Reforming Physician Payment Report of a Conference (1984) / Chapter Skim
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Antitrust and Physician Payment
Antitrust and Physician Payment
Pages 75-86
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From page 75... ...
The Origins and Elements of Antitrust Analysis Historical Underpinnings Every society must order its economic activity according to a basic framework. Despite a heavy overlay of government regulation, the United States economy is based on the price system and competition.
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From page 76... ...
The English Crown also engaged in granting monopolies as a means for raising revenue. Restraints on trade became so ubiquitous and burdensome that the English Parliament in 1623 enacted the Statute of Monopolies which invalidated all monopolies with exceptions for patents on new inventions, some monopolies granted by towns and guilds to establish more orderly trade relationships, and Parliamentary grants.3 English Common Law conspiracy doctrines influenced the prohibitions against unlawful conspiracies found in current antitrust statues.
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From page 77... ...
Members of this latter group felt that the Sherman Act was too general in its scope to provide adequate protection from unfair trade practices and that the Attorney General was not sufficiently insulated from political pressure to vigorously enforce a statute which often ran counter to strong business interests.7 The Federal Trade Commission Act prohibits Funfair methods of competition. and Funfair or deceptive acts or practices.
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From page 78... ...
adopted by the Supreme Court more than 70 years ago, is the principle that still guides judges today in antitrust cases. However, it is a somewhat vague standard and it leads to extensive factual analysis, including costly economic studies.
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From page 79... ...
Ethical rules that have the purpose and effect of prohibiting false or deceptive advertising are another example of permissible, in fact highly desirable, self-regulation. Insofar as health and other professional services markets are truly unique, traditional antitrust analysis is suff iciently flexible to take such conditions into account in considering whether a particular practice has had an unreasonably anticompetitive effect.
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From page 80... ...
The Justice Department and the Federal Trade Commission saw the relationship between relative value studies and the illegal pricing formulas used by other industries to set prices, and enjoined them or obtained consent decrees governing their future development and use. More recently, however, a federal district court rejected the argument that a relative value study was a form of pr ice-f ixing that constitutes a per se violation of the Sherman Act20.
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From page 81... ...
While considerable ambiguity continues to exist concerning the scope of this exemption, the Supreme Court' s decisions make it clear that it, like all exemptions f ram the ant it rust laws, wi 11 be na ~ rawly cons t rued . For several years, the commercial health insurance companies have asserted that they are unable to compete effectively with Blue Cross/Blue Shield plans in most markets because their market shares are too small for them to bargain aggressively with hospitals or other providers.
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From page 82... ...
insurers or other third party payers contract with a panel of providers to furnish services; 2) negotiated fee schedule (normally discounted f ram what the provider usually charges)
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From page 83... ...
Maricopa tells us that simply performing certain administrative functions, such as peer review and claims adjustment, does not take joint price setting activities out the per se category of antitrust violat ion. Summary and Conclusions The antitrust laws do impose limits on the ability of physicians to engage in joint fee setting and from employing unfair tactics to discourage or penalize competitors.
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From page 84... ...
gleam in someone's eye. As in other antitrust matters, the following concerns and questions will be addressed if any of the new payment methods are subjected to antitrust scrutiny: What are the probable effects of the challenged practice?
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2. See Letwin, The English Common Law Concerning Monopolies, 21 U
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From page 86... ...
19. The states of Ohio and West Virginia brought and settled cases to end medical control of Blue Shield plans.
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