Price Fixing- North Texas Specialty Physicians

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The following is based on the material available at http://www.ftc.gov.

The Federal Trade Commission (FTC) issued an administrative complaint against North Texas Specialty Physicians (NTSP) ,a group of Texas physicians. It charged that NTSP unlawfully restrained competition due to which the cost of health care for consumers in the Fort Worth area increased.
NTSP is a nonprofit corporation of physicians at present composed of approximately 600 physicians. A physician may participate in NTSP-payor contracts by granting NTSP the authority to arrange for his or her services to be provided to consumers covered by the payors. FTC has alleged that the NTSP violated federal law as it negotiated agreements among its participating physicians on price and other terms, refused to deal with payors except on collectively agreed-upon terms and refused to submit payor offers to participating physicians unless the terms complied with NTSP's minimum-fee standards. The FTC says that the NTSP often has sought to negotiate for, and often has obtained, higher fees and other more advantageous terms than its individual physicians could obtain by negotiating individually with payors.
The FTC complaint charges that NTSP's polling practices are illegal. NTSP polls its participating physicians to determine the minimum fee that they would accept for medical services provided . Once this information is collected, NTSP calculates the averages of the reported minimum acceptable fees and reports these measures to its participating physicians, confirming to the participating physicians that these will be the minimum fees that NTSP collectively will entertain when negotiating any contract with a payor. The FTC has alleged that the exchange of prospective price information among otherwise competing physicians reduces price competition and enables the participating physicians to achieve supra-competitive prices. The FTC has also alleged that NTSP discouraged payors and participating physicians from negotiating directly with one ...