hosp. can conspire w/med. staff
        1. Med. staff is self gov'ing
        2. Bd. can't w/hold consent 2 change bylaws of med staff
    2. Interstate commerce
    3. Any unrsbl restraint of trade by agmt viol's
      1. Per se test
        1. Inherently anti-comp. so not look @ impact on comp.
          1. Price fixing / jt'ly dec. 2 set / change price
          2. Boycott / jt'ly agree not 2 do busi. w/partic. busi.
          3. Tying
            1. Seller refuses 2 sell tying prod. unless buyer also buys tied prod.
            2. Now consid. under rule of rsn
        2. But quality of care defense can arise 2 apply rule of rsn
      2. Rule of rsn / balancing test 2 see if impact is pro-comp. benefits > anti-comp. effects
        1. P must prove D has mkt pwr / comp'ors ability 2 raise price above comp. levels by def'ing
          1. Relev. prod. mkt
            1. Prod. which have rsbl interchangeability 4 1 another 4 purpose of which it's prod.'ed
            2. Consid. price, use, quality
          2. Relev. geog. mkt
            1. Area of effective comp. where seller operates & 2 which buyer can pract.'ly turn 4 supplies
            2. If change in price not create subst'l change in quantity of prod. sold in other areas
  3. S Act: 2 Reqts
    1. Prohibit Monopolization & Attempt 2 Monopolize
      1. P must prove D had suff. mkt pwr 2 excl. comp. / control price +
        1. Relev. prod. mkt
        2. Relev. geog. mkt
      2. Willful acq. / maint. of mkt pwr by illegit. busi. pract.'s
  4. Avoiding Antitrust Viol's
    1. HCQIA: Antitrust Immunity
      1. Broad Immunity But Applied Lots 4 Antitrust
      2. Reqts
        1. Prof'l rev. is stand. of 42 USC 11112
          1. Axn taken in rsbl belief it was in furtherance of quality healthcare
            1. D has rebuttable presumption
            2. Trigger of peer rev. when any activity 2 change priv.'s / det. if have priv.'s
          2. Must have been rsbl effort 2 get facts of matter before axn
          3. D /P process of adq. notice & hrg
            1. Safe harbor
              1. Notice of charge & discl.
              2. Adeq. X 2 present case
              3. Rsns 4 proposed axns
              4. X limit
              5. Summary of rts
            2. If dif., can scrutinize 2 see if fair & gave adeq. D/P
          4. Final axn taken in rsbl belief that axn was warranted by facts
        2. Result of prof'l rev. axns properly reported 2 state auth's
        3. Prof'l rev axn after 11/14/86
    2. Excl. K & Closing Dept
      1. Excl. K
        1. Foreclose dr.'s from exercising priv.'s in facility
        2. Hosp. can make q-legis. dec. 4 pub. int. & improve quality
      2. Subst. of closing dept
        1. Can only close 4 legit. quality rsns
      3. Proced. of closing dept
        1. Hosp. must have task force
          1. Make legit. inquiry 2 det. if quality issues exist
          2. Create adm. record demo'ing by interviewing
        2. Some form of D/P hrg in CA
          1. Process 4 notice of dec. & opp. 2 comment
          2. Can B written comment per. / open hrg.
        3. Task force's concl. must B supported by adm. record
      4. Conseq. of closing dept.
        1. Hosp. not have 2 give D/P hrg. 2 indiv. dr's when term'ing excl. K'or
        2. Hosp. still need 2 give D/P hrg
          1. To excl. K'or if med. disciplinary axns taken
          2. To subK'or dr.'s if revoke subK'or dr's through indep. med. staff axns
        3. If excl. K'or term. subK'or dr's 4 med. discip. rsn, give D/P rts if 25 / more excl. K'ors
      5. Med Staff Bylaws
        1. One case says it's binding K btwn bd. & med. staff

Prov'er Network: Physician Network

  1. Indep. Dr's Get Together 2 Barg. W/HMO
    1. Possible S Act 1 Claims Arise
      1. Naked price fixing by competitors is per se viol. unless
        1. Share subst'l fin.'al risk /
        2. Demo. creation of new prod.
  2. IPA
    1. Prof'l Corp.
      1. All SH's R partic.'ing Dr.'s
      2. K w/HMO
    2. Share Subst'l Fin.'al Risk in Payments
      1. HMO pays capitated pay 2 IPA w/o w/hold
      2. IPA pays partic.'ing dr.'s capitated pay w/ w/hold / fee 4 serv. w/ w/hold
  3. Avoiding S Act Claims
    1. Subst'l Fin.'al Risk OR
      1. Capitation arr.
      2. Discounted fee 4 serv. w/ w/hold 4
        1. Hosp.
        2. Specialists
        3. Pharm. utilizations
      3. Antitrust Safety Zones of 1996
        1. Revenue Sharing
          1. Network prov. specif.'ed serv. 2 health plan 4 predet.'ed % of premium of enrollees
        2. Targets
          1. Network est. cost / utilization targets 4 network as whole +
          2. Ties compensation of partic.'ing dr.'s 2 those targets
        3. Case rates / global fees
          1. Network uses fixed predet.'ed payments 4 complex extended course of treatment by variety of spec.
    2. Clinical Integ.
      1. Recog. that can achieve eff. & pro-comp. besides subst'l fin.'al risk
      2. Dr.'s share quality & utilization data 2 incr. quality & lwr utilization
      3. If clinically integ.'ed, then rule of rsn
        1. Jt. utilization rev. & QA prog.'s
        2. Dev. & implement credential stand.
        3. Sig. investment in network infrastructure
      4. Serv's prov'ed by network, not indiv. dr.'s
    3. Antitrust Safety Zones
      1. Excl. dr. jt. venture / network
        1. If not have more than 20% of Dr.'s in any spec. of geog. mkt w/active hosp. staff priv. +
        2. Share subst'l fin.'al risk
      2. Nonexcl. jt. venture
        1. If not have more than 30% of Dr.'s in any spec. of geog. mkt w/active hosp. staff priv. +
        2. Share subst'l fin.'al risk
      3. If not meet the zones, rule of rsn 2 show pro-comp. effect by factors
        1. What kind of good
        2. Cost savings passed on 2 consumers
        3. Other eff.'s
        4. Any pro-comp. benefits like low prices / mkt shares
        5. 3rd party payers can readily switch if network incr's prices
        6. Other barriers 2 entry of mkt place
        7. Excl. v. nonexcl. venture
    4. State Axn Immunity
      1. State must have stt. / other scheme which clearly articulates state policy of reg.'ing that activity +
      2. State actively supervise challenged activity

This material is copyrighted by the author. Use of the material for profit is strictly prohibited without the written permission from the author.

May 6, 1997

Ms. Haeji Hong

Go Back to Law School Notes
1