[Federal Register Volume 63, Number 183 (Tuesday, September 22, 1998)]
[Notices]
[Pages 50573-50574]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-25302]
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FEDERAL TRADE COMMISSION
[File No. 981-0154]
Dentists of Juana Diaz, Coamo, and Santa Isabel, Puerto Rico, et
al.; Analysis To Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement.
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SUMMARY: The consent agreement in this matter settles alleged
violations of federal law prohibiting unfair or deceptive acts or
practices or unfair methods of competition. The attached Analysis to
Aid Public Comment describes both the allegations in the draft
complaint that accompanies the consent agreement and the terms of the
consent order--embodied in the consent agreement--that would settle
these allegations.
DATES: Comments must be received on or before November 23, 1998.
ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,
Room 159, 6th St. and Pa. Ave., NW, Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT: William Baer or Willard Tom, FTC/H-
374, Washington, DC 20580. (202) 326-2932 or 326-2786.
SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 2.34 of
the Commission's Rules of Practice (16 CFR 2.34), notice is hereby
given that the above-captioned consent agreement containing a consent
order to cease and desist, having been filed with and accepted, subject
to final approval, by the Commission, has been placed on the public
record for a period of sixty (60) days. The following Analysis to Aid
Public Comment describes the terms of the consent agreement, and the
allegations in the complaint. An electronic copy of the full text of
the consent agreement package can be obtained from the FTC Home Page
(for September 16, 1998), on the World Wide Web, at ``http://
www.fte.gov./os/actions97.htm.'' A paper copy can be obtained from the
FTC Public Reference Room, Room H-130, Sixth Street and Pennsylvania
Avenue, NW, Washington, DC 20580, either in person or by calling (202)
326-3627. Public comment is invited. Such comments or views will be
considered by the Commission and will be available for inspection and
copying at its principal office in accordance with Section
4.9(b)(6)(ii) of the Commission's Rules of Practice (16 CFR
4.9(b)(6)(ii).
Analysis of Proposed Consent Order to Aid Public Comment
The Federal Trade Commission (``Commission'') has agreed to accept,
subject to final approval, a proposed consent order settling charges
that thirteen dentists, practicing in three municipalities in southern
Puerto Rico, violated Section 5 of the Federal Trade Commission Act.
The proposed consent agreement settles charges that these thirteen
dentists that practice in Juana Diaz, Coamo, and Santa Isabel, Puerto
Rico, have fixed prices and concertedly refused to deal with the third-
party payer selected for their region to provide services under Puerto
Rico's Health Insurance Act of 1993.
The proposed consent order has been placed on the public record for
sixty (60) days for reception of comments by interested persons.
Comments received during this period will become part of the public
record. After sixty (60) days, the Commission will again review the
agreement and the comments received and will decide whether it should
withdraw from the agreement or make final the agreement's proposed
order.
The purpose of this analysis is to facilitate public comment on the
agreement. The analysis is not intended to constitute an official
interpretation of either the proposed complaint or the proposed consent
order, or to modify their terms in any way.
The proposed consent order has been entered into for settlement
purposes only and does not constitute an admission by any of the
proposed respondents that the law has been violated as alleged in the
complaint.
[[Page 50574]]
The Complaint
The complaint charges that thirteen dentists practicing in Juana
Diaz, Coamo, and Santa Isabel, Puerto Rico, restrained competition
among dentists by, among other things, combining or conspiring to fix
the terms under which they would deal with payers and participate under
Puerto Rico's program to provide health care services to the indigent
(the ``Reform''), and to boycott the Reform if their terms were not
met. Their boycott denied services to thousands, and their concerted
effort to raise the level of reimbursement is a per se illegal group
boycott. The allegations set forth in the Commission's complaint are
summarized below.
The Administration de Seguros de Salud (``ASES''), a public
corporation, implements and administers the Reform. ASES has divided
Puerto Rico into regions, soliciting for each region bids from payers
to organize and provide services for beneficiaries. ASES currently
selects one payer with which to contract per region. That payer then
contracts with providers, including hospitals, physicians, pharmacies,
and dentists.
After reviewing bids from several payers, ASES selected La Cruz
Azul to administer the Southeast Region of the Reform beginning
October, 1994. Initially the municipalities of Juana Diaz, Coamo, and
Santa Isabel, with a combined population of 106,000 residents,were not
included in the Reform, but ASES included them in the Southeast Region
on December 20, 1995.
Beginning in September of 1995, many of the proposed respondents,
in various combinations, sometimes including other dentists, met and
discussed the impending expansion of the Southeast Region to Juana
Diaz, Coamo, and Santa Isabel, and the terms and conditions under which
they would agree to participate in the Reform. A letter was prepared to
present to La Cruz Azul, stating opposition to certain terms and
conditions, including the amount of payment, that they wanted
increased. The respondents threatened a boycott of the Reform program
if La Cruz Azul did not address their demand. During this period the
proposed respondents constituted a majority of dentists engaged in the
practice of dentistry in the municipalities of Juana Diaz, Coamo, and
Santa Isabel.
The proposed respondents met with a representative of La Cruz Azul,
and presented their letter with the terms and conditions under which
they would participate in the Reform, including price terms, for which
they sought higher reimbursement. During the meeting with La Cruz Azul,
and while a representative of La Cruz Azul was not present, the
proposed respondents discussed among themselves their response to the
terms and conditions for participation in the Reform, and agreed to
nearly identical responses. Each respondent provided La Cruz Azul
written notice that the dentist would not participate in Reform under
the terms offered by La Cruz Azul.
The proposed respondents communicated with both La Cruz Azul and
the public that they would not accept patients under the Reform. The
proposed respondents in Juana Diaz placed an advertisement in a
newspaper notifying the public they would not participate, and some
respondents conveyed their refusal to deal with the Reform in a radio
interview.
When dentists from the city of Ponce advertised their willingness
to accept Reform patients from Juana Diaz, Coamo, and Santa Isabel,
proposed respondents sought to have the Colegio de Cirujanos Dentistas
de Puerto Rico (the ``Colegio'') prohibit this advertising. The Colegio
eventually found advertisements by one of the dentists from Ponce to be
in violation of the Colegio's rules, and notified the dentist, who then
stopped advertising directed to residents of Juana Diaz, Coamo, and
Santa Isabel.
La Cruz Azul acceded to the proposed respondents' demand to raise
the level of reimbursement of dental fees under the Reform. The
proposed respondents then agreed to participate the Reform.
The proposed respondents have not integrated their practices in any
economically significant way, nor have they created efficiencies
sufficient to justify their acts or practices described above.
The complaint charges that the conduct of the proposed respondents,
by fixing the compensation upon which dentists would participate in the
Reform, raised the cost of and limited access to dental services funded
by the Reform, and thereby deprived the Commonwealth of Puerto Rico,
payers, and consumers the benefits of competition among dentists.
The Proposed Consent Order
The proposed consent order would prohibit each of the proposed
respondents from concertedly 1) negotiating on behalf of any other
dentist with any payer or provider; 2) refusing to deal, boycotting, or
threatening to boycott any payer or provider; or 3) determining any
terms, conditions, or requirements upon which dentists will deal with
any provider, including, but not limited to, terms of reimbursement.
Notwithstanding these provisions, however, the proposed consent
order would not prevent any of the proposed respondents from operating,
or participating in, legitimate arrangements. First, any of the
proposed respondents, if operating through a ``qualified risk-sharing
joint arrangement,'' may enter agreements to provide dental services.
Such arrangements cannot restrict the dentists' ability to participate
in any other arrangements, and all participants in the arrangement must
share substantial financial risk from their participation in the
arrangement.
Second, any of the proposed respondents, if operating through a
``qualified clinically integrated joint arrangement,'' may enter into
agreements to provide dental services if they have provided the
Commission with adequate prior notification. Such arrangements could
not restrict participating dentists' ability to participate in other
arrangements with payers, and the participating providers in the
arrangement would have to participate in active and ongoing programs
designed to control costs and ensure the quality of the services
provided.
Part III of the proposed order would require that each proposed
respondent distribute copies of the order and accompanying complaint,
as well as certified Spanish translations, to each payer or provider,
who at any time since January 1, 1995, has communicated any desire,
willingness, or interest in contracting for dentists' goods and
services.
Parts IV and V of the order impose certain reporting requirements
in order to assist the Commission in monitoring compliance with the
order.
The proposed consent order would terminate 20 years after the date
it is issued.
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 98-25302 Filed 9-21-98; 8:45 am]
BILLING CODE 6750-01-M
