OFTACOOP organized a boycott to defeat health plan’s attempt to control costs, FTC alleges
OFTACOOP, a Puerto Rico ophthalmologist cooperative, has agreed to settle Federal Trade Commission charges that its actions harmed competition.
The complaint charges that OFTACOOP – also known as Cooperativa de Médico Oftalmólogos de Puerto Rico – unlawfully orchestrated an agreement among competing ophthalmologists to refuse to deal with a health plan, MCS Advantage, Inc., and its network administrator, Eye Management of Puerto Rico, LLC.
OFTACOOP’s concerted refusal to deal forced MCS to abandon its plan to engage Eye Management to create a lower-cost network of ophthalmologists. MCS was also forced to maintain its then-current reimbursement rates paid to ophthalmologists. According to the complaint, OFTACOOP restrained competition without any justification, in violation of federal antitrust law.
OFTACOOP has about 100 member ophthalmologists. MCS provides healthcare services to enrollees of its Medicare Advantage plans, and must offer a network with a sufficient number of physicians to provide its enrollees with adequate access to healthcare services.
The complaint alleges that, in an effort to lower its costs after Medicare reduced its premiums, MCS asked Eye Management to create and manage a network of ophthalmologists in Puerto Rico. In response to letters from MCS and Eye Management to individual doctors offering lower rates for the new network, OFTACOOP urged ophthalmologists to refuse to sign the proposed contract and to unite in refusing to deal with Eye Management. In August 2014, Eye Management informed MCS that it had been unable to form an adequate network of ophthalmologists. The ophthalmologists then refused to contract directly with MCS at lower rates thereby forcing MCS to maintain its current reimbursement rates.
The proposed consent order prohibits OFTACOOP from entering into or facilitating agreements between or among ophthalmologists:
- to refuse to deal, or threaten to refuse to deal, with any payor regarding any term, including price terms, or
- not to deal individually with any payor, or not to deal with any payor other than through OFTACOOP.
The order also prohibits information exchanges to facilitate any prohibited conduct, and it bars any attempts to engage in any prohibited conduct. OFTACOOP is also barred from encouraging, suggesting, advising, pressuring, inducing, or trying to induce anyone to engage in any prohibited conduct.
The Commission vote to issue the complaint and accept the proposed consent order was 3-0. The FTC will publish the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through Feb. 21, 2017, after which the Commission will decide whether to make the proposed consent order final. Comments can be filed electronically or in paper form by following the instructions in the “Supplementary Information” section of the Federal Register notice.
NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. 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 up to $40,000 per day.
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