Federal Trade Commission action against the Wisconsin Chiropractic Association

Anti-Trust

The conduct of the Wisconsin Chiropractic Association (WCA)

The Role of the Federal Trade Commission

The Federal Trade Commission (FTC) is entrusted with the responsibility of protecting consumers against anti-competitive behavior. The FTC does not prohibit all forms of monopolistic behavior on the part of organized entities providing services to consumers, such as the regulated utility monopolies. However, part of its mission is to review mergers and acquisitions that would likely lead to higher prices, fewer choices, or less innovation that would be disadvantageous to consumers; it also challenges anticompetitive collusion such as price-fixing agreements between competitors, and it finally promotes competition in industries where the need for competition and/or regulated monopolies is high to protect consumers such as the field of health care and health insurance ("Welcome to the bureau of competition," 2008, FTC).

Penalty: Fair or unfair?

The FTC's identification of this behavior and targeting of the WCA as abusing the consumer seems justified. Encouraging such collusion hurt chiropractic patients by encouraging providers of the service to charge more, because they knew they would be reimbursed more, and health care companies would have to pass the costs onto policy holders -- or refuse to cover the service at all, which would ultimately hurt both patients and the chiropractic profession in the long-term. Even non-chiropractic patients would be hurt, as the costs might be passed onto all users of all components of the health insurance plans who were being effectively extorted for money.

The ultimate settlement that emerged prohibited the WCA "from fixing prices for any chiropractic goods or services, or the terms of third-party payer contracts," which seems more than fair and reasonable -- it seems overly lenient given the damage that was done ("Wisconsin Chiropractic Association and its director agree to settle FTC charges of price-fixing," 2008, FTC). However, because price-fixing can be difficult to prove, some of this leniency on the part of the FTC may be due to the need to engage in a settlement rather than a lengthy court battle with the WCA. Given the centrality of the organization's head Russell a. Leonard, in engaging in such tactics, demanding his resignation seems not only fair, but reasonable.

However, perhaps the most important aspects of the ultimate settlement that emerged were that certain regulatory measures were imposed by the FTC upon the WCA to ensure that such non-competitive professional practices were eschewed. The WCA was barred from negotiating on behalf of any chiropractor or group of chiropractors, which seems reasonable given that groups of chiropractors could do so independently, as well as to boycott any payer or provider, which could also lead to prohibiting cheaper providers (to the consumer) who reimbursed doctors at a lower fee for their services ("Wisconsin Chiropractic Association and its director agree to settle FTC charges of price-fixing," 2008, FTC).

Perhaps most importantly, the WCA was also barred from directly contacting chiropractors to urge them to refuse or to accept the terms of an insurance company's participation agreement or "organizing or participating in any meeting or discussion that they expect or reasonably should expect will facilitate communications concerning any chiropractor's intentions pertaining to any participation agreement" ("Wisconsin Chiropractic Association and its director agree to settle FTC charges of price-fixing," 2008, FTC). This stipulation protects the integrity of the profession, takes pressure off of honest chiropractors as well as protects the consumer. Also quite reasonably, "because of the WCA's misuse of fee surveys alleged in the FTC complaint, the proposed settlement also would prohibit the WCA from initiating, conducting, or distributing any fee surveys for any health care goods or services prior to December 31, 2001" ("Wisconsin Chiropractic Association and its director agree to settle FTC charges of price-fixing," 2008, FTC).