Is Your Physician Organization Complying with Antitrust Law?

It is not uncommon for a physician organization to act as an intermediary between its physician participants and third-party payers to facilitate the negotiation and acceptance of reimbursement rates and other payer contract terms. However, when facilitation becomes negotiation and a PO accepts contracts with third-party payers on behalf of physician participants, also known as “single-signature contracting,” a PO may be unintentionally engaging in illegal “price-fixing” in violation of antitrust law. Under Section 1 of the Sherman Act, it is illegal to engage in horizontal price fixing arrangements. This includes circumstances where PO physician participants, who are otherwise competitors in the market, collectively agree or disagree to a third-party payer’s terms. As a result, if a PO negotiates and unilaterally accepts or rejects rates on behalf of all its physician participants, it must proceed with caution and comply with Section 8 of the Department of Justice and Federal Trade Commission in their Statements of Antitrust Enforcement Policy in Health Care. SAFETY ZONES Single-signature contracting is not always a violation of antitrust law. The DOJ and FTC (the “Agencies”) specifically outline “safety zones” by which such conduct is permitted, provided that there are no extraordinary or unusual circumstances involved with respect to the arrangement. Such safety zones include: Exclusive Networks: Exclusive POs are those where the PO’s physician participants are restricted in their ability to, or do not in practice,...

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