An association representing 900 physicians in the Amarillo area has agreed to a Federal Trade Commission order barring it from jointly negotiating the prices it charges insurance providers, according to a news release.
The FTC alleged in a complaint filed with the order that Southwest Health Alliances, Inc. and BSA Provider Network, a division of Baptist St. Anthony’s Health System, has violated federal law since 2000 by fixing the prices its member doctors would charge insurers. This led to higher prices for consumers and businesses.
The FTC order settling the charges prohibits Southwest Health from similar conduct in the future. The association also is settling similar charges brought by the Texas Attorney General’s office.
Southwest Health is an independent practice association consisting of multiple, independent medical practices with approximately 900 physician members – 300 of whom provide primary care services – in the Amarillo area.
According to the FTC’s complaint, since at least 2000, the network has restrained competition by entering into and implementing agreements to fix the prices and terms at which it would contract with health plans, and has collectively negotiated the terms and conditions under which it would deal with health plans. The FTC contends that the agreements eliminated competition and harmed consumers by increasing prices for physician services.
Collective price negotiation and agreements between IPAs and health care providers may be justified under some circumstances. For example, if an IPA clinically or financially integrates its members’ practices, this may create efficiencies that justify joint price negotiations. However, because Southwest Health’s doctors undertook no such integration, the agreements produced no beneficial efficiencies for consumers.
In 2007 the Antitrust Division of the Attorney General’s office launched a civil investigation into the BSA Provider Network, according to previous Amarillo Globe-News reports. At question was whether BSA’s business practices had reduced competition among area doctors. The Antitrust Division sent letters to at least two Amarillo doctors in November 2007 asking for documents related to their settlement of a civil lawsuit with BSA. Amarillo orthopedic surgeons Bill Barnhill and Robert Higgins sued BSA and its provider network in December 2004 for removing them from its insurance program. The surgeons were two of 17 partners in a physician-owned competitor, Physicians Surgical Hospital at Quail Creek.
The civil suit, filed in Potter County’s 181st District Court, was dissolved in May 2007 when BSA merged with the surgery center. BSA owns 51 percent of the renamed BSA Panhandle Surgical Hospital at 7100 W. Ninth Ave.
BSA Settles Charges – http://amarillo.com/news/local-news/2011-05-11/bsa-settles-charges
Editor’s Note: Molly Mulebriar reports that she attended a meeting in the Lower Rio Grande Valley several years ago wherein it was discussed among health care providers to negotiate increased PPO reimbursments in return for steerage to a local hospital. Mulebriar notes that this practice is not isolated to the Amarillo area.