[Federal Register Volume 64, Number 24 (Friday, February 5, 1999)]
[Notices]
[Pages 5831-5839]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-2714]
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DEPARTMENT OF JUSTICE
Antitrust Division
[Civil No. 99-167-CIV-T-17F]
United States of America v. Federation of Certified Surgeons and
Specialists, Incorporated and Pershing Yoakley & Associates, P.C.
Notice is hereby given pursuant to the Antitrust Procedures and
Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment,
Stipulations, and a Competitive Impact Statement have been filed with
the United States District Court for the Middle District of Florida,
Tampa Division, in United States of America v. Federation of Certified
Surgeons and Specialists, Inc., and Pershing Yoakley & Associates, P.C.
The Complaint alleges that defendants entered into an agreement
with the
[[Page 5832]]
purpose and effect of restraining price competition, in violation of
Section 1 of the Sherman Act, 15 U.S.C. 1, by limiting competition
among general vascular surgeons in Tampa. The proposed Final Judgment
enjoins the continuance or resumption of this practice. Copies of the
Complaint, proposed Final Judgment, and Competitive Impact Statement
are available for inspections in Room 215, 325 Seventh Street, N.W.,
United States Department of Justice, Washington, D.C. and at the Office
of the Clerk of the United States District Court for the Middle
District of Florida, Tampa Division, Tampa, Florida.
Public comment on the proposed Final Judgment is invited within 60
days of the date of this notice. Such comments and responses thereto
will be published in the Federal Register and filed with the Court.
Comments should be directed to Gail Kursh, Chief, Health Care Task
Force, United States Department of Justice, Antitrust Division, 325
Seventh Street, N.W., Room 400, Washington, D.C. 20530 (telephone:
(202) 307-5799).
Rebecca P. Dick,
Director of Civil Non-Merger Enforcement, Antitrust Division.
Notice of Filing a Proposed Final Judgment Pursuant to the
Antitrust Procedures and Penalties Act
The United States submits this Notice summarizing the procedures
regarding the Court's entry of the proposed Final Judgment. The
proposed Final Judgment would settle this case pursuant to the
Antitrust Procedures and Penalties Act (``Act''), 15 U.S.C. 16(b)-(h),
which applies to civil antitrust cases brought and settled by the
United States. Under the Act, the Final Judgment is not to be entered
until the United States certifies compliance with the requirements of
the Act and the Court concludes that entry of the Final Judgment is in
the public interest.
Today, the United States has filed a civil antitrust Complaint
charging the Federation of Certified Surgeons and Specialists, Inc.,
and Pershing Yoakley & Associates, P.C., with violating Section 1 of
the Sherman Act. Also filed with the Complaint are a proposed Final
Judgment, a Competitive Impact Statement, and Stipulations between the
parties by which the defendants agree to the Court's entry of the
proposed Final Judgment following compliance with the Act. The
Competitive Impact Statement reflects the Act's requirement of filing a
competitive impact statement explaining the nature of the case and the
proposed relief.
Under the Act, the United States must publish the proposed Final
Judgment and the Competitive Impact Statement in the Federal Register
and publish for 7 days over a period of 2 weeks a summary of these
pleadings in newspapers of general circulation in the Middle District
of Florida and the District of Columbia. The Act provides for a 60-day
period after publication for the public to submit comments to the
Department of Justice regarding the proposed Final Judgment. The Act
provides that the Department shall publish in the Federal Register, and
file with the Court, any comments received and the Department's
response to such comments. The defendants are required to file a
description of certain communications with the government within 10
days after a proposed final judgment is filed. See 15 U.S.C.
Sec. 16(g).
Once all of the Act's requirements have been met, the United States
will promptly file with the Court a Certificate of Compliance with the
Act and a Motion for Entry of the Final Judgment (unless the United
States decides to withdraw its consent to entry of the Final Judgment,
as permitted by Paragraph 2 of the Stipulations). At that time,
pursuant to Section 16(e)-(f) of the Act, the Court may enter the Final
Judgment without a hearing, if it finds the Final Judgment is in the
public interest.
Dated January 26, 1999.
For Plaintiff
United States of America
Charles R. Wilson,
United States Attorney.
By:
Whitney Schmidt,
Affirmative Civil Enforcement Coordinator, Assistant United States
Attorney, Florida Bar No. 285706, 400 North Tampa Street, Suite 3200,
Tampa, FL 33602, Tel: (813) 274-6332, Facsimile: (813) 274-6198
Denise E. Biehn,
Trial Counsel.
Steven Kramer,
Edward D. Eliasberg, Jr.,
Florida Bar No. 005725, Attorneys, Antitrust Division, U.S. Dept. of
Justice, 325 Seventh St. N.W., Room 409, Washington, D.C. 20530, Tel:
(202) 307-0808, Facsimile: (202) 514-1517.
Stipulation as to Defendant Federation of Certified Surgeons and
Specialists, Inc.
It is stipulated by and between the undersigned parties, by their
respective attorneys, that:
1. The Court has jurisdiction over the subject matter of this
action and over each of the undersigned parties hereto, and venue of
this action is proper in the Middle District of Florida;
2. The undersigned parties consent that a Final Judgment in the
form hereto attached may be filed and entered by the Court, upon the
motion of either party, or upon the Court's own motion, at any time
after compliance with the requirements of the Antitrust Procedures and
Penalties Act, 15 U.S.C. Sec. 16, and without further notice to either
party or other proceedings, provided that plaintiff has not withdrawn
its consent, which it may do at any time before the entry of the
proposed Final Judgment by serving notice thereof on defendant and by
filing that notice with the Court;
3. Federation of Certified Surgeons and Specialists, Inc.
(``FCSSI'') agrees to be bound by the provisions of this proposed Final
Judgment pending its approval by the Court. Within ten days from the
execution of this Stipulation, defendant FCSSI agrees to provide to all
FCSSI physicians, as that term is defined in the proposed Final
Judgment, copies of the proposed Final Judgment; and
4. If plaintiff withdraws its consent, or if the proposed Final
Judgment is not entered pursuant to the terms of this Stipulation, this
Stipulation shall be of no effect whatsoever, and the making of this
Stipulation shall be without prejudice to any party in this or in any
other proceeding.
Dated: January 15, 1998.
For Plaintiff
United States of America:
Joel I. Klein,
Assistant Attorney General.
Donna Patterson,
Deputy Assistant Attorney General.
Rebecca P. Dick,
Director of Civil, Non-Merger Enforcement.
Gail Kursh,
Chief,
Health Care Task Force.
[[Page 5833]]
David C. Jordan,
Ass't Chief, Health Care Task Force.
Denise E. Biehn,
Steven Kramer,
Edward D. Eliasberg, Jr.,
Attorneys, U.S. Dept. of Justice, 325 7th Street, N.W., Room 400,
Liberty Place Bldg., Washington, D.C. 20530, (202) 305-2738.
For Defendant Federation of Certified Surgeons and Specialists,
Inc.:
David A. Ettinger, Esquire,
Honigman, Miller, Schwartz and Cohen, 2290 First National Building,
Detroit, MI 48226.
Emil Marquardt, Jr., Esquire,
MacFarlane Ferguson & McMullen, P.A., 625 Court Street, Clearwater, FL
33757.
Stipulation as to Defendant Pershing, Yoakley & Associates, P.C.
It is stipulated by and between the undersigned parties, by their
respective attorneys, that:
1. The Court has jurisdiction over the subject matter of this
action and over each of the undersigned parties hereto, and venue of
this action is proper in the Middle District of Florida;
2. The undersigned parties consent that a Final Judgment in the
form hereto attached may be filed and entered by the Court, upon the
motion of either party, or upon the Court's own motion, at any time
after compliance with the requirements of the Antitrust Procedures and
Penalties Act, 15 U.S.C. Sec. 16, and without further motive to either
party or other proceedings, provided that plaintiff has not withdrawn
its consent, which it may do at any time before the entry of the
proposed Final Judgment by serving notice thereof on defendant and by
filing that notice with the Court; and
3. Pershing, Yoakley & Associates, P.C. (``PYA''), agrees to be
bound by the provisions of this proposed Final Judgment pending its
approval by the Court. Within ten days from the execution for this
Stipulation, defendant PYA agrees to provide to all of its
shareholders, its agents, representatives, employees, officers, and
directors (in such capacities only) who provides, or supervises the
provision of, services to competing physicians with offices in
Hillsborough, Pinellas or Pasco County, Florida, copies of the proposed
Final Judgment; and
4. If plaintiff withdraws its consent, or if the proposed Final
Judgment is not entered pursuant to the terms of the Stipulation, this
Stipulation shall be of no effect whatsoever, and the making of this
Stipulation shall be without prejudice to either party in this or in
any other proceeding.
Dated: January 21, 1999.
For Plaintiff
United States of America:
Joel I. Klein,
Assistant Attorney General.
Donna Patterson,
Deputy Assistant Attorney General.
Rebecca P. Dick,
Deputy Director of Civil, Non-Merger Enforcement.
Gail Kursh,
Chief, Health Care Task Force.
David C. Jordan,
Ass't Chief, Health Care Task Force.
Denise E. Biehn,
Steven Kramer,
Edward D. Eliasberg,
Attorneys, U.S. Dept. of Justice, 325 7th Street, N.W., Room 400,
Liberty Place Bldg., Washington, D.C. 20530, (202) 305-2738.
For Defendant Pershing, Yoakley & Associates, P.C.:
John J. Miles,
E. John Steren,
Ober, Kaler, Grimes & Shriver, 1401 H Street, N.W., 5th Floor,
Washington, D.C. 20005-2110.
Final Judgment
Plaintiff, the United States of America, having filed its Complaint
on ________________ 1999, and plaintiff and defendant Federation of
Certified Surgeons and Specialists, Inc., (``FCSSI'') and defendant
Pershing Yoakley & Associates, P.C. (``PYA''), by their respective
attorneys, having consented to the entry of this Final Judgment without
trial or adjudication of any issue of fact or law, and without this
Final Judgment constituting any evidence against or an admission by any
party with respect to any issue of fact or law;
And whereas defendants have agreed to be bound by the provisions of
this Final Judgment;
Now, therefore, before the taking of any testimony, and without
trial or adjudication of any issue of fact or law, and upon consent of
the plaintiff and defendants, it is hereby ordered, adjudged, and
decreed:
I. Jurisdiction
This Court has jurisdiction over the subject matter of and over the
plaintiff and defendants to this action. The Complaint states a claim
upon which relief may be granted against defendants under Section 1 of
the Sherman Act, 15 U.S.C. Sec. 1.
II. Definitions
As used in this Final Judgment:
(A) ``Communicate'' means to discuss, disclose, transfer,
disseminate, or exchange information or opinion, formally or
informally, in any manner;
(B) ``Competing physicians'' means two or more physicians in
separate medical practices in the same county in the same specialty;
(C) ``Competitively sensitive information'' means
(1) Any participating physician's actual or possible view,
intention, or position concerning the negotiation or acceptability of
any proposed or existing payer contract or contract term, including the
physician's negotiating or contracting status with any payer or the
physician's response to a payer contract or contract term; or
(2) Any proposed or existing term of a payer contract that affects:
(a) The amount of fees or payment, however determined, that a
participating physician charges, contracts for, or accepts from or
considers charging, contracting for, or accepting from any payer for
providing physician services;
(b) The duration, amendment, or termination of the payer contract;
(c) Utilization review; or
(d) The manner of resolving fee disputes between the participating
physician and the payer,
(D) ``FCSSI'' means the Federation of Certified Surgeons and
Specialists, Inc., located in Tampa, Florida; each of its present and
former members, shareholders, directors, officers, agents,
representatives, and employees (all such persons only in such
capacities with FCSSI or with any successors or assigns of FCSSI); its
successors and assigns, including any group organized directly or
indirectly by two or more competing physicians (who serve or have
served as a director or officer of FCSSI) for the purpose of
negotiating with payers; and each entity over which it has control;
(E) ``FCSSI physician'' means all present and former physician
shareholders and physician members of FCSSI;
(F) ``Messenger'' means a person that communicates to a payer any
competitively sensitive information it obtains, individually, from a
[[Page 5834]]
participating physician or communicates, individually, to a
participating physician any competitively sensitive information it
obtains from a payer;
(G) ``Objective information'' or ``objective comparison'' means
empirical data that are capable of being verified or a comparison of
such data;
(H) ``Participating physician'' means a physician who is either in
solo practice or a group practice, and who participates in a messenger
arrangement, and any employee of such physician or group practice
acting on the physician's or group practice's behalf in connection with
a messenger arrangement.
(I) ``Payer'' means any person that purchases or pays for all or
part of a physician's services for itself or any other person and
includes but is not limited to independent practice associations,
individuals, health insurance companies, health maintenance
organizations, preferred provider organizations, and employers;
(J) ``Payer contract'' means a contract between a payer and a
physician by which that physician agrees to provide physician services
to persons designated by the payer;
(K) ``Person'' means any natural person, corporation, firm,
company, sole proprietorship, partnership, joint venture, association,
institute, governmental unit, or other legal entity; and
(L) ``PYA'' means Pershing Yoakley & Associates, P.C. with offices
in Clearwater Florida; each of its shareholders, its agents,
representatives, employees, officers, and directors (in such capacities
only); its successors and assigns; and each entity it controls.
III. Applicability
Except where expressly limited to one defendant, this Final
Judgment applies to:
(A) FCSSI;
(B) PYA, when providing, or supervising the provision of, services
to any competing physicians in Hillsborough, Pinellas, or Pasco County,
Florida; and
(C) All other persons who receive actual notice of this Final
Judgment by personal service or otherwise and then act or participate
in active concert with any of the above persons.
IV. Injunctive Relief
(A) FCSSI is enjoined, directly or indirectly, from:
(1) Participating in, encouraging, or facilitating any agreement or
understanding between competing physicians about any competitively
sensitive information;
(2) Acting as, or facilitating the use of, a messenger or any other
agent or representative for any FCSSI physician for the purpose of
negotiating or communicating with any payer on behalf of such FCSSI
physician;
(3) Participating in, encouraging, or facilitating any agreement or
understanding among competing physicians about using a messenger;
(4) Negotiating with any payer on behalf of any FCSSI physician;
(5) Communicating or facilitating the communication of any
competitively sensitive information to, or in the presence of,
competing physicians; and
(5) Participating in, encouraging, or facilitating any agreement or
understanding among any competing physicians that FCSSI physicians will
deal with a payer only through a messenger or other agent or
representative.
(B) PYA is enjoined, directly or indirectly, from:
(1) Participating in, encouraging, or facilitating any agreement or
understanding between competing physicians with offices in
Hillsborough, Pinellas, or Pasco County, Florida, about any
competitively sensitive information;
(2) Participating in, encouraging, or facilitating any agreement or
understanding between competing physicians with offices in
Hillsborough, Pinellas, or Pasco County, Florida, to deal with any
payer exclusively through a messenger rather than individually or
through other channels;
(3) Negotiating, collectively or individually, on behalf of
competing physicians with offices in Hillsborough, Pinellas, or Pasco
County, Florida, any actual or proposed payer contract or contract term
with any payer;
(4) Making any recommendation to competing physicians with offices
in Hillsborough, Pinellas, or Pasco County, Florida, about any actual
or proposed payer contract or contract term or whether to accept or
reject any such payer contract or contract term;
(5) Communicating competitively sensitive information in the
presence of competing physicians with offices in Hillsborough,
Pinellas, or Pasco County, Florida;
(6) Communicating to competing physicians with offices in
Hillsborough, Pinellas, or Pasco County, Florida, any subjective
opinion or subjective analysis, evaluation, or assessment about
competitively sensitive information;
(7) Precluding or discouraging any competing physicians with
offices in Hillsborough, Pinellas, or Pasco County, Florida, from
exercising his, her, or their own independent business judgment in
determining whether to negotiate, contract, or deal directly with any
payer;
(8) Acting as, or using, a messenger on behalf of defendant FCSSI
or any other group or groups of competing physicians with offices in
Hillsborough, Pinellas, or Pasco County, Florida if present or former
members of FCSSI constitute more than twenty percent of any individual
group's membership or of all groups' total membership; and
(9) Acting as, or using, a messenger for any competing physicians
with offices in Hillsborough, Pinellas, or Pasco County, Florida,
unless:
(a) At the outset of its involvement with any payer as a messenger
(or within 30 days of the entry of this Final Judgment for any ongoing
involvement with a payer), and annually thereafter, it informs the
payer in writing that, at any time, (i) the payer is free to decline to
communicate with any participating physician through it, and (ii) any
participating physician is free to communicate with the payer
individually without its involvement;
(b) When first designated by any participating physician as a
messenger (or within 30 days of the entry of this Final Judgment for
any ongoing involvement, on behalf of a participating physician, with a
payer), and annually thereafter, it informs the participating physician
in writing that he or she is free at any time to communicate with any
payer individually without its involvement;
(c) When first designated by any participating physician as a
messenger and at the outset of its involvement with any payer as a
messenger (or within 30 days of the entry of this Final Judgment for
any ongoing involvement, on behalf of a participating physician, with a
payer), and annually thereafter, it informs the participating physician
and any payer with whom it communicates as a messenger on behalf of the
participating physician in writing that it cannot negotiate,
collectively or individually, for any participating physician any payer
contract or contract term but can act only as a messenger as permitted
by this Final Judgment;
(d) It informs the participating physician of any payer's decision
not to communicate or to discontinue communicating with any
participating physician through PYA;
(e) It communicates all competitively sensitive information that it
receives from any payer separately to each participating physician
designated by the payer;
[[Page 5835]]
(f) It does not communicate any competitively sensitive information
obtained from any participating physician to anyone other than to
payers;
(g) It ensures that (i) any oral communications between it and any
payer or any participating physician is contemporaneously memorialized
in writing and shows the date, participants to, and substance of the
communication, and the person making the record; (ii) such
memorialization and any written communications between it and any payer
or participating physician are preserved for two years; (iii) any
correspondence between it and a participating physician is addressed
individually to that participating physician only; and (iv) no
correspondence between it and a payer that includes the competitively
sensitive information of a participating physician is sent to any other
competing physician; and
(h) It does not violate any of the provisions of Section IV (B)(1)-
(8) of this Final Judgment.
V. Notifications
(A) Within 30 days from the entry of this Final Judgment, FCSSI
shall notify, in writing, each payer (1) with which FCSSI negotiated
any contract or currently is attempting to negotiate any contract or
(2) that FCSSI approaches on behalf of any FCSSI physician, that FCSSI
will no longer represent any FCSSI physician in any manner relating to
payer contracts or contract terms.
(B) Within 30 days from the entry of this Final Judgment, FCSSI
shall notify, in writing, each payer with which FCSSI has negotiated a
contract that any contract between FCSSI and the payer may be
terminated by the payer upon written notice to FCSSI given within 30
days following FCSSI's written notification.
(C) After entry of this Final Judgment, FCSSI shall notify each
payer that inquires about contracting through or with FCSSI that FCSSI
does not represent any FCSSI physician in any manner relating to payer
contracts or contract terms.
(D) FCSSI shall notify plaintiff at least 30 days prior to any
proposed (1) dissolution of FCSSI, (2) sale or assignment of claims or
assets of FCSSI resulting in the emergence of a successor corporation,
or (3) change in corporate structure of FCSSI that may affect
compliance obligations arising out of Section VII of this Final
Judgment.
VI. Permitted Conduct
Notwithstanding any other provision of this Final Judgment, PYA
may:
(A) At a participating physician's request, communicate to the
participating physician accurate, factual, and objective information
about a proposed payer contract offer or contract terms, including, if
requested, objective comparisons with terms offered to that
participating physician by other payers; and
(B) Engage in activities reasonably necessary to facilitate lawful
activities by physician network joint ventures and muliprovider
networks as those terms are used in Statements 8 and 9 of the 1996
Statements of Antitrust Enforcement Policy in Health Care, 4 Trade Reg.
Rep. (CCH) para. 13,153.
VII. Compliance Program
(A) FCSSI shall maintain an antitrust compliance program (unless
FCSSI dissolves without any successors or assigns) that shall include:
(1) Distributing, within 60 days from the entry of this Final
Judgment, a copy of the Final Judgment and Competitive Impact Statement
to all FCSSI physicians and distributing in a timely manner a copy of
the Final Judgment and Competitive Impact Statement to any physician
who subsequently joins FCSSI;
(2) Obtaining, within 120 days from the entry of this Final
Judgment, and annually thereafter, and retaining for the duration of
this Final Judgment, a certificate from each then current FCSSI
physician that he or she has received, read, understands, and agrees to
comply with the Final Judgment and understands that he or she may be
held in civil or criminal contempt for failing to do so.
(B) PYA shall maintain an antitrust compliance program, which shall
include:
(1) Distributing within 60 days from the entry of this Final
Judgment, a copy of the Final Judgment and Competitive Impact Statement
to all of its shareholders, agents, representatives, employees,
officers, and directors (in such capacity only) who provide, or
supervise the provision of, services to competing physicians;
(2) Distributing in a timely manner a copy of the Final Judgment
and Competitive Impact Statement to any person who succeeds to a
position described in Paragraph VII (B)(1);
(3) Holding an annual seminar explaining to all of its
shareholders, agents, representatives, employees, officers, and
directors (in such capacity only) who provide, or supervise the
provision of, services to competing physicians, the antitrust
principles applicable to their work, the restrictions contained in this
Final Judgment, and the implications of violating the Final Judgment;
(4) Maintaining an internal mechanism by which questions from any
of its shareholders, agents, representatives, employees, officers, and
directors (in such capacity only) about the application of the
antitrust laws to the presentation of competing physicians, whether as
a messenger or as some other representative, can be answered by counsel
as the need arises;
(5) Obtaining, within 120 days from the entry of this Final
Judgment, and retaining for the duration of this Final Judgment a
certificate from each of its shareholders, agents, representatives,
employees, officers, and directors (in such capacity only) who provide,
or supervise the provision of, services to competing physicians with
offices in Hillsborough, Pinellas, or Pasco County, Florida, that he or
she has received, read, and understands this Final Judgment, and that
he or she has been advised and understands that he or she must comply
with the Final Judgment and may be held in civil or criminal contempt
for failing to do so.
(C) FCSSI and PYA shall maintain for inspection by plaintiff a
record of recipients to whom this Final Judgment and Competitive Impact
Statement have been distributed and from whom annual written
certifications have been received.
VIII. Certification
(A) Within 75 days after entry of this Final Judgment, FCSSI and
PYA shall certify to plaintiff that it has distributed the Final
Judgment and Competitive Impact Statement as respectively required by
Paragraph VII (A)(1) and VII (B)(1);
(B) For a period of ten years following the date of entry of this
Final Judgment, unless they dissolve without any successors or assigns,
FCSSI and PYA shall certify annually to plaintiff that they have
complied with the provisions of this Final Judgment; and
(C) Within 75 days after entry of this Final Judgment, FCSSI shall
certify to plaintiff that it has made the notifications required by
Section V.
IX. Plaintiff's Access
(A) For the purposes of determining or securing compliance with
this Final Judgment or determining whether this Final Judgment should
be modified or terminated, and subject to any legally recognized
privilege, authorized representatives of the Antitrust Division of the
United States Department of Justice, shall upon written request of the
Assistant Attorney General in charge of
[[Page 5836]]
the Antitrust Division and on reasonable notice to FCSSI or PYA, be
permitted:
(1) Access during regular business hours to inspect and copy all
records and documents in the possession, custody, or under the control
of FCSSI or PYA, which may have counsel present, relating to any
matters contained in this Final Judgment;
(2) To interview FCSSI's or PYA's members, shareholders, partners,
officers, directors, employees, agents, and representatives, who may
have counsel present, concerning such matters; and
(3) To obtain written reports from FCSSI or PYA under oath if
requested, relating to any matters contained in this Final Judgment.
(B) FCSSI and PYA shall have the right to be represented by counsel
in any process under this Section.
(C) No information or documents obtained by the means provided in
this Section shall be divulged by the plaintiff to any person other
than duly authorized representatives of the Executive Branch of the
United States, except in the course of legal proceedings to which the
United States is a party (including grand jury proceedings), or for the
purpose of securing compliance with this Final Judgment, or as
otherwise required by law.
(D) If, at the time information or documents are furnished by
defendant to plaintiff, defendant represents and identifies, in
writing, the material in any such information or documents to which a
claim of protection may be asserted under Rule 26(c)(7) of the Federal
Rules of Civil Procedure, and defendant will mark each pertinent page
of such material, ``subject to claim of protection under Rule 26(c)(7)
of the Federal Rules of Civil Procedure,'' then 10-days notice shall be
given by plaintiff to defendant prior to divulging such material in any
legal proceeding (other than a grand jury proceeding) to which
defendant is not a party.
X. Jurisdiction Retained
This Court retains jurisdiction to enable any party to this Final
Judgment, but no other person, to apply to this Court at any time for
further orders and directions as may be necessary or appropriate to
carry out or construe this Final Judgment, to modify or terminate any
of its provisions, to enforce compliance, and to punish violations of
its provisions.
XI. Expiration of Final Judgment
This Final Judgment shall expire ten (10) years from the date of
entry.
XII. Public Interest Determination
Entry of this Final Judgment is in the public interest.
Court approval subject to procedures of the Antitrust Procedures
and Penalties Act, 15 U.S.C. 16.
----------------------------------------------------------------------
United States District Judge
Competitive Impact Statement
Pursuant to Section 2(b) of the Antitrust Procedures and Penalties
Act, 15 U.S.C. Sec. 16(b) (``APPA''), the United States files this
Competitive Impact Statement relating to the proposed Final Judgment
submitted for entry in this civil antitrust proceeding.
I. Nature and Purpose of the Proceeding
On ________________, the United States filed a civil antitrust
Complaint alleging that defendants, the Federation of Certified
Surgeons and Specialists, Inc. (``FCSSI'') and Pershing Yoakley &
Associates, P.C. (``PYA''), participated in an agreement to negotiate
jointly with managed care plans (``MCPs'') to obtain higher fees for
FSSI's otherwise competing general and vascular surgeons in violation
of Section 1 of the Sherman Act, 15 U.S.C. 1. The Complaint seeks
injunctive relief to enjoin continuance or resumption of the violation.
The United States filed with the Complaint a proposed Final
Judgment intended to resolve this matter. The Court's entry of the
proposed Final Judgment will terminate this action, except that the
Court will retain jurisdiction over the matter for any further
proceedings that may be required to interpret, enforce, or modify the
Final Judgment, or to punish violations of any of its provisions.
Plaintiff and defendants have stipulated that the Court may enter
the proposed Final Judgment after compliance with the APPA unless,
prior to entry, plaintiff withdraws its consent. In the Stipulations to
the proposed Final Judgment, defendants have agreed to be bound by the
provisions of the proposed Final Judgment pending its entry by the
Court. The proposed Final Judgment provides that its entry does not
constitute any evidence against, or admission by, any party concerning
any issue of fact of law. The present proceeding is designed to ensure
full compliance with the public notice and other requirements of the
APPA.
II. Practices Giving Rise to the Alleged Violations
A. Defendants
Defendant FCSSI is a Florida corporation with its principal place
of business in Tampa, Florida. FCSSI comprises 29 competing general and
vascular surgeons in Tampa and is controlled by its member surgeons. In
1997, FCSSI's surgeons performed 87% of all general and vascular
surgeries, and constituted over 83% of all general and vascular
surgeons having operating privileges, at five of the seven hospitals in
Tampa that provide general and vascular surgery services.
Defendant PYA, an accounting and consulting firm, is a Tennessee
professional corporation with its principal place of business in
Knoxville, Tennessee and with additional offices in Chattanooga and
Nashville, Tennessee; Atlanta, Georgia; Washington, D.C.; and
Clearwater, Florida
B. Defendants' Unlawful Activities
In May, 1997, FCSSI was formed to negotiate jointly on behalf of
its member physicians with MCPs and to use their collective strength to
improve ``overall managed care reimbursement'' to FCSSI surgeons,
including ``[o]btaining contract terms more favorable than if each
physician contracted separately.'' FCSSI retained PYA to coordinate
FCSSI surgeons' MCP contracting activities. For these services, each
FCSSI surgeon paid PYA $75 per month as a retainer and a set amount per
MCP contract negotiated by PYA, providing for higher payments to PYA
for higher contractual fee levels.
In July, 1997, PYA contacted United HealthCare (``United'') and
made clear to United that it was representing FCSSI surgeons ``as a
group.'' United made an offer to FCSSI surgeons through PYA. PYA
recommended to FCSSI's board that it not accept United's contract offer
and either make a counter offer or ``have all members terminate their
[United contracts].'' FCSSI's board instructed PYA to make a
counteroffer to United. PYA then informed United that unless United
agreed to its demands, it would recommend that FCSSI surgeons terminate
their United contracts. United agreed to PYA's contract demands, and
FCSSI's board voted to accepted the revised contract. The jointly
negotiated contracts paid FCSSI surgeons 30% more than United's first
offer and represented an average annual increase in revenue of $5,013
for each FCSSI physician.
In September, 1997, PYA attempted to renegotiate FCSSI surgeons'
existing contracts with Aetna US Healthcare (``Aetna''). PYA advised
Aetna that if Aetna met PYA's proposed financial and contractual terms,
PYA would recommend that FCSSI surgeons accept the Aetna contract.
Aetna subsequently offered FCSSI surgeons a contract that
[[Page 5837]]
PYA viewed as ``no improvement'' and without ``concessions.'' PYA
recommended that all FCSSI surgeons notify Aetna of their intent to
terminate their contracts in order to allow PYA to negotiate higher
fees. FCSSI's board of directors voted to accept PYA's recommendation
and, on September 26, 1997, PYA notified each FCSSI surgeon of the
board's decision and directed the surgeon to write a termination letter
to Aetna. Twenty-eight of the twenty-nine FCSSI surgeons terminated
their Aetna contracts. As a result of this group boycott, Aetna
proposed increased payment levels for FCSSI surgeons.
By December 8, 1997, PYA had contacted four other MCPs on behalf of
FCSSI surgeons. Upon learning of the Department of Justice's
investigation of FCSSI's activities in December, 1997, however, FCSSI
and PYA ceased negotiating contracts with those MCPs. Without the
proposed relief, these negotiations would likely resume.
By contracting on behalf of all of its member surgeons or none at
all, FCSSI forced some MCPs to pay FCSSI surgeons substantially higher
fees and to contract with a greater number of general and vascular
surgeons than the MCP had previously contracted with to service its
members. According to the President of FCSSI, FCSSI's joint negotiating
efforts ``produced extraordinary results,'' amounting to an increase in
revenues of $14,097 on average for each FCSSI surgeon. As a result of
FCSSI's and PYA's concerted actions, MCPs, employees, and individual
consumers faced significantly higher healthcare costs and were deprived
of the benefits of free and open competition among Tampa general and
vascular surgeons in the purchase of their services.
C. FCSSI's and PYA's Improper Use of the ``Messenger Model''
While engaging in the unlawful conduct outlined above, FCSSI and
PYA representatives attempted to cloak their illegal activities as
those of a legitimate ``third-party messenger,'' which are described in
the Department of Justice and Federal Trade Commission Statements of
Antitrust Enforcement Policy in Healthcare, 4 Trade Reg. Rep. (CCH)
para.13,153 at 20,831 (August 28, 1996). However, defendant's illegal
conduct is inconsonant with that of a legitimate messenger model. A
legitimate messenger does not coordinate or engage in collective
pricing activity for competing independent physicians, enhance their
bargaining power, or facilitate the sharing of price and other
competitively sensitive information among them.
III. Explanation of the Proposed Final Judgment
The proposed Final Judgment is intended to prevent FCSSI and PYA
from restraining competition in the future among general and vascular
surgeons in Tampa.
A. Scope of the Proposed Final Judgment
Section III of the proposed Final Judgment provides that the Final
Judgment shall apply to FCSSI, including its member physicians; to PYA,
when providing, or supervising the provision of, services to any
competing physicians in Hillsborough, Pinellas, or Pasco County,
Florida; and to all other persons who receive actual notice of the
proposed Final Judgment by personal service or otherwise and then act
or participate in active concert with any of the above persons.
B. Prohibitions and Obligations
Section IV of the proposed Final Judgment sets forth the
substantive injunctive provisions. Section IV(A) is designed to prevent
FCSSI from collectively negotiating or acting as a messenger or agent
with any payer on behalf of any FCSSI or other competing physicians or
in any way enhancing their bargaining power.\1\ Thus, Sections IV(A)(1)
and (5) prohibit FCSSI from facilitating an agreement between competing
physicians about ``competitively sensitive information'' (as that term
is defined in the Final Judgment) or communicating or facilitating the
communication of ``competitively sensitive information'' to, or in the
presence of, competing physicians. Sections IV(A)(2) and (3) prohibit
FCSSI from acting as or using a messenger or agent to represent FCSSI
surgeons in negotiations or communications with payers or from
facilitating an agreement among competing physicians about the use of a
messenger or about dealing only through a messenger. In addition,
Section IV(A)(4) enjoins FCSSI from negotiating with any payer on
behalf of any FCSSI physicians. Finally, Section IV(A)(6) prohibits
FCSSI from facilitating any agreement among competing physicians that
FCSSI will deal with a payer only through a particular agent.
---------------------------------------------------------------------------
\1\ Section II(F) defines a messenger to mean a person that
communicates to a payer any competitively sensitive information it
obtains, individually, from a participating physician or
communicates, individually, to a participating physician any
competitively sensitive information it obtains from a payer.
---------------------------------------------------------------------------
Section IV(B) is designed to ensure that PYA does not engage in
joint negotiations on behalf of competing physicians in the three
counties around Tampa, Hillsborough, Pinellas, or Pasco Counties (the
``Tampa area''), where PYA has been active in seeking physician
clients, and does not act as a messenger or agent for more than twenty
percent of FCSSI's surgeons. Accordingly, Sections IV(B)(1) and (2)
prohibit PYA from facilitating any agreement between competing
physicians in the Tampa area about any competitively sensitive
information or exclusively using a messenger. Sections IV(B)(3) and (4)
prohibit PYA, in the Tampa area, from negotiating payer contracts on
behalf of competing physicians and from making any recommendations to
competing physicians about any payer contract or contract term.
Moreover, pursuant to Sections IV(B)(5)-(7), PYA may not communicate
competitively sensitive information in the presence of competing
physicians in the Tampa area or communicate to competing Tampa area
physicians any subjective opinion or analysis about competitively
sensitive information or discourage any competing physician in the
Tampa area from exercising his or her own business judgment in
determining whether to negotiate, contract, or deal directly with any
payer.
Section IV(B)(8) enjoins PYA from acting as or using a messenger on
behalf of FCSSI or any group of competing physicians in the Tampa area
if past or present members of FCSSI constitute more than twenty percent
of any individual group's membership or all groups' total membership.
Further, PYA may act as a messenger only if it complies with the
provisions of Section IV(B)(9). Pursuant to Sections IV(B)(9)(a)-(c),
PYA must (a) notify all payers with which it communicates as a
messenger that the payer may communicate directly with the physicians;
(b) inform all physicians for whom it acts as a messenger that he or
she may communicate with any payer (without PYA) at any time; and (c)
inform each physician and payer involved that it cannot negotiate
collectively or individually for any physician who uses PYA as a
messenger. Section IV(B)(9)(d) requires PYA to inform physicians of a
payer's decision not to communicate through PYA. Under Sections
IV(B)(9)(e) and (f), PYA must communicate all competitively sensitive
information from a payer separately to each individual physician, and
if a physician discloses competitively sensitive information to PYA,
then PYA may disclose that information to payers only.
[[Page 5838]]
Finally, Section IV(B)(9)(g) requires PYA to memorialize in writing all
oral communications between it and any payer and physician, preserve
such records for two years, address all physician correspondence
individually, and not send any correspondence that contains a
physician's competitively sensitive information to any other physician.
Sections V(A)-(C) require FCSSI to notify each payer with which
FCSSI negotiated or is negotiating a contract, that FCSSI approached on
behalf of any FCSSI physician, or that inquires about contracting
through FCSSI, that FCSSI will no longer represent any FCSSI physician
in any manner relating to MCP contracts or contract terms. FCSSI shall
also notify, in writing, each MCP with which FCSSI has negotiated a
contract that any contract between FCSSI and that MCP may be terminated
by the MCP upon written notice to FCSSI. Section V(D) obligates FCSSI
to notify plaintiff at least 30 days before any dissolution of FCSSI,
sale or assignment of its claims or assets, or change in corporate
structure that may affect its compliance obligations under the proposed
Final Judgment.
Section VI makes clear that PYA may, at a physician's request,
communicate to the physician accurate, factual, and objective
information about a proposed payer contract offer or terms and engage
in activities reasonably necessary to facilitate lawful activities by
physician network joint ventures and multiprovider networks.
Section VII of the Final Judgment sets forth various compliance
measures. Sections VII(A) (1) and (2) and (C) require FCSSI to
distribute a copy of the Final Judgment and Competitive Impact
Statement to all current and future FCSSI physicians and to obtain and
maintain records of written certifications that they have read, will
abide by, and understand the consequences of their failure to comply
with the terms of the Final Judgment.
Sections VII(B)(1), (2), and (5) and (C) requires PYA to distribute
a copy of the Final Judgment and Competitive Impact Statement to all of
its shareholders, agents, representatives, employees, officers, and
directors who provide, or supervise the provision of, services to
competing physicians, and to any of their successors, and to obtain and
maintain records of written certifications that they have read, will
abide by, and understand the consequences of their failure to comply
with the terms of the Final Judgment.
Section VII(B)(3) requires PYA to hold an annual seminar for all of
its shareholders, agents, representatives, employees, officers, and
directors who provide, or supervise the provision of, services to
competing physicians, explaining the antitrust principles applicable to
their work, the Final Judgment's restrictions, and the implications of
violating the Final Judgment. Section VII(B)(4) ensures that PYA
maintains an internal mechanism of addressing questions from its
personnel regarding the application of antitrust laws to the
representation of competing physicians.
Section VII obligates FCSSI and PYA to certify that they have
distributed the Final Judgment and Competitive Impact Statement as
required by the Judgment and annually to certify their compliance with
the Judgment's provisions. FCSSI is also required to certify that it
has made the notifications required by Section V of the Judgment.
Finally, Section IX sets forth a series of measures by which
Plaintiff may have access to information needed to determine or secure
FCSSI's and PYA's compliance with the Final Judgment or to determine
whether the Final Judgment should be modified or terminated. Section XI
limits the term of the Final Judgment to ten years.
IV. Effect of the Proposed Final Judgment on Competition
The relief in the proposed Final Judgment is designed to remedy the
violation alleged in the Complaint and prevent its recurrence. The
Complaint alleges that FCSSI and PYA violated Section 1 of the Sherman
Act by negotiating with MCPs jointly on behalf of otherwise competing
FCSSI surgeons to obtain higher fees for their services and by
boycotting MCPs that did not provide payments for FCSSI surgeons at a
level substantially higher than those provided in individually
negotiated contracts.
The proposed Final Judgment eliminates that restraint on
competition among general and vascular surgeons in Tampa by enjoining
(1) FCSSI from acting for FCSSI physicians as a negotiator, messenger,
or agent or using PYA or any other agent as a negotiator; and (2) PYA
from acting as a negotiator for FCSSI or any other competing physicians
in the Tampa area. Moreover, PYA is not permitted to act as a messenger
for more than twenty percent of FCSSI's physicians or for any competing
physicians in the Tampa area if it does not comply with certain
provisions designed to ensure that it does not facilitate any agreement
between competing physicians about competitively sensitive information
or in any way enhance their bargaining power.
The proposed Final Judgment contains provisions adequate to prevent
further violations of the type upon which the Complaint is based and to
remedy the effects of the alleged conspiracy. The proposed Final
Judgment's injunctions should restore the benefits of free and open
competition among general and vascular surgeons in the sale of their
services in Tampa.
V. Alternative to the Proposed Final Judgment
The alternative to the proposed Final Judgment would be a full
trial on the merits of the case. In the view of the Department of
Justice, such a trial would involve substantial costs to the United
States and defendants and is not warranted because the proposed Final
Judgment provides all of the relief necessary to remedy the violation
of the Sherman Act alleged in the Complaint.
VI. Remedies Available to Private Litigants
Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any
person who has been injured as a result of conduct prohibited by the
antitrust laws may bring suit in federal court to recover three times
the damages suffered, as well as costs and a reasonable attorney's fee.
Entry of the proposed Final Judgment will neither impair nor assist in
the bringing of such actions. Under the provisions of Section 5(a) of
the Clayton Act, 15 U.S.C. 16(a), the proposed Final Judgment has no
prima facie effect in any subsequent lawsuit that may be brought
against defendants in this matter.
VII. Procedures Available for Modification of the Proposed Final
Judgment
As provided by Sections 2 (b) and (d) of the APPA, 15 U.S.C. 16 (b)
and (d), any person believing that the proposed Final Judgment should
be modified may submit written comments to Gail Kursh, Chief; Health
Care Task Force; United States Department of Justice; Antitrust
Division; 325 Seventh Street, N.W.; Room 400; Washington, D.C. 20530,
within the 60-day period provided by the Act. All comments received,
and the Government's responses to them, will be filed with the Court
and published in the Federal Register. All comments will be given due
consideration by the Department of Justice, which remains free,
pursuant to Paragraph 2 of the Stipulation with each defendant, to
withdraw its consent to the proposed Final Judgment at any time before
its entry, if the Department should determine that some modification of
the
[[Page 5839]]
Final Judgment is necessary to protect the public interest. Moreover,
Section X of the proposed Final Judgment provides that the Court will
retain jurisdiction over this action, and that the parties may apply to
the Court for such orders as may be necessary or appropriate for the
modification, interpretation, or enforcement of the proposed Final
Judgment.
VIII. Determinative Documents
No materials and documents of the type described in Section 2(b) of
the APPA, 15 U.S.C. Sec. 16(b), were considered in formulating the
proposed Final Judgment. Consequently, none are filed herewith.
Dated: January 26, 1999.
Respectfully submitted,
Denise E. Biehn,
Edward D. Eliasberg, Jr.,
Steven Kramer,
Attorneys, Antitrust Division, U.S. Dept. of Justice, 325 Seventh
Street, N.W., Room 409, Washington, D.C. 20530, Tel: (202) 307-0808,
Facsimile: (202) 514-1517.
[FR Doc. 99-2714 Filed 2-4-99; 8:45 am]
BILLING CODE 4401-11-M
