In response to my post below on the FTC’s latest anti-physician case, a commenter identified only as “vineyarder” offered this defense of the Commission’s actions:
The big problem with this analysis is that Roaring Fork Valley Physicians is NOT a physician group practice, it is an IPA (Independant Practice Association); i.e. a collection of competing physicians. Since they are competitors, not partners, it is illegal of them to jointly set minimum rates. The problem is that this IPA failed to comply with the rules for a messenger-model IPA; they agreed as a group to set a minimum floor for commercial contracts. The fact that the minimum that they set was Medicare rates in simply coincidental; they could have just as easily (and just as illegally) picked a specific dollar amount. The problem is that these were competing physicians, and they therefore cannot collectively agree on minimum rates that they will accept; in order to comply with the messenger model IPA regulations, they must each independently set their own rates and the IPA must not facilitate sharing of fee information among members of the IPA. There is nothing in the ruling that prevents any individual physician, or any physician group practice, from refusing to accept Medicare rates from any commercial insurer; it simply enforces the laws that prevent competitors from working together to set prices.
Oh, my! How could I defend a physician group that failed to “comply with messenger model IPA regulations”?
For those of you who haven’t reviewed the dozens of antitrust-physician cases brought over the past decade – oh, how I envy you folks – let me explain what this pseudonymous FTC mole is talking about. Some years ago, the FTC and DOJ issued a bunch of “guidelines” for how the agencies would apply the antitrust laws to the healthcare industry. These guidelines are nothing more then the arbitrary whims of mid-level bureaucrats. They weren’t enacted by Congress, and the agencies certainly had no…what’s the word..er, constitutional authority to makeup these rules. Nevertheless, the nation’s weasely antitrust lawyers agreed to treat the guidelines as Gospel and set out to gouge their healthcare clients for “advising” them on how to follow these rules.
The “messenger model” was one of these guidelines. Basically it says a third-party payer, like your friendly mom-and-pop HMO, can make a contract offer to a bunch of physicians through a “messenger,” usually a consultant hired by the physician association. But it’s a one-way messenger: If he says or does anything that the payer perceives as negotiating on behalf of the physicians, the payer runs crying to its expensive antitrust lawyer, who then calls the FTC and demands the physicians be publicly shamed for “price-fixing.”
Contrary to what our cowardly commenter claims, however, a physician group cannot “comply” with the messenger model. The whole thing is a scam. Since the messenger model is basically the FTC’s imaginary friend, only the FTC knows what it looks like. So even if a physician group spends thousands of dollars on antitrust counsel — in many cases, an ex-FTC lawyer — who tells them exactly how to “comply” with the messenger model, the FTC will just turn around and say, “No, that’s not what we meant!”
Keep this in mind. There’s been at least 40 or 50 FTC cases brought against physician groups for violating the messenger model policy. This encompasses something like 15,000 physicians. Is it really plausible that all of them didn’t know how to comply with the rule? Or is it more likely that the FTC adopted the messenger model as a way of ratcheting up the demand for antitrust lawyers? Call me a skeptic, but I’m going with option B.
Update: Here’s an illuminative excerpt from a 2003 speech from antitrust lawyer Richard Raskin on the messenger model:
Recently I pulled out my copy of Section One of the Sherman Act and discovered to my amazement that it made no mention of the messenger model. So I looked through the cases, and couldn’t find any reference to the messenger model there either. Finally, I got to the Statements of Antitrust Enforcement Policy in Health Care, and there it was, in Statement 9.
Of course, the messenger model and its variations have also been illuminated in scads of agency advisory letters, consent orders, and speeches. And there is also a vast nonpublic literature of lawyers’ advice explaining the serious risks of doing network contracting on a fee-for-service basis without following the messenger model.
One thing I have never found, though, is a business person, administrator, or health care professional in any segment of the industry who advocates the use of the messenger model for any business purpose. Let me qualify that last statement: The few people I have heard promote the messenger model have all had a false conception of what the messenger model really requires….The messenger model was devised by antitrust lawyers solely as a vehicle to permit network contracting while avoiding any agreement on price among the network participants.
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It’s always a pleasure to read an article by someone who doesn’t instantly freeze and run when all sorts of big empty words are hurled at him (or her).
And people actually wonder why health care is so expensive. Of course, they also have the mistaken notion that health care is about health care.
Beautiful, Skip, beautiful!
Once again, if you charge more than your competitors then you’re greedily gouging your prices, if you charge less then you’re unfairly under-cutting their business, and if you charge exactly the same you’re in collusion.
Thanks heavens for the government and their sycophantic trial lawyers!
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