Allcare the FTC and Public Policy Considerations

AllCare The FTC and Public Policy Considerations against Anti-Competitive Behavior The objective of this work is to discuss the role of the FTC and the public policy considerations against anti-competitive behavior and explain why the conduct of the IPAMG was deemed as anti-competitive behavior by the Federal Trade Commission. Finally, this work will identify the penalty, discuss whether that penalty was fair, and state why it is held to be either fair or unfair.

AllCare is described as a "multi-specialty independent practice association consisting of multiple, independent medical practices" and is stated to be comprised of 500 physician members with 200 of those physicians devoted to primary care in the area of Modesto, California. AllCare is reported to contract with Preferred Provider Organizations (PPOs) to provide fee-for-service medical care. It was alleged in a complaint to the FTC that AllCare had "acted to restrain competition on fee-for-service contracts." (Federal Register / Vol. 74, No. 2 / Monday, January 5, 2009) I.

Role of the FTC and Public Policy Considerations AllCare was accused to acting to "…restrain competition on fee-for-service contracts by, among other things, facilitating, entering into, and implementing agreements, express or implied, to fix the prices and other terms at which they would contract with payors to engage in collective negotiations over terms and conditions of dealing with payors; and to have AllCare members refrain from negotiating individually with payors or contracting on terms other than those approved by AllCare." (Federal Register / Vol. 74, No.

2 / Monday, January 5, 2009) The Complaint stated that AllCare had: (1) Unreasonably restrained pricing and other forms of competition among physicians who are members of AllCare; (2) increased prices for physician services; (3) Depriving payors, including insurers and employers, and individual consumers, of the benefits of competition among physicians; and (4) Deprived consumers of the benefits of competition among payors. (Federal Register / Vol. 74, No.

2 / Monday, January 5, 2009) It was held that the "combination, conspiracy, acts and practices" described in the complaint "constitute unfair methods of competition in violation of Section 5 of the Federal Trade Commission Act, as amended 15 U.S.C. Section 45." (Federal Register / Vol. 74, No. 2 / Monday, January 5, 2009) II. Explanation of the Conduct of the IPAMG It is reported that the consent matter in this issue "settled alleged violations of federal law prohibiting deceptive acts of practices or unfair methods of competition." (Federal Register / Vol. 74, No.

2 / Monday, January 5, 2009) The IPAMG had interfered with competition through deceptive means. It is stated that AllCare had, "since at least 2005, acting as a combination of its physician members, and in conspiracy with its members, has acted to restrain competition on fee-for-service contracts" and that this conduct involved entering into agreements that were either "express or implied, to fix the prices and other terms at which they would contract with payors…" (United States of America Before the Federal Trade Commission, In the Matter of: Independent Physician Associates Medical Group, Inc.

dba AllCare IPA, a California Corporation -- Complaint, 2008) III. Penalty and Fairness of Penalty The penalty in this specific case is inherently designed for prevention of the "continuance and recurrence of the unlawful conduct alleged in the Compliant while allowing AllCare to engage in Legitimate, joint conduct. The proposed Consent Order does not affect the activities of contracting of AllCare with the payors on a capitated basis.

AllCare is prohibited as well from "…entering into or facilitating agreements between or among any health care providers and from dealing individually with payors." (Federal Register / Vol. 74, No. 2 / Monday, January 5, 2009) AllCare is further prohibited from engaging in discussions concerning the terms of contract with a payor. AllCare is further required to send a copy of the Complaint to all its physician members, management and staff as well as any payors with whom AllCare communicates.

AllCare is additionally required to terminate preexisting payor contracts, which are held by physicians who were AllCare participants since.