FTC Charges Puerto Rico Endodontists With Price Fixing

The Federal Trade Commission today announced its decision to challenge the Puerto Rico Association of Endodontists, Corp. (PRAE) for coordinating and carrying out agreements among its 30 competing members to set the prices they would charge dental insurance plans, and to refuse to deal with plans that would not accept the collectively determined prices. The FTC’s complaint charged that PRAE’s actions led to higher costs for consumers by hindering competition and restraining trade unreasonably in violation of Section 5 of the FTC Act. In settling the FTC’s charges, PRAE will refrain from engaging in such anticompetitive conduct in the future.

“Competing health care providers cannot collectively bargain or refuse to deal with health insurance plans that reject their terms,” said Jeffrey Schmidt, Director of the FTC’s Bureau of Competition. “By challenging these kinds of anticompetitive practices, the FTC ensures that essential health care services will be available to consumers at prices established in an open, competitive market.”

The FTC’s complaint alleges that in 2003, PRAE’s bargaining efforts resulted in at least five dental plans increasing the fees they paid to PRAE members. The complaint also alleges that in 2004, PRAE sought another rate hike by asking dental plans to allow PRAE members to “balance bill” patients for the difference between agreed upon rates paid by the dental plans and the endodontists’ desired rates. As a cost-containment benefit for consumers, health care plans typically prohibit balance billing by health care providers who contract to provide care for their policyholders. According to the FTC’s complaint, PRAE’s actions were not reasonably related to any financial risk sharing or efficiency-enhancing integration of its members’ practices that would lead to better quality or reduced costs of care.

The Commission’s proposed consent order is designed to remedy the effects of the alleged anticompetitive conduct and prevent its recurrence. It would prohibit PRAE from entering into or facilitating agreements among endodontists to negotiate with any payor on any
member’s behalf; to deal, refuse to deal, or threaten to refuse to deal with any payor regarding any term upon which any member deals, or is willing to deal, with any payor; and not to deal individually with any payor or through any arrangement other than PRAE.

The Commission vote to accept the consent order subject to public comment was 5-0. The Commission is accepting public comment on the order for 30 days, until August 18, after which it will decide whether to make it final. Comments should be sent to: FTC Office of the Secretary, 600 Pennsylvania Ave., N.W., Washington, DC 20580.

NOTE: A consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of $11,000.

(FTC File No. 051-0170)