UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
- Robert Pitofsky, Chairman
- Sheila F. Anthony
- Mozelle W. Thompson
- Orson Swindle
In the Matter of
MESA COUNTY PHYSICIANS INDEPENDENT PRACTICE ASSOCIATION, INC., a
DOCKET NO. 9284
DECISION AND ORDER
The Commission having heretofore issued its complaint charging the respondent named in
the caption hereof with violation of Section 5 of the Federal Trade Commission Act, as
amended, and the respondent having been served with a copy of that complaint, together
with a notice of contemplated relief; and
The respondent, its attorneys, and counsel for the Commission having thereafter
executed an agreement containing a consent order, an admission by the respondent of all of
the jurisdictional facts set forth in the complaint, a statement that the signing of said
agreement is for settlement purposes only and does not constitute an admission by
respondent that the law has been violated as alleged in such complaint, or that the facts
as alleged in such complaint, other than jurisdictional facts, are true and waivers and
other provisions as required by the Commission's Rules; and
The Secretary of the Commission having thereafter withdrawn this matter from
adjudication in accordance with § 3.25(c) of its Rules; and
The Commission having considered the matter and having thereupon accepted the executed
consent agreement and placed such agreement on the public record for a period of sixty
(60) days, and having thereafter determined to modify the order contained in that consent
agreement by adding Paragraphs I.J, I.K, I.L, and II.F, and to issue an amended complaint
to accompany that modified order, now in further conformity with the procedure prescribed
in § 3.25(f) of its Rules, the Commission hereby makes the following jurisdictional
findings and enters the following order:
1. Respondent Mesa County Physicians Independent Practice Association, Inc., is a
corporation organized, existing, and doing business under and by virtue of the laws of the
State of Colorado, with its office and principal place of business located at 751 Horizon
Court, Suite 256, Grand Junction, Colorado 81506.
2. The Federal Trade Commission has jurisdiction of the subject matter of this
proceeding and of respondent, and the proceeding is in the public interest.
IT IS ORDERED that, for the purposes of this order, the following definitions shall
- A. "Mesa IPA" means Mesa County Physicians I. P. A., Inc., its directors,
officers, employees, agents and representatives, predecessors, successors, and assigns;
its subsidiaries, divisions, groups, and affiliates controlled by Mesa IPA, and the
respective directors, officers, employees, agents and representatives, successors, and
assigns of each.
- B. "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
- C. "Person" means both natural persons and artificial persons, including, but
not limited to, corporations, unincorporated entities, and governments.
- D. "Physician" means a doctor of allopathic medicine
("M.D.") or a doctor of osteopathic medicine ("D.O.").
- E. "Participating physician" means any physician (1) who is a stockholder,
owner, or member of Mesa IPA; (2) who has agreed to provide services through Mesa IPA; or
(3) whose services have been offered to any payer through Mesa IPA.
- F. "Provider" means any person that supplies health care services to any other
person, including, but not limited to, physicians, hospitals, and clinics.
- G. "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
- H. "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.
- I. "Reimbursement" means any payment, whether cash or non-cash, or other
benefit received for the provision of physician services.
- J. "Payer contract" means any contract, whether actual or proposed, offered by
any payer to any physician.
- K. "Payer contract review" means any activity, other than a qualified
risk-sharing joint arrangement or a qualified clinically integrated joint arrangement, in
which information concerning the terms or conditions of a payer contract is transmitted to
a physician practicing in Mesa County and in which such activity
1. facilitates collective decision-making among physicians,
2. coordinates physicians' responses to a payer contract,
3. disseminates to physicians the views or intentions of other physicians as to a payer
4. includes expressions of opinion as to whether the terms or conditions of a payer
contract should be accepted by physicians,
5. constitutes collective negotiation by physicians with a payer, or
6. involves decisions as to whether to convey information concerning a payer contract
to physicians based, at least in part, on judgments about the attractiveness of the terms
or conditions of the contract.
- L. "Conducting payer contract review" means participating, or assisting, in
the generation or transmission of information from payer contract review.
IT IS FURTHER ORDERED that Mesa IPA, 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
1. Negotiate on behalf of any participating physicians with any payer or provider;
2. Deal, or refuse to deal, with any payer or provider;
3. Determine any terms, conditions, or requirements upon which participating physicians
deal with any payer or provider, including, but not limited to, terms of reimbursement; or
4. Restrict the ability of participating physicians to deal with payers individually or
through any arrangement outside Mesa IPA.
- B. Coordinating terms of contracts with payers with any other group of physicians,
including independent practice associations, located in Mesa County, Colorado, or any
county contiguous to Mesa County, Colorado.
- C. Exchanging, or facilitating the exchange of, information among physicians concerning
the terms or conditions, including reimbursement, on which any physicians are willing to
deal with payers.
- D. 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.
- E. For a period of five (5) years from the date this order becomes final, acting as an
agent for participating physicians in dealings with any payer, including transmitting
terms on which participating physicians may wish to independently contract with payers,
unless each of the following conditions is met:
1. Mesa IPA's role in the contracting process between payers and participating
physicians is limited to:
a. Soliciting or receiving from any participating physician, and conveying to the
payer, information relating to reimbursement, outcomes data, practice parameters,
utilization patterns, credentials, and qualifications of such individual physician;
b. Conveying to a participating physician any contract offer made by the payer;
c. Soliciting or receiving from the payer, and conveying to a participating physician,
clarifications of proposed contract terms;
d. Providing to a participating physician objective information about proposed contract
terms, including comparisons with terms offered by other payers;
e. Conveying to a participating physician any response made by the payer to information
conveyed, or clarifications sought, by Mesa IPA;
f. Conveying, in individual or aggregate form, to the payer, the acceptance or
rejection by a participating physician of any contract offer made by the payer; and
g. At the request of the payer, providing the individual response, information, or
views of each participating physician concerning any contract offer made by such payer;
2. Each participating physician makes an independent, unilateral decision to accept or
reject each contract offer made by the payer;
3. Mesa IPA does not:
a. Disseminate to any physician information about another physician's proposed or
actual reimbursement, or views or intentions as to possible terms of dealing with the
b. Act as an agent for the collective negotiation or agreement by the participating
c. Encourage or facilitate collusive behavior among participating physicians; and
4. Each participating physician remains free to deal individually with any payer.
- F. For a period of five (5) years from the date this order becomes final, allowing a
person to be a participating physician or an employee of Mesa IPA if any managerial or
professional employee, or any director of Mesa IPA, has knowledge that such person
1. is conducting payer contract review, either directly or through an agent,
2. has requested, and is receiving, information from payer contract review conducted by
a physician practicing in Mesa County, or
3. has entered into an agreement, other than a qualified risk-sharing joint arrangement
or a qualified clinically integrated joint arrangement, with another physician practicing
in Mesa County to obtain, and is receiving, information from payer contract review
conducted by any person.
- PROVIDED that nothing in this order shall be construed to prohibit any agreement or
conduct by Mesa IPA that is reasonably necessary to form, facilitate, manage, operate, or
a. A qualified risk-sharing joint arrangement; or
b. A qualified clinically integrated joint arrangement, if Mesa IPA 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, Mesa IPA 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.
IT IS FURTHER ORDERED that Mesa IPA shall:
- A. Within thirty (30) days after the date on which this order becomes final:
1. Distribute by first-class mail a copy of this order and the complaint to each
participating physician, officer, director, manager, and employee; and to each payer
enumerated in Attachment A to this order;
2. Amend its "Physician Manual" to bring it into compliance with this order
and the antitrust laws, and distribute the amended Physician Manual to participating
3. Abolish its Contract Review Committee.
- B. Terminate any agreement or contract with any payer for the provision of physician
services that does not comply with Paragraph II. of this order at the earlier of:
(1) the termination or renewal date (including any automatic renewal date) of such
agreement or contract; or (2) receipt of a written request from a payer to terminate such
agreement or contract.
- C. 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 complaint to each new
participating physician, officer, director, manager, and employee within thirty (30) days
of his or her admission, election, appointment, or employment;
2. Annually publish in an 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; and
3. Annually brief participating physicians on the meaning and requirements of this
consent order and the antitrust laws, including penalties for the violation of this
IT IS FURTHER ORDERED that Mesa IPA shall file a verified written report within sixty
(60) days after the date this order becomes final, annually thereafter for five (5) years
on the anniversary of the date this order becomes final, and at such other times as the
Commission may by written notice require, setting forth in detail the manner and form in
which it has complied and is complying with the order. In addition to any other
information that may be necessary to demonstrate compliance, Mesa IPA shall include in
such reports: (1) information identifying each payer that has contacted Mesa IPA for the
purpose of contracting for physician services, the terms of any contract the payer was
seeking with Mesa IPA, and Mesa IPA's response to the payer; (2) information sufficient to
describe the manner in which participating physicians share financial risk in each
qualified non-exclusive risk-sharing arrangement in which it participates; (3) a copy
of the roster of the participating physicians who have attended the annual briefings
required in Paragraph III.C.3., and the text of such briefings; and (4) copies of the
minutes of Mesa IPA's annual meetings.
IT IS FURTHER ORDERED that Mesa IPA shall notify the Commission at least thirty (30)
days prior to any proposed change in Mesa IPA such as dissolution, assignment, sale
resulting in the emergence of a successor corporation, the creation or dissolution of
subsidiaries, or any other change in Mesa IPA that may affect compliance obligations
arising out of this order.
IT IS FURTHER ORDERED that, for the purpose of determining or securing compliance with
this order, Mesa IPA shall permit 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 its control relating to any matter contained in this
- B. Upon five (5) days' notice to Mesa IPA, and without restraint or interference from
it, to interview officers, directors, or employees of Mesa IPA.
IT IS FURTHER ORDERED that this order shall terminate on May 4, 2019.
By the Commission.
Donald S. Clark
ISSUED: May 4, 1999
- Aetna/U.S. Healthcare
- America's Health Plan
- Antero Health Plan
- Blue Cross & Blue Shield of Colorado
- Casualty Care Network
- Colorado Access
- Colorado Health Care Network
- Colorado Health Care Purchasing Alliance, Inc.
- Colorado Child Health Plan
- Colorado Physician Networks
- Community Health Networks
- Community Health Plan of the Rockies
- Comprehensive Rehabilitation Associates, Inc.
- Continental Medical Systems, Inc.
- CorVel Corporation
- Educators Mutual
- Foundation Health Corporation
- FHP Health Care
- Health Payors Organization Limited
- HMO Colorado
- Health Care Excellence
- Health Care Options
- HealthCare/Compare/Affordable/ OUCH
- Humana Health Care Plan
- Kaiser Permanente
- Liberty Preferred Care
- MEDCO Behavioral Care Systems
- Medical Practice Associates
- MedView Services, Inc.
- Mountain Medical Associates
- Mutual of Omaha Management Care/Exclusicare
- New York Life/Corporate Medical Management, Inc.
- Preferred Physician Agreement
- Primera-First Federal
- Private Healthcare Systems, Inc.
- ProHealth, Inc.
- Prudential Health Care
- QMC3-CRA Managed Care
- Rio Grande Employees Hospital Association
- Rocky Mountain HMO
- Sierra Health & Life Insurance
- Sloans Lake Managed Care
- State Farm of the Western Slope
- The Healthcare Initiative, Inc.
- The Segal Company
- United HealthCare
- USA Health Network