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

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May 6, 1997

Ms. Haeji Hong

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