California Medical Association

For Your Information


The California Medical Association (CMA) has petitioned the Federal Trade Commission to reopen and modify or set aside a 1979 consent order so that CMA can establish and distribute physician fee schedules in connection with the operation of a subsidiary called California Advantage, Inc., CMA's managed health care subsidiary.

The petition will be subject to public comment for 30 days, until July 12. CMA is based in San Francisco.

The 1979 order settled charges that CMA's publication and dissemination of a relative values study (RVS) had the effect of establishing, maintaining, or otherwise influencing fees charged by physicians. The RVS assigns numerical values to different medical and surgical procedures which could be converted, by physicians, into fee schedules. The order bars CMA and its sub- sidiaries from, among other things, participating in the creation or dissemination of fee schedules relating to physician compensation.

  In April 1985, the FTC modified the consent order to allow the group to participate in discussions with government agencies and third-party payors about health care financing. The Com- mission, however, denied CMA's request that it be allowed to prepare and distribute relative value scales to its physician members.

The petition alleges, among other things, that physician payment schemes have evolved, eliminating the anticompetitive potential of distributing fee schedules to physicians in managed care organizations. Without modification, CMA said, the order severely impairs its ability to establish and operate its contemplated managed care subsidiary.

  Thus, CMA asked the Commission to either set aside the order in its entirety, or to add a paragraph stating that the order does not prohibit CMA from operating a managed care company and disseminating fee schedules to its physician members and other health care providers with whom the managed care company contracts.

  Comments on the petition should be addressed to the FTC, Office of the Secretary, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580.

Copies of the petition, as well as the 1979 order and 1985 modification, are available from the FTC's Public Reference Branch, Room 130, at the same address as above.

(FTC Docket No. C-2967)

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