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As hospitals continue to offer an increasing number of post-discharge services to their patients, the risk of violating antitrust laws also increases. The author, an attorney, discusses the legal complexities of deciding when, if at all, an antitrust law may be violated.
In recent years, there has been a growing controversy surrounding the issue of so-called "independent status" for hospital physician staffs. During the late 1970s and early 1980s, some articles advanced the theory that any conduct creating the appearance of an independent status for the hospital staff separate from that of the hospital could generate the environment for an antitrust action. These early theories, however, failed to fully appreciate the basic nature of antitrust law and the changing role of the hospital medical staff. Indeed, the changing nature of the hospital medical staff and the current application of antitrust law strongly indicate the early theories are misplaced and the "independent status" of the hospital medical staff does not create cause for antitrust alarm.
The early 1990's brought a number of cases that raise challenges to new competitive strategies. As health care providers seek to gain a competitive advantage, courts are being asked to review practices under antitrust laws.
The 1996 Justice Department/FTC statements suggest that under some market conditions, competitors who are members of a provider organization may fix prices if the agreement on price is reasonably necessary and subordinate to potential efficiencies created by the group. The author discusses to what extent agencies' statements protect an agreement on price among competitors from being challenged under the antitrust laws.
The United States Court of Appeals for the Eleventh Circuit recently ordered an en banc rehearing of its widely reported hospital downstream diversification antitrust case. The so-called Venice Hospital case had found antitrust liability in the operation of a durable medical equipment (DME) joint venture between a hospital and a DME vendor. The Eleventh Circuit, however, has vacated its prior decision and, pending its en banc opinion, reinstated the district court's decision that the defendants did not violate antitrust law.
This article is the first of a two-part article on antitrust issues as applicable to certified registered nurse anesthetists (CRNAs). The first part presents an overview of antitrust law and discusses issues related to establishing jurisdiction under federal law. The second part reviews specific antitrust concerns including staff privileges, peer review, price fixing, and insurance. The article concludes by making specific practical recommendations for dealing with antitrust situations.
The intellectual property laws in the United States provide the owners of intellectual property with discretion to license the right to use that property or to make or sell products that embody the intellectual property. However, the antitrust laws constrain the use of property, including intellectual property, by a firm with market power and may place limitations on the licensing of intellectual property. This paper focuses on one aspect of antitrust law, the so-called "essential facilities doctrine," which may impose a duty upon firms controlling an "essential facility" to make that facility available to their rivals. In the intellectual property context, an obligation to make property available is equivalent to a requirement for compulsory licensing. Compulsory licensing may embrace the requirement that the owner of software permit access to the underlying code so that others can develop compatible application programs. Compulsory licensing may undermine incentives for research and development by reducing the value of an innovation to the inventor. This paper shows that compulsory licensing also may reduce economic efficiency in the short run by facilitating the entry of inefficient producers and by promoting licensing arrangements that result in higher prices.
The California Dental Association (CDA) has been engaged in a dispute with the Federal Trade Commission (FTC) for over ten years. At issue is whether CDA's advertising restrictions have the effect of prohibiting truthful and nondeceptive advertisements and whether this constitutes a violation of Section 5 of the FTC Act. The case is now before the Commissioners of the FTC; they must decide whether their staff or CDA is correct in interpreting the law. This paper reviews the basics of antitrust law, the facts in the record, and how the Commissioners might resolve some of the questions presented by this case.
Antitrust laws place significant limits on collective action among independent practicing physicians. The lawful options most likely to appeal to physicians include the complete merger of physician practices or the significant involvement of a physician or group in a partially integrated legitimate joint venture, such as a provider-sponsored PPO. Neither activity should be undertaken without the assistance of legal counsel. Change in the overall thrust of antitrust law is unlikely, and physicians must protect themselves from liability through careful business planning and the use of competent legal counsel.
In National Gerimedical Hospital and Gerontology Center v. Blue Cross of Kansas City, the United States Supreme Court held that there is no blanket exemption from antitrust laws for health planning activities. The Court also held that no specific immunity can be granted where the challenged health planning activity is not undertaken pursuant to a federal regulatory scheme. This Comment reviews the Court's decision and concludes that the Court correctly determined that the challenged activities did not qualify for an exemption. The Comment also examines the implications of the Court's statement that, where Congress has manifested a belief that competition is ineffective in the health care industry, application of the antitrust laws should be modified. The Comment recommends that an intermediate review standard such as the "presumptive, incentive modifying approach" should be used by future courts in deciding whether the ineffectiveness of competition in a given area of health planning activity warrants immunity from antitrust scrutiny.
This Article explores the antitrust and other implications of private credentialing and accrediting programs in the health care industry. Although such programs are usually sponsored by powerful competitor groups, they serve the procompetitive purpose of providing useful information and authoritative advice to independent decision makers. Part One examines the risk that credentialing will sometimes be unfair to competitors and deceive consumers. Its survey of common-law, antitrust, and regulatory interventions to correct such unfairness and deception seeks to determine the degree of oversight to which credentialing and similar activities have been and should be subjected. In recommending that judicial or regulatory scrutiny should be limited to discovering whether standards and practices have a rational relation to a procompetitive purpose, the Article argues that greater intrusion into credentialing schemes would be inconsistent with market theory and first amendment values and would discourage line-drawing efforts that stimulate competition and facilitate consumer choice. By emphasizing throughout that personnel certification and institutional accreditation embody ideology and opinion as well as factual information, Part One sets the stage for the argument in Part Two that antitrust law can and should be used to contest the dominance of a single ideology of health care and to facilitate the development of alternative sources of consumer information. The Article's overall thesis is that, whereas the quality of advice given to the public about health care personnel and similar matters should not be closely regulated, neither should the supply of competing information and opinion be artificially curtailed.
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Explore the source record for details and available documents.
Explore the source record for details and available documents.
Highly publicized court cases may lead hospital executives to believe that almost any merger or joint venture will provoke costly antitrust litigation. Executives need to realize that many types of workable and useful transactions may be accomplished without incurring legal action by antitrust law enforcement agencies.
The goals of health care reform and the antitrust laws are similar: promotion of consumer welfare. Under reform, having large groups of consumers and providers will offer substantial efficiencies in purchasing and providing health care services but also will pose some antitrust risks. Health alliances may have excessive market power. Health plans and provider networks may have the potential to foreclose competition from actual or potential rivals. Mergers and joint ventures between providers will proliferate but may raise similar problems. Explicit exemptions from the antitrust laws-through federal or state legislation-may significantly limit the benefits of competition for consumers. A reformed health care system will not reduce the need for antitrust enforcement.
In negotiating with third-party payers, physicians--whether acting independently or as members of independent practice associations--must proceed very cautiously to prevent antitrust exposure. This article describes a number of government investigations in this area and provides some specific "do's" and "don'ts" for avoiding the appearance of collective action that might be in violation of the antitrust laws.
This article is the second of a two-part article on antitrust issues as applicable to certified registered nurse anesthetist (CRNAs). The first part, presented in the March 1992 issue, provided an overview of antitrust law and discussed issues related to establishing jurisdiction under federal law. The second part, presented in this issue, focuses on specific antitrust areas of concern to the CRNA, including staff privileges, peer review, price fixing, and insurance. Specific practical recommendations for dealing with antitrust situations are offered.