FTC Staff Have Advised a Group of New Orleans Urologists that Group's Plan to Establish a Urology Services Network Does Not Appear to Violate Antitrust Laws.

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Staff of the Federal Trade Commission have advised a group of urologists in the News Orleans area that the group's plan to establish a network to provide urology services does not appear to violate the antitrust laws. URONET of Louisiana, L.L.C. (URONET), which plans to contract with managed care companies to provide services on a capitated basis, will be an independent physician association owned by and composed of 19 urologists -- approximately 22 percent of the urologists who practice in the New Orleans metropolitan and surrounding area. Three additional urologists might be non-member participating providers under some contracts.

Membership in URONET will be non-exclusive; members and participants may participate in other networks, and virtually all member-owners currently participate in a variety of managed care plans, including health maintenance organizations. Contracts are to be negotiated by an entity acting as an agent for URONET, and will be approved and presented to members by URONET's medical director who is a member/owner elected by the other members. Members will decide individually whether to participate in any contract, and participation in a particular contract is not required.

In response to the letter from attorneys for URONET requesting the advisory opinion, the FTC staff, in a letter signed by Robert F. Leibenluft, Assistant Director for Healthcare at the FTC, noted that under Statement 8 of the Statements of Antitrust Enforcement Policy and Analytical Principles Relating to Health Care and Antitrust, jointly issued by the Commission and the Department of Justice, the federal antitrust enforcement agencies will not challenge, absent extraordinary circumstances, "a non-exclusive physician network joint venture comprising 30 percent or less of the physicians in each physician specialty with active hospital staff privileges who practice in the relevant geographic market and share substantial risk."

The members and participants of URONET will share substantial financial risk through the acceptance by URONET of capitated contracts; they comprise less than 30 percent of the urologists practicing in the area; and participation is non-exclusive. Accordingly, the proposed operation of the network appears to fall within the terms of the safety zone, according to FTC staff.

NOTE: This letter sets out the views of the staff of the FTC's Bureau of Competition, as authorized by the Commission's Rules of Practice. It has not been reviewed or approved by the Commission. As the Commission's rules explain, the staff's advice is rendered "without prejudice to the right of the Commission later to rescind the advice and, where appropriate, to commence an enforcement proceeding." Staff advice concerning issues covered by the FTC/DOJ Health Care Policy Statements will be given within 90 or 120 days (depending on the topic) after all necessary information is provided.

Copies of the letter are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC's World Wide Web site at: http://www.ftc.gov