WASHINGTON, D.C. -- The Department of Justice today announced that it would not challenge a joint venture to create a physician network in the Southside Hampton Roads, Virginia area -- including Virginia Beach, Chesapeake, Portsmouth, and Norfolk.

Under the proposal, Preferred Physicians Medical Group (PPMG), will have 103 members -- 54 primary care physicians and 49 specialists practicing in 13 different physician specialties. The network physicians will share substantial financial risk in all network contracts, and PPMG plans to establish a variety of programs to ensure the quality and efficiency of its operations. Members of PPMG will be required to participate in all contracts negotiated on behalf of the network and will not contract individually with payers that have contracts with PPMG.

According to a business review letter issued by Joel I. Klein, Assistant Attorney General in charge of the Department's Antitrust Division, a joint venture between these physicians is not likely to have anti-competitive effects in the markets for primary and specialty care. The network's members represent less than 10 percent of the physicians in any specialty in the Southside Hampton Roads area. Even with expected growth, PPMG does not plan to exceed 15 percent of the physicians in any specialty or ten percent of all physicians in that coverage area.

Under the Department's business review procedure, an organization may submit a proposed action to the Antitrust Division and receive a statement as to whether the Division will challenge the action under the antitrust laws.

A file containing the business review request and the Department's response may be examined in the Legal Procedure Unit of the Antitrust Division, Suite 215 Liberty Place, 325 7th Street, N.W., Department of Justice, Washington, D.C. 20004. After a 30-day waiting period, the documents supporting the business review will be added to the file unless a basis for their exclusion for reasons of confidentiality has been established pursuant to Paragraph 10(c) of the Business Review Procedure.

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