How to avoid antitrust violations and severe penalties

Amid the changes and controversies of health care reform, optometrists are increasingly interested in the details of third-party reimbursement. But they also must be more mindful of federal and state antitrust laws when discussing this important topic.

Discussions about health plan provider agreements, fee schedules and other aspects of third-party reimbursement can lead to violations of antitrust laws, according to AOA General Counsel Michael Stokes, J.D. That's true whether discussions take place at formal or informal meetings, in electronic or print media, or during private conversations. The penalties are potentially severe.

"A 'wink and a nod' is all it takes."

"Like other businesses, optometrists cannot collude to take part in any of a list of activities that are held under the law to be inherently anticompetitive with an inherently detrimental effect on consumers-price-fixing, bid-rigging, market-sharing and group-boycotting," Stokes said.

Four things you cannot do

In most instances, antitrust law holds health practices to be businesses, not labor. Laborers can organize into unions to negotiate contracts collectively on behalf of members. Under most circumstances, health care practitioners cannot.

For that reason, organizations representing practitioners—including the AOA and its affiliated state optometric associations—cannot:

  • Engage in concerted negotiations with third-party payers on reimbursement policies.
  • Enter into any agreements with a third-party payer on the amount of reimbursement or the acceptance or rejection of any rates.
  • Facilitate concerted action to increase fees or reimbursement rates, including group boycotts, prohibiting participation in a plan, recommending withholding required information from payers, protesting or challenging every reimbursement, or threatening mass resignation.
  • Facilitate communications or other actions by their members that could ultimately have an anticompetitive effect on the health care marketplace.

"Antitrust concerns arise when a group of members or others acting collectively approach a third party or a customer on behalf of a group, or even when a number of individual members take action separately based upon something that was discussed at a meeting," said Stokes.

"It doesn't take much to show an agreement among competitors; a 'wink and a nod' is all it takes. That is why AOA, like most trade and professional associations, has a policy that prohibits any discussion of individual members' costs and reimbursement rates at AOA meetings."

Four things you can do

The AOA and affiliated state optometric associations can do the following:

  • Approach insurance plans to seek information regarding general plan policy.
  • Provide educational information to third-party payers on optometric scope of practice, the procedures performed by optometrists and the costs incurred by optometrists in the course of providing care.
  • Enquire with plan officials when an insurance plan bars optometrists from its medical eye care provider panel for procedures within the optometrists' scope of practice or reimburses optometrists less than ophthalmologists for comparable services.
  • Lobby state legislatures or other governmental bodies on behalf of the AOA's members for governmental action related to insurance plan reimbursement or policy.

"Individual optometrists and practices may take any action they feel is appropriate in their independent dealings with third-party payers," Stokes emphasized. "However, a group of optometrists who are not in practice together cannot reach an agreement or engage in a collective effort to either pressure or withdraw their participation from a third-party payer because such an agreement or effort would amount to a group boycott in violation of the antitrust laws."

Penalties are severe

Both the Antitrust Division of the United States Department of Justice and the Federal Trade Commission can bring civil lawsuits enforcing antitrust laws. The United States Department of Justice alone may bring criminal antitrust suits under federal antitrust laws. In addition, private civil suits may be brought, in both state and federal court, against violators of state and federal antitrust law. Federal antitrust laws, as well as most state laws, provide for double and triple damages against antitrust violators.

The FTC Health Care Division's latest Overview of FTC Antitrust Actions in Health Care Services, issued in March 2013, lists at least 50 cases resolved by the division since its inception.

October 24, 2013

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