Announced Actions for November 4, 2003

For Your Information

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Issuance of staff advisory letter: The staff of the Federal Trade Commission has advised Medical Group Management Association (MGMA) that it does not intend to recommend that the Commission challenge MGMA’s plan to conduct and publish the results of a physician survey relating to various aspects of physicians’ relationships with health insurers. MGMA is a professional association that represents medical practice administrators. It has approximately 19,000 members who manage physician practices containing 220,000 doctors throughout the United States.

According to the staff letter, signed by Jeffrey W. Brennan, Assistant Director of the Health Care Services and Products Division of the FTC’s Bureau of Competition, MGMA plans to conduct a survey of insurer payments to medical groups and of medical groups’ satisfaction with certain aspects of their relationships with insurers, including the adequacy of specialty networks, insurers’ rate of denials of claims for services, and the time it takes for insurers to pay for physician services. MGMA will send the initial survey to Colorado family practitioners, general internists, pediatricians, and obstetrician-gynecologists. It will offer the results for commercial sale to interested parties. Among other things, the survey reports will show the distribution of payments by insurers for specific services. MGMA will publish only aggregated information relating to prices paid by all the insurers whose data are reflected in the survey; it will not collect or report information on prices paid by individual, named insurers. If the program is successful in Colorado, MGMA may expand it to other states and specialties.

The survey of insurer payments is similar to an exchange of physician price information, the staff letter noted, and could, in some circumstances, be part of a price-fixing arrangement or could facilitate sellers’ tacit coordination of their competitive behavior. In this instance, however, the staff has concluded that MGMA’s decision to adopt certain safeguards – preventing disclosure of the underlying payment data to physicians, focusing on past or current rather than future payments, publishing only statistics that combine data from at least five respondents, and publishing the information in an aggregated form that prevents disclosure of the prices paid by individual insurers or received by individual physician practices – provides significant protection against use of the information to restrict competition among physicians.

In addition, according to the staff letter, the circumstances of the proposed activity provide no indication that it is likely to encourage restraints on the competitive process, or is intended to do so. The staff letter concludes, therefore, that the potential pro-competitive effects of providing market participants with information on insurer payments are likely to outweigh any risk that particular groups of doctors in some locations might use the information to facilitate anticompetitive conduct. If some doctors use the information illegally to restrict competition, the letter cautions, the staff would recommend that the Commission take appropriate enforcement action.

The staff letter also concludes that MGMA’s plan to collect and disseminate aggregated information about insurers’ referral networks, their rates of claim rejections and payments times, and physicians’ satisfaction with payers’ responsiveness to questions or concerns about claims or payments is not likely to promote anticompetitive conduct by physicians. (Staff contact is Judith A. Moreland, Bureau of Competition, 202-326-2776).

Submission of FTC report to the Senate Special Committee on Aging: The Federal Trade Commission has submitted its most recent Staff Report on Activities Affecting Older Americans to the Senate Special Committee on Aging. The report describes the FTC’s law enforcement initiatives within its consumer protection and competition missions that are of particular importance to older consumers, and highlights the Commission’s consumer education program from September 2001 to August 2003. The FTC staff prepared the report at the request of the Senate Special Committee on Aging, and the report is now available on the FTC’s Web site. The Commission vote to approve the submission of the report was 5-0. (FTC File No. P984904; see related press release dated October 4, 2001.)

Commission approval of final consent order: Following a public comment period, the Commission has approved a final consent order in the matter concerning South Georgia Health Partners, L.L.C. The Commission vote to approve the final consent order was 4-0-1, with Commissioner Pamela Jones Harbour not participating. (FTC File No. 011-0222, staff contact is Steven J. Osnowitz, Bureau of Competition, 202-326-2746; see press release dated September 9, 2003.)

Copies of the documents mentioned in this release are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Call toll-free: 1-877-FTC-HELP.

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