Joint Ventures

TOPIC INDEX OF HEALTH CARE ANTITRUST ADVISORY OPINIONS
BY COMMISSION AND STAFF

February 10, 2000

Associates in Neurology, Inc., To Robert C. Norton; August 13, 1998. (IPA network composed of eleven neurologists formed to contract with managed care plans).

Phoenix Medical Network, Inc. To William T. Harvey; May 19, 1998. (Physician network of osteopathic services providers formed to contract with third party payers).

Yellowstone Physicians, L.L.C. To David V. Meany, Esq.; May 14, 1997. (Multispecialty physician network joint venture formed to contract with third party payers).

Uronet of Louisiana, L.L.C. To Christopher C. Johnston; January 23, 1996. (IPA network of urologists formed to contract with managed care plans).

Eastern Ohio Physicians Organization, Inc. ("EOPO"). To Stephen P. Nash,Esq.;September 28, 1995. (Multi speciality physician organization established to contract on behalf of its participating physicians with third party payers).

Hematology/Oncology Care Specialists of Western Pennsylvania, P. C. To Stephen P. Nash, Esq.; September 21, 1995. (Physician network of hematology/oncology services providers formed to negotiate with third-party payers).

Otolaryngology Specialty Providers of Georgia. To Thomas W. Rhodes, Esq.; August 15, 1995. (Physician network of otolaryngology services providers formed to facilitate individual contracts among network members and payers).

Northwestern Nevada Orthopaedic Surgery Alliance. To Jacqueline C. Cox; July 11 & 27, 1995. (Physician network of orthopaedic services providers formed to facilitate individual contracts among network members and payers).

Oakland Physician Network, L.L.C. To John A. Cook, Esq.; March 28,1995. (Physician network joint venture composed of primary care physicians formed to market primary and specialty physician services to health benefit plans).

Rocky Mountain Cardiovascular Affiliates. To Neil E. Ayervais, Esq.; September 23, 1994. (Limited liability company composed of physician cardiovascular services practices formed to negotiate and contract with third party payers).

South East Managed Care Organization/Jackson Medical Cooperative. To George Q. Evans, Esq.; July 5, 1994. (Physician network joint venture between physician directed managed care organization and group of physician providers).

ACMG, Inc. To Paul W. McVay, President; July 5, 1994. (Proposed agreement between state medical society and independent health care management and development company to establish society- sponsored state-wide PPO).

California Managed Imaging Medical Group, Inc. To J. Bert Morgan, Esq.; November 17, 1993. (Radiologist-owned PPO network to provide professional radiology services to payers on a regional or statewide basis; letter discusses fee-setting, market power, and limitation of provider panel).

Maryland Medical Eye Associates. To Charles E. Rosolio; May 15, 1987. (Formation, marketing, and operation of a partially integrated professional organization, owned by nine ophthalmologists who are in five separate medical practices, to offer services to HMOs and other groups on a capitation and fee schedule basis).

Pacific International Health, Inc. To Richard C. Greenberg, Esq.; August 28, 1986. (Formation and operation of a provider-controlled PPO; price agreements to be between individual participating physicians and each payer).

Kitsap Physicians Service. To William G. Kopit, Esq.; May 22, 1984, and March 26, 1984. (Proposal by physician-owned IPA/HMO with most of the local physicians as participants to close off access to plan to new/additional physicians).

HMO/IPA. To Gilbert M. Frimet, Esq.; March 22, 1984. (Use by IPA of fee schedule to allocate capitation payment among participating physicians; proposal to require exclusive dealing by IPA members with the IPA).

B. Hospital/Physician Network Joint Ventures

IPA Sponsored PPO. To Martin J. Thompson; June 20, 1991. (Physician IPA network that sponsors a PPO to negotiate prices with hospitals whose services will be marketed as part of the PPO).

Pan American Management Associates. To Robert P. Macina, Esq.; June 27, 1989. (Limited partnership between hospital and physicians to establish a PPO; physicians to be excluded from price negotiations with payers).

California PPO. To Michael A. Duncheon, Esq.; March 17, 1986. (Proposal by PPO composed of multiple hospitals and physician organizations to negotiate contracts with third-party payers).

C. Hospital Network Joint Ventures

Mayo Medical Laboratories. To George A. Cumming, Jr., Esq.; July 17, 1996. (State or regional networks of hospital laboratories providing outpatient laboratory services organized to compete for payer contracts).

D. Other Provider Network Joint Ventures

Northeast Pharmacy Service Corporation. To Paul E. Levenson; July 27, 2000.
(Network of independent pharmacies in Massachusetts and Connecticut offering package of medication-related patient care services to physician groups).]

Orange Pharmacy Equitable Network. To John A. Cronin, Pharm D., J.D.; May 19, 1999. (Network of retail pharmacies and pharmacists offering drug product distribution and disease management services).

Alliance of Independent Medical Services, LLC. To Timothy C. Cashmore; December 22, 1997. (Network of ambulance and ambulette services providers formed to contract for transportation services with third party payers).

New Jersey Pharmacists Association. To Allen Nichol, Pharm. D.; August 12, 1997. (Pharmacist network offering health education and monitoring services to diabetes and asthma patients).

First Look, L.L.C. To James L. Wiant; June 19, 1997. (Network of optical firms organized to respond to requests for proposals for employer contracts for optical and vision services).

Ohio Ambulance Network. To Shawn M. Lyden, Esq.; January 23, 1997. (Network of ambulance and ambulette services providers formed to contract for transportation services with third party payers).

Mobile Health Resources. To John A. Cook, Esq.; January 23, 1997. (Network of ambulance companies formed to contract for transportation services with third party payers).

Southwest Florida Oral Surgery Associates. To Guy E. Whitesman; December 2, 1996. (Cooperative of oral and maxillofacial surgery practices formed to jointly market services to third party payers).

Southern Arizona Therapy Network, Inc. To Martin Janello; December 7, 1995. (Provider network of physical, occupational, and speech therapists organized to facilitate contracts among network members and payers).

Palmetto Dental Alliance. To Scott Y. Barnes, Esq.; September 23, 1994. (Proposed exclusive provider organization to provide dental services to beneficiaries of third party health benefits plans).

E. Other Joint Bidding

California All Health. To William G. Kopit, Esq. and Clifford E. Barnes, Esq.; June 14, 1995. (Joint venture of six health maintenance organizations formed to bid for certain California Medicaid contracts).

Peer Review Organizations of Ohio Foundation. To Larry D. Spencer, Executive Director; April 25, 1984. (Association of nine Professional Standards Review Organizations to bid for contract with HHS to serve as a Peer Review Organization for Ohio under the Medicare program).

II. JOINT PURCHASING ARRANGEMENTS

A. Joint Purchasing By Health Care Providers
: Elmore Community Hospital, Inc. To Derrell O. Fancher; June 20, 1995. (Joint venture between two acute care hospitals for the purchase of certain personnel and other services).
: Louisiana Health Care Ass'n. To Steven E. Adams, J.D., Director of Governmental Relations; April 23, 1982. (Group purchasing agreement for nursing home association's members).
: B. Joint Purchasing by Payers
: Association for Quality Health Care, Inc. To Cecil M. Cheves, Esq.; August 28, 1986. (Association of employers with self-funded health plans to negotiate with providers).
: The Equitable Life Assurance Society. To Jonathan E. Gaines, Esq., V.P. and Counsel; March 26, 1986. (Insurer to enter into contracts with hospitals for DRG-based payment; prices would apply to insurer's own business and would be available to self-funded plans that contract with the insurer for that service).
: Private Healthcare Systems. To Michael L. Denger, Esq.; September 24, 1985. (Proposal by an insurer to develop a proprietary national network of managed health care systems and to function as a joint purchasing agent for commercial health insurers).

III. OTHER JOINT VENTURES

A. Hospital Joint Ventures

Columbine Family Health Center. To Richard J. Sahli; November 8, 1995. (Proposal to add a patient sorting provision to an agreement between an acute care hospital and a rural health care clinic).

Erlanger Medical Center/ Women's East Inc. To Carlos C. Smith, Esq. and Edward N. Boehm, Esq.; May 31, 1995. (Joint venture between two acute care hospitals for establishment of a new hospital specializing in obstetrical hospital services).

B. Insurer/Third-Party Payer PPOs

Association for Quality Health Care, Inc. To Cecil M. Cheves, Esq.; August 28, 1986. (Association of employers with self-funded health plans to negotiate with providers).

The Equitable Life Assurance Society. To Jonathan E. Gaines, Esq., V.P. and Counsel; March 26, 1986. (Insurer to enter into contracts with hospitals for DRG-based payment; prices would apply to insurer's own business and would be available to self-funded plans that contract with the insurer for that service).

Private Healthcare Systems. To Michael L. Denger, Esq.; September 24, 1985. (Proposal by an insurer to develop a proprietary national network of managed health care systems and to function as a joint purchasing agent for commercial health insurers).

*Health Care Management Associates. 101 F.T.C. 1014 (1983). To Irwin S. Smith, M.D., President; June 7, 1983. (PPO organized by an independent intermediary between physicians and payers).

IV. PROVIDER PARTICIPATION IN EXCHANGES OF PRICE AND COST INFORMATION

Business Health Companies, Inc. To Ralph T. Smith, Jr.; October 18, 1996. (Survey of hospital prices by third party consultant).

Dental Consultant Salary Survey. To Samuel D. Dednam, D.M.D.; May 30, 1991. (Survey of salary ranges for certified dental consultants).

American Dental Association. To Peter M. Sfikas, Esq.; February 15, 1990. (Study of establishment of UCR rates by dental insurers and the impact of those rates on consumers' out-of-pocket costs).

North Texas Chapter of the American College of Surgeons. To B. Ward Lane, M.D., President; December 12, 1985. (Survey of members' fees).

American Dental Association. To Peter M. Sfikas, Esq.; August 26, 1985. (Survey of range of dentists' fees in local markets).

Utah Society of Oral and Maxillofacial Surgeons. To Dennis L. Dedecker, D.D.S., Secretary; February 8, 1985. (Survey of range of fees and average fees charged by members).

V. PROVIDERS’ COLLECTIVE PROVISION OF FEE-RELATED INFORMATION

A. Relative Value Schedules/Guides

American Medical Association. To Kirk B. Johnson; dated March 26, 1996. (Dissemination of public information relating to proposed revisions to Medicare’s resource-based relative value scale).

Intracorp. To Sharon B. Donzis, Esq.; March 25, 1988. (Cost- containment service to use physician-developed RVS to determine UCR price screens).

*American Society of Internal Medicine. 105 F.T.C. 505 (1985). To William G. Kopit, Esq.; April 19, 1985. (Development and dissemination of RVG by association of physicians).

B. Fee Review

*American Medical Ass'n. (1994). To Kirk B. Johnson, General Counsel; February 14, 1994. (Professional society peer review of physicians' fees: required physician participation in advisory fee review; medical society discipline for fee-related conduct).

National Capital Society of Plastic and Reconstructive Surgeons. To Robert J. Wilensky, M.D., President-Elect; April 23, 1991. (Physician panel to render advisory opinions regarding fee disputes).

Academy of Ambulatory Foot Surgery. To Andrew K. Dolan, Esq.; July 31, 1987. (Professional association assistance to third-party payers in determining when foot surgery may be restricted to less expensive outpatient settings).

Passaic County Medical Society. To William T. McGuire, Executive Director; January 3, 1986. (Professional society peer review of physicians' fees that is mandatory and binding on the physician).

Tarrant County Medical Society. To Lynn C. Perkins, M.D., President; July 11, 1984. (Medical society advisory fee review program for the voluntary resolution of disputes).

American Podiatry Association. To Werner Strupp, Esq.; March 13, 1984. (Use of HCFA's Medicare fee profile by society as reference aid in reviewing reasonableness of disputed fees).

American Podiatry Association. To Norman Klombers, DPM, Executive Director, and John Grad, Esq., General Counsel, Podiatry Society of Virginia; August 18, 1983. (Professional society advisory peer review of fees, utilization, and quality of care).

*Iowa Dental Ass'n. 99 F.T.C. 648 (1982). To Peter M. Sfikas, Esq.; April 8, 1982. (Voluntary and advisory professional society peer review of dentists' fees).

C. Discussions with Payers

Medical Society of the County of Erie. To James F. Phillips, M.D., President; March 12, 1984. (Medical society discussions with third- party payers regarding fee allowances).

VI. PROVIDERS’ COLLECTIVE PROVISION OF NON-FEE-RELATED INFORMATION

A. Standard Setting Programs

Foundation for the Accreditation of Hematopoietic Cell Therapy. To Paul L Yde; April 17, 1997. (Standard-setting and accreditation program for organizations involved in medical or laboratory practice related to hematopoietic progenitor cell therapy).

Washington Health Care Ass'n. To Stephen J. Maag, Director of Legal and Regulatory Affairs; February 16, 1988. (Nursing home association program to evaluate the quality of care provided by nursing homes).

B. Quality and Utilization Review

Peer Review Organizations of Ohio Foundation. To Larry D. Spencer, Executive Director; April 25, 1984. (Association of nine Professional Standards Review Organizations to bid for contract with HHS to serve as a Peer Review Organization for Ohio under the Medicare program).

American Podiatry Association. To Norman Klombers, DPM, Executive Director, and John Grad, Esq., General Counsel, Podiatry Society of Virginia; August 18, 1983. (Professional society advisory peer review of fees, utilization, and quality of care).

*Rhode Island Professional Standards Review Organization. 101 F.T.C. 1010 (1983). To Edward J. Lynch, Executive V.P.; May 9, 1983. (Physician organization nonbinding peer review for private employers' health benefits programs).

C. Information Sharing

Central Texas Medical Group ("CTMG"). To John P. Dunn, M.D.; September 28, 1995. (IPA whose purpose is to distribute information and educate its members on managed care and community issues)

VII. PROFESSIONAL SOCIETY ACTIVITIES

A. Codes of Ethics

Suffolk County Dental Society. To Steven L. Roberts, DDS, President, and Albert A. Sunshine, DDS, Chairman, Ethics Committee; July 6, 1994. (Legality of "exclusive dental plans"; proposed dental society disciplinary action against dentists sponsoring such plans).

American Society of Cataract and Refractive Surgeons. To Jerald A. Jacobs, Esq.; September 20, 1990. (Advisory advertising guidelines).

American Intra-Ocular Implant Society. To Jerald A. Jacobs, Esq.; October 11, 1985. (Development of standard disclosure protocol for intraocular lens manufacturers who offer inducements to physicians).

North Carolina Chiropractic Ass'n. To Collin M. Haynie, D.C., Chairman, Ethics Committee; February 29, 1984. (Code of ethics provisions regarding advertising, prior approval of advertising, and fee discounts).

*American Academy of Ophthalmology, 101 F.T.C. 1018 (1983). To Jerald A. Jacobs, Esq.; June 17, 1983. (Code of ethics provisions regarding delegation of services to non-physician health care providers, arrangements for postoperative care, use of experimental procedures, and advertising).

B. Other Activities

Maine Medical Ass'n. To Frederick C. Holler, M.D., President; May 14, 1984. (Physician association to urge members to freeze fees or to lower fees by a given percentage).

VIII. OTHER AGREEMENTS

A. Market Allocation

Wichita Area Chamber of Commerce. To F. Tim Witsman, President; May 22, 1991. (Collective allocation by hospitals of services, equipment, or facilities).

B. Exclusive Dealing

HMO/IPA. To Gilbert M. Frimet, Esq.; March 22, 1984. (Use by IPA of fee schedule to allocate capitation payment among participating physicians; proposal to require exclusive dealing by IPA members with the IPA).

*Burnham Hospital. 101 F.T.C. 991 (1983). To Robert E. Nord; February 24, 1983. (Grant to physician group of exclusive right to offer radiology services at a hospital).

C. Potential Barriers to New Entry

Benedictine Health Centers. To Patrick M. Sheller, Esq.; July 10, 1991. (Hospital offer of free office space to newly recruited physicians).

D. Parent Subsidiary Relationships

Community Hospital, Inc. To Darrell O. Fancher; December 22, 1997, (Corporate restructuring of nonprofit hospital corporation).

IX. Robinson-Patman Act

A. Pharmaceutical Pricing Practices

BJC Health System. To Gary Senner; November 9, 1999. (Sale of pharmaceuticals by non-profit hospital system to the system's employees, affiliated managed care program enrollees, and home care subsidiary).

Wesley Health Care Center, Inc. To David A. Ruffo; April 29, 1999. (Sales of pharmaceuticals by non-profit skilled nursing facility to volunteers working at the facility).

North Mississippi Health Services. To Bruce J. Toppin, Esq.; January 7, 1998. (Sales of pharmaceuticals by non-profit hospital to patients of the hospital’s cancer treatment center).

Henry County Memorial Hospital. To Clifton E. Johnson, Esq.; April 10, 1997. (Sales of pharmaceuticals by non-profit hospital to patients of the hospital’s PHO).

North Ottawa Community Hospital. To Sheldon Klein, Esq.; October 22, 1996. (Sales of pharmaceuticals by non-profit hospital to unaffiliated, non-profit hospice).

North Mississippi Health Services. To Bruce J. Toppin, Esq.; October 3, 1996. (Sales of pharmaceuticals by non-profit medical center to retired employees).

Valley Baptist Medical Center. To Daniel L. Wellington, Esq.; September 19, 1996. (Sales of pharmaceuticals by non-profit medical center to medical center operated clinic).

William W. Backus Hospital. To Robert M. Langer, Esq.; June 11, 1996. (Sales of pharmaceuticals by non-profit hospital to related non- profit clinics).

Elkhart General Hospital. To Clifton E. Johnson, Esq.; June 13, 1994. (Sales of pharmaceuticals by non-profit hospital to hospital operated home health care program).

*Presentation Health System. To Tamara D. Lee, Esq.; December 21, 1993. (Sales of pharmaceuticals by non-profit hospitals to related non-profit long-term care facilities).

Unnamed Hospital. To James D. Miller, Esq.; March 31, 1993. (Non-profit hospital purchase of drugs to be dispensed to HMO members and to members of a senior citizens' program).

Oneida City Hospital. To Linus W. Walton, Esq., City Attorney; June 1, 1992. (Sale of prescription drugs by a city-operated hospital to city employees at a price reflecting discounts received by the hospital).

B. Other Products

Independent Video Services. To Bonnie B. Larson, Marketing Manager; January 17, 1990. (Price differences in sale of educational video programs to physicians and hospitals).

Louisiana Health Care Ass'n. To Steven E. Adams, J.D., Director of Governmental Relations; April 23, 1982. (Group purchasing agreement for nursing home association's members).