9810124
UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
- COMMISSIONERS:
- Robert Pitofsky, Chairman
- Sheila F. Anthony
- Mozelle W. Thompson
- Orson Swindle
- Thomas B. Leary
In the Matter of
TEXAS SURGEONS, P.A.,
AUSTIN SURGICAL CLINIC ASSOCIATION, P.A.,
CENTRAL TEXAS SURGICAL ASSOCIATES, P.A., and
SURGICAL ASSOCIATES OF AUSTIN, P.A. professional associations, and
AUSTIN SURGEONS, P.L.L.C.,
BRUCE McDONALD & ASSOCIATES, P.L.L.C., and
CAPITAL SURGEONS GROUP, P.L.L.C., professional limited liability corporations.
Docket No. C-3944
DECISION AND ORDER
The Federal Trade Commission ("Commission") having initiated an investigation
of certain acts and practices of Texas Surgeons, P.A. ("Texas Surgeons"), Austin
Surgeons, P.L.L.C. ("AS"), Austin Surgical Clinic Association, P.A.
("ASCA"), Bruce McDonald & Associates, P.L.L.C. ("BM&A"),
Capital Surgeons Group, P.L.L.C. ("CSG"), Central Texas Surgical Associates,
P.A. ("CTSA"), and Surgical Associates of Austin, P.A. ("SAA"),
hereinafter sometimes referred to as "respondents," and respondents having been
furnished thereafter with a copy of a draft of Complaint that the Bureau of Competition
presented to the Commission for its consideration and which, if issued by the Commission,
would charge respondents with violation of Section 5 of the Federal Trade Commission Act,
as amended, 15 U.S.C. § 45; and
Respondents, their attorneys, and counsel for the Commission having thereafter executed
an Agreement Containing Consent Order ("Consent Agreement"), containing an
admission by respondents of all the jurisdictional facts set forth in the aforesaid draft
of Complaint, a statement that the signing of said Consent Agreement is for settlement
purposes only and does not constitute an admission by respondents 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 Commission having thereafter considered the matter and having determined that it
had reason to believe that respondents have violated the said Act, and that a Complaint
should issue stating its charges in that respect, and having accepted the executed Consent
Agreement and placed such Consent Agreement on the public record for a period of thirty
(30) days for the receipt and consideration of public comments, now in further conformity
with the procedure described in Commission Rule 2.34, 16 C.F.R. § 2.34, the
Commission hereby issues its complaint, makes the following jurisdictional findings and
issues the following Order:
- 1. Respondent Texas Surgeons is a professional association organized, existing, and
doing business under and by virtue of the laws of the State of Texas, with its office and
principal place of business at 4007 Marathon Blvd., Austin, Texas 78756.
-
- 2. Respondent AS is a professional limited liability corporation organized, existing,
and doing business under and by virtue of the laws of the State of Texas, with its office
and principal place of business at 3901 Medical Parkway, #200, Austin, Texas 78756.
-
- 3. Respondent ASCA is a professional association organized, existing, and doing business
under and by virtue of the laws of the State of Texas, with its office and principal place
of business at 2911 Medical Arts Street, Austin, Texas 78705.
-
- 4. Respondent BM&A is a professional limited liability corporation organized,
existing, and doing business under and by virtue of the laws of the State of Texas, with
its office and principal place of business at 4007 Marathon Blvd., Austin, Texas 78756.
-
- 5. Respondent CSG is a professional limited liability corporation organized, existing,
and doing business under and by virtue of the laws of the State of Texas, with its office
and principal place of business at 3705 Medical Parkway, Austin, Texas 78705.
-
- 6. Respondent CTSA is a professional association organized, existing, and doing business
under and by virtue of the laws of the State of Texas, with its office and principal place
of business at 2300 Round Rock Avenue, Round Rock, Texas 78681.
-
- 7. Respondent SAA is a professional association organized, existing, and doing business
under and by virtue of the laws of the State of Texas, with its office and principal place
of business at 1015 East 32nd Street, Austin, Texas 78705.
-
- 8. The Federal Trade Commission has jurisdiction of the subject matter of this
proceeding and of respondents, and the proceeding is in the public interest.
ORDER
I.
IT IS ORDERED that, for the purposes of this Order, the following
definitions shall apply:
- A. "Respondent Texas Surgeons" means Texas Surgeons, P.A., its directors,
officers, employees, agents, representatives, predecessors, successors, and assigns; its
subsidiaries, divisions, groups, and affiliates controlled by Texas Surgeons, P.A., and
the respective directors, officers, employees, agents, representatives, successors, and
assigns of each.
-
- B. "Respondent medical practice groups" means Austin Surgeons, P.L.L.C.,
Austin Surgical Clinic Association, P.A., Bruce McDonald & Associates, P.L.L.C.,
Capital Surgeons Group, P.L.L.C., Central Texas Surgical Associates, P.A., and Surgical
Associates of Austin, P.A., each of their directors, officers, employees, agents,
representatives, predecessors, successors, and assigns; the subsidiaries, divisions,
groups, and affiliates controlled by each respondent medical practice group, and the
respective directors, officers, employees, agents, representatives, successors, and
assigns of each.
-
- C. "Respondents" means respondent Texas Surgeons and respondent medical
practice groups.
-
- D. "Person" means both natural persons and artificial persons, including, but
not limited to, corporations, unincorporated entities, and governments.
-
- E. "Payer" means any person that purchases, reimburses for, otherwise pays for
all or part of, or arranges for the payment 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 for themselves.
-
- F. "Physician" means a doctor of allopathic medicine (M.D.) or a doctor of
osteopathic medicine (D.O.).
-
- G. "Provider" means any person, including but not limited to any physician,
hospital, or clinic, that supplies health care services to any other person.
-
- H. "Qualified risk-sharing joint arrangement" means an
arrangement to provide physician services in which: (1) all participating physicians share
substantial financial risk from their participation in the arrangement and thereby create
incentives for the participating physicians to jointly control costs and improve quality
by managing the provision of physician services, such as risk sharing involving (a) the
provision of physician services to payers or providers at a capitated rate, (b) the
provision of physician services for a predetermined percentage of premium or revenue from
payers or providers, (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
factors; (2) any agreement concerning reimbursement or other terms or conditions of
dealing entered into by or within the arrangement is reasonably necessary to obtain
significant efficiencies through the joint arrangement; and (3) the arrangement does not
restrict the ability, or facilitate the refusal, of physicians participating in the
arrangement to deal with payers or providers on an individual basis or through any other
arrangement.
-
- I. "Qualified clinically-integrated joint arrangement" means an arrangement to
provide physician services in which: (1) all participating physicians 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 the
quality of services provided through the arrangement; (2) any agreement concerning
reimbursement or other terms or conditions of dealing entered into by or within the
arrangement is reasonably necessary to obtain significant efficiencies through the joint
arrangement; and (3) the arrangement does not restrict the ability, or facilitate the
refusal, of physicians participating in the arrangement to deal with payers or providers
on an individual basis or through any other arrangement.
-
- J. "Reimbursement" means any payment, whether cash or non-cash, or other
benefit received for the provision of physician services.
-
- K. "Austin area physician" means any physician who has active staff privileges
at one or more hospitals within any of the Texas counties of Travis, Williamson, Hays,
Caldwell, and Bastrop.
II.
IT IS FURTHER ORDERED that each respondent, 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
understanding:
-
- 1. To negotiate on behalf of any physicians with any payer or provider for physician
services;
-
- 2. To deal, refuse to deal, or threaten to refuse to deal with, or boycott or threaten
to boycott, any payer or provider;
-
- 3. Regarding any term, condition, or requirement upon which any physicians deal, or are
willing to deal, with any payer or provider, including, but not limited to, terms of
reimbursement;
-
- 4. To restrict the ability, or facilitate the refusal, of any physician to negotiate or
deal with any payer or provider on an individual basis or through an arrangement not
involving one or more respondents; or
-
- 5. To convey to any payer or provider through any Austin area physician any information
(including, but not limited to, any actual or contemplated views, intentions, positions,
terms, proposals, or decisions) on behalf of any physician concerning:
-
- a. negotiation of any actual or proposed term, condition, or requirement of dealing with
any payer or provider;
-
- b. any actual or contemplated intention or decision with respect to:
-
- (1) entering into, refusing to enter into, threatening to refuse to enter into,
withdrawing from, or threatening to withdraw from any actual or proposed agreement with
any payer or provider; or
-
- (2) agreeing to, refusing to agree to, or willingness to agree to any actual or proposed
term, condition, or requirement of dealing with any payer or provider.
-
- B. Exchanging, transferring, or facilitating in any manner the exchange or transfer
among any Austin area physicians of information (including, but not limited to, any views,
intentions, positions, terms, proposals, or decisions) concerning:
-
- 1. negotiation with any payer or provider of actual or proposed terms, conditions, or
requirements regarding reimbursement;
-
- 2. any Austin area physician's actual or contemplated intention or decision with respect
to:
-
- a. entering into, refusing to enter into, threatening to refuse to enter into,
withdrawing from, or threatening to withdraw from any actual or proposed agreement with
any payer or provider; or
-
- b. agreeing to, refusing to agree to, or willingness to agree to any actual or proposed
term, condition, or requirement of dealing with any payer or provider.
-
- C. Encouraging, urging, suggesting, requesting, advising, pressuring, assisting,
inducing, or attempting to induce any non-governmental person to engage in any action that
would be prohibited if the person were subject to this Order.
PROVIDED that nothing in this Order shall prohibit any respondent
medical practice group from participating in or furthering any arrangement to provide
physician services that is limited to physicians who practice medicine within such
respondent as a shareholder, owner, or employee.
PROVIDED FURTHER that nothing in this Order shall prohibit conduct
that is approved and supervised by the State of Texas insofar as that conduct is protected
from liability under the federal antitrust laws pursuant to the state action doctrine.
PROVIDED FURTHER that nothing in this Order shall prohibit any
agreement involving, or conduct by, any respondent that is reasonably necessary to form,
participate in, or take any other action in furtherance of a qualified risk-sharing joint
arrangement or a qualified clinically-integrated joint arrangement, so long as the
notification provisions contained in Paragraph V. of this Order have been satisfied.
III.
IT IS FURTHER ORDERED that:
- A. Within thirty (30) days after the date on which this Order becomes final, respondent
Texas Surgeons shall distribute by first-class mail a copy of this Order, the accompanying
complaint, and the Notice in Attachment A to this Order, to:
-
- 1. Each payer or provider listed in Attachment B to this Order;
-
- 2. Each person who, at any time on or after January 1, 1996, has been an officer,
director, manager, participating physician, shareholder, or owner of respondent Texas
Surgeons;
-
- 3. Each other agent, representative, or employee of respondent Texas Surgeons.
-
- B. Within thirty (30) days after the date on which this Order becomes final, each
respondent medical practice group shall distribute by first-class mail a copy of this
Order, the accompanying complaint, and the Notice in Attachment A to this Order, to:
-
- 1. Each officer, director, manager, participating physician, shareholder, or owner of
such respondent who is not a shareholder of respondent Texas Surgeons;
-
- 2. Each other agent, representative, or employee of such respondent;
-
- 3. Each payer or provider not listed in Attachment B that, at any time
from September 1, 1999 to December 31, 1999, has paid such respondent, or any
participating physician of such respondent, for the provision of physician services under
an executed contract.
-
- C. For a period of five (5) years after the date this Order becomes final, respondent
Texas Surgeons shall:
-
- 1. Within thirty (30) days of the date the person assumes such position, distribute by
first-class mail a copy of this Order and the accompanying complaint to each new officer,
director, manager, participating physician, shareholder, or owner of respondent Texas
Surgeons, and to each other new agent, representative, or employee of respondent Texas
Surgeons;
-
- 2. Annually publish, in an official annual report, newsletter, or memorandum sent to all
shareholders, owners, and participating physicians, a copy of this Order and the
accompanying complaint with such prominence as is given to official communications or
regularly featured articles;
-
- 3. Annually brief shareholders, owners, and participating physicians on the meaning and
requirements of this Order and the antitrust laws, including penalties for the violation
of this Order.
-
- D. For a period of five (5) years after the date this Order becomes final, each
respondent medical practice group shall:
-
- 1. Within thirty (30) days of the date the person assumes such position, distribute by
first-class mail a copy of this Order and the accompanying complaint to each new officer,
director, manager, participating physician, shareholder, or owner of such respondent
(unless such person is a shareholder of respondent Texas Surgeons), and to each other new
agent, representative, or employee of such respondent;
-
- 2. Annually publish, in an official annual report, newsletter, or memorandum sent to all
shareholders, owners, and participating physicians of such respondent, a copy of this
Order and the accompanying complaint with such prominence as is given to official
communications or regularly featured articles;
-
- 3. Annually brief shareholders, owners, and participating physicians of such respondent,
who are not shareholders of respondent Texas Surgeons, on the meaning and requirements of
this Order and the antitrust laws, including penalties for the violation of this Order.
IV.
IT IS FURTHER ORDERED that each respondent shall:
- A. File a verified written report with the Commission within sixty (60) days after this
Order becomes final, annually thereafter for five (5) years on the anniversary of the date
the 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 such respondent intends to
comply, is complying, and has complied, with this Order. In addition to any other
information that may be necessary to demonstrate compliance, respondent Texas Surgeons
shall include in such reports information identifying each payer and provider that has
communicated with respondent Texas Surgeons concerning a possible contract for physician
services, the proposed terms and conditions of any such contract, and respondent Texas
Surgeons' response to such payer or provider.
-
- B. Notify the Commission at least thirty (30) days prior to any proposed change in such
respondent, such as dissolution, assignment, sale resulting in the emergence of a
successor, the creation or dissolution of subsidiaries, or any other change in respondent
that may affect compliance obligations arising out of this Order.
V.
IT IS FURTHER ORDERED that, for a period of ten (10) years after the
date this Order is entered:
- A. Each respondent shall notify the Commission in writing at least thirty (30) days
prior to forming, participating in, or taking any action, other than planning, in
furtherance of any:
-
- 1. Qualified risk-sharing joint arrangement or qualified clinically-integrated joint
arrangement involving two (2) or more Austin area physicians; or
-
- 2. Other arrangement that, in dealing or negotiating with any payer or provider, is
using, or intends to use, an agent that represents two (2) or more Austin area physicians.
-
- B. If a representative of the Commission makes a written request for information within
thirty (30) days after receipt of a notice pursuant to Paragraph V.A.1. of this Order,
respondents shall not form, participate in, or take any action, other than planning, in
furtherance of the arrangement until thirty (30) days after substantially complying with
such request for information or such shorter waiting period as may be granted by letter
from the Bureau of Competition.
PROVIDED that no prior notification is required under this Paragraph
for action by a respondent medical practice group in furtherance of any arrangement that
is limited to physicians who practice medicine within such respondent as a shareholder,
owner, or employee.
VI.
IT IS FURTHER ORDERED that, for the purpose of determining or securing
compliance with this Order, each respondent 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, correspondences, memoranda, calendars, and other records and
documents in the possession or under the control of such respondent relating to any matter
contained in this Order; and
-
- B. Upon five (5) business days' notice, and without restraint or interference, to
interview officers, directors, employees, agents, and other representatives of any
respondent.
VII.
IT IS FURTHER ORDERED that this Order shall terminate on May 18, 2020.
By the Commission.
Donald S. Clark
Secretary
SEAL:
ISSUED: May 18, 2000 |