UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION

In the Matter of

M.D. PHYSICIANS OF SOUTHWEST LOUISIANA, INC.,
a corporation.

File No. 941 0095

AGREEMENT CONTAINING CONSENT ORDER TO CEASE AND DESIST

The Federal Trade Commission ("Commission"), having initiated an investigation of certain acts and practices of M.D. Physicians of Southwest Louisiana, Inc., hereinafter sometimes referred to as "proposed respondent," and it now appearing that proposed respondent is willing to enter into an agreement containing an order to cease and desist from those acts and practices, and providing for other relief,

IT IS HEREBY AGREED by and between proposed respondent, by its duly authorized officer, and counsel for the Commission that:

1. Proposed respondent is a business corporation organized, existing, and doing business under and by virtue of the laws of the State of Louisiana, with its principal place of business in Lake Charles, Louisiana. Its address is P.O. Box 1832, Lake Charles, Louisiana 70602.

2. Proposed respondent admits all the jurisdictional facts set forth in the draft of complaint here attached.

3. Proposed respondent waives:

(a) Any further procedural steps;

(b) The requirement that the Commission's decision contain a statement of findings of fact and conclusions of law;

(c) All rights to seek judicial review or otherwise to challenge or contest the validity of the order entered pursuant to this agreement; and

(d) Any claim under the Equal Access to Justice Act.

4. This agreement shall not become part of the public record of the proceeding unless and until it is accepted by the Commission. If this agreement is accepted by the Commission it, together with the draft of complaint contemplated thereby, will be placed on the public record for a period of sixty (60) days and information in respect thereto publicly released. The Commission thereafter may either withdraw its acceptance of this agreement and so notify the proposed respondent, in which event it will take such action as it may consider appropriate, or issue and serve its complaint (in such form as the circumstances may require) and decision, in disposition of the proceeding.

5. This agreement is for settlement purposes only and does not constitute an admission by proposed respondent that the law has been violated as alleged in the draft of complaint here attached, or that the facts as alleged in the draft complaint, other than jurisdictional facts, are true.

6. This agreement contemplates that, if it is accepted by the Commission, and if such acceptance is not subsequently withdrawn by the Commission pursuant to the provisions of 2.34 of the Commission's Rules, the Commission may, without further notice to proposed respondent, (1) issue its complaint corresponding in form and substance with the draft of complaint here attached and its decision containing the following order to cease and desist in disposition of the proceeding and (2) make information public in respect thereto. When so entered, the order to cease and desist shall have the same force and effect and may be altered, modified, or set aside in the same manner and within the same time provided by statute for other orders. The order shall become final upon service. Delivery by the U.S. Postal Service of the complaint and decision containing the agreed-to order to proposed respondent's address as stated in this agreement shall constitute service. Proposed respondent waives any right it may have to any other manner of service. The complaint may be used in construing the terms of the order, and no agreement, understanding, representation, or interpretation not contained in the order or the agreement may be used to vary or contradict the terms of the order.

7. By signing this agreement containing consent order, proposed respondent represents that the full relief contemplated by this agreement can be accomplished. Proposed respondent has read the proposed complaint and order contemplated hereby. Proposed respondent understands that once the order has been issued, it will be required to file one or more compliance reports showing that it has fully complied with the order. Proposed respondent agrees to comply with Paragraph II of the proposed order from the date it signs this agreement. Proposed respondent further understands that it may be liable for civil penalties in the amount provided by law for each violation of the order after it becomes final.

ORDER

I.

IT IS ORDERED that, for the purposes of this order, the following definitions shall apply:

A."MDP" means M.D. Physicians of Southwest Louisiana, Inc., its directors, officers, employees, agents and representatives, predecessors, successors, and assigns; its subsidiaries, divisions, groups, and affiliates, controlled by MDP, and the respective directors, officers, employees, agents and representatives, successors, and assigns of each.

B."Person" means both natural persons and artificial persons, including, but not limited to, corporations, unincorporated entities, and governments.

C."Payer" means any person that purchases, reimburses for, or otherwise pays for all or part of any health care services for itself or for any other person. Payer includes, but is not limited to, any health insurance company; preferred provider organization; prepaid hospital, medical, or other health service plan; health maintenance organization; government health benefits program; employer or other person providing or administering self-insured health benefits programs; and patients who purchase health care for themselves.

D."Provider" means any person that supplies health care services to any other person, including, but not limited to, physicians, hospitals, and clinics.

E."Reimbursement" means any payment, whether cash or non-cash, or other benefit received for the provision of physician services.

F."Physician" means a doctor of allopathic medicine ("M.D.") or a doctor of osteopathic medicine ("D.O.").

G."Participating physician" means any physician (1) who is a stockholder, owner, or member of MDP; (2) who has agreed to provide services through MDP; or (3) whose services have been offered to any payer through MDP.

H."Qualified risk-sharing joint arrangement" means an arrangement to provide physician services in which (1) the arrangement does not restrict the ability, or facilitate the refusal, of physicians participating in the arrangement to deal with payers individually or through any other arrangement, and (2) all physicians participating in the arrangement share substantial financial risk from their participation in the arrangement through: (a) the provision of physician services to payers at a capitated rate; (b) the provision of physician services for a predetermined percentage of premium or revenue from payers; (c) the use of significant financial incentives (e.g., substantial withholds) for its participating physicians, as a group, to achieve specified cost-containment goals; or (d) the provision of a complex or extended course of treatment that requires the substantial coordination of care by physicians in different specialties offering a complementary mix of services, for a fixed, predetermined payment, where the costs of that course of treatment for any individual patient can vary greatly due to the individual patient’s condition, the choice, complexity, or length of treatment, or other factors.

I."Qualified clinically-integrated joint arrangement" means an arrangement to provide physician services in which (1) the arrangement does not restrict the ability, or facilitate the refusal, of physicians participating in the arrangement to deal with payers individually or through any other arrangement, and (2) all physicians participating in the arrangement participate in active and ongoing programs of the arrangement to evaluate and modify the practice patterns of, and create a high degree of interdependence and cooperation among, the physicians participating in the arrangement, in order to control costs and ensure quality of the services provided through the arrangement.

II.

IT IS FURTHER ORDERED that MDP, directly or indirectly, or through any corporate or other device, in connection with the provision of physician services in or affecting commerce, as "commerce" is defined in Section 4 of the Federal Trade Commission Act, 15 U.S.C. 44, cease and desist from:

A.Entering into, adhering to, participating in, maintaining, organizing, implementing, enforcing, or otherwise facilitating any combination, conspiracy, agreement, or understanding to:

  1. Negotiate on behalf of any participating physicians with any payer or provider;
  2. Deal, or refuse to deal, with any payer or provider; or
  3. Determine any terms, conditions, or requirements upon which physicians deal with any payer or provider, including, but not limited to, terms of reimbursement.

B.Encouraging, advising, pressuring, inducing, or attempting to induce any person to engage in any action that would be prohibited if the person were subject to this order.

PROVIDED that nothing in this order shall be construed to prohibit any agreement or conduct by MDP that is reasonably necessary to form, facilitate, manage, operate, or participate in:

(a)A qualified risk-sharing joint arrangement; or

(b)A qualified clinically integrated joint arrangement, if MDP has provided the prior notification(s) as required by this paragraph (b). Such prior notification must be filed with the Secretary of the Commission at least thirty (30) days prior to forming, facilitating, managing, operating, participating in, or taking any action, other than planning, in furtherance of any joint arrangement requiring such notice ("first waiting period"), and shall include for such arrangement the identity of each participant; the location or area of operation; a copy of the agreement and any supporting organizational documents; a description of its purpose or function; a description of the nature and extent of the integration expected to be achieved, and the anticipated resulting efficiencies; an explanation of the relationship of any agreement on reimbursement to furthering the integration and achieving the expected efficiencies; and a description of any procedures proposed to be implemented to limit possible anticompetitive effects resulting from such agreement(s). If, within the first waiting period, a representative of the Commission makes a written request for additional information, MDP shall not form, facilitate, manage, operate, participate in, or take any action, other than planning, in furtherance of such joint arrangement until thirty (30) days after substantially complying with such request for additional information ("second waiting period") or such shorter waiting period as may be granted by letter from the Bureau of Competition.

III.

IT IS FURTHER ORDERED that MDP shall:

A.Within thirty (30) days after the date on which this order becomes final, distribute by first-class mail a copy of this order and the accompanying complaint to:

  1. Each person who, at any time since January 1, 1993, has been an officer, director, manager, employee, or participating physician in MDP, and
  2. Each payer or provider who, at any time since January 1, 1993, has communicated any desire, willingness, or interest in contracting for physician services with MDP.

B.For a period of five (5) years after the date this order becomes final:

  1. Distribute by first-class mail a copy of this order and the accompanying complaint to each new MDP stockholder, manager, employee, and participating physician within thirty (30) days of his or her initial stock purchase, appointment, employment, or participation, and
  2. Annually publish in any official annual report or newsletter sent to all participating physicians, a copy of this order and the complaint with such prominence as is given to regularly featured articles.

IV.

IT IS FURTHER ORDERED that:

A.Within sixty (60) days after the date this order becomes final, MDP shall submit to the Commission a verified written report setting forth in detail the manner and form in which it intends to comply, is complying, and has complied with Paragraphs II and III of this order.

B.One (1) year from the date this order becomes final, annually for the next five (5) years on the anniversary of the date this order becomes final, and at other times as the Commission may require, MDP shall file a verified written report with the Commission setting forth in detail the manner and form in which it has complied and is complying with Paragraphs II and III of this order.

V.

IT IS FURTHER ORDERED that MDP shall notify the Commission at least thirty (30) days prior to any proposed change in MDP, such as dissolution, assignment, sale resulting in the emergence of a successor corporation, or the creation or dissolution of subsidiaries or any other change in MDP that may affect compliance obligations arising out of this order.

VI.

IT IS FURTHER ORDERED that, for the purpose of determining or securing compliance with this order, and subject to any recognizable privilege, MDP shall permit, upon written request, any duly authorized representative of the Commission:

A.Access, during office hours and in the presence of counsel, to inspect and copy all books, ledgers, accounts, correspondence, memoranda, calendars, and other records and documents in the possession or under the control of MDP relating to any matter contained in this order; and

B.Upon five (5) business days' notice to MDP and without restraint or interference from it, to interview officers, directors, or employees of MDP.

VII.

IT IS FURTHER ORDERED that this order shall terminate twenty (20) years from the date this order becomes final.

Signed this day of , 199 .

M.D. PHYSICIANS OF SOUTHWEST LOUISIANA, INC.

Francis Bride, M.D.
President of M.D. Physicians of Southwest Louisiana, Inc.

COUNSEL FOR FEDERAL TRADE COMMISSION

Rendell A. Davis, Jr.

APPROVED:

David R. Pender
Deputy Assistant Director
Bureau of Competition
Robert F. Leibenluft
Assistant Director
Bureau of Competition
William J. Baer
Director
Bureau of Competition