M.D.s Hope Bill Will Provide Bargaining Power

Never say die when it comes to bills in Congress. Reps. John Conyers (D-Mich.) and Bob Barr (R-Ga.), who serve on the House of Representatives Judiciary Committee, revived antitrust legislation last month that would allow independent physicians to bargain collectively with health plans.

The House had passed a similar antitrust bill in 2000, but the Senate never took action on it.

Jay Cutler, J.D., director of APA’s Division of Government Relations, said, “APA strongly supports the legislation, which would enable psychiatrists to more effectively advocate on behalf of their patients when negotiating with large health plans.”

Under the bill, physicians and other health care professionals who are not employed by other entities could band together to negotiate with health plans and hospitals about their contracts and fees when such negotiation would promote competition. Physicians would not be permitted to strike.

If physicians are challenged on whether they exceeded the scope of the law in engaging in collective bargaining, the bill requires that a “rule of reason” standard be applied.

That standard says: “In any action under the antitrust laws challenging the efforts of two or more physicians or other health care professionals to negotiate with a health plan, the conduct of such physicians or health care professionals shall not be deemed illegal per se, but shall be judged on the basis of its reasonableness, taking into account all relevant factors affecting competition, including patient access to health care, the quality of health care received by patients, and contract terms or proposed contract terms.”

The bill calls for the creation of demonstration projects in selected states to test various collective-bargaining models with the goal of enhancing the “efficiency, quality, and availability of health care, while promoting competition in the health care market.”

In one model, there would be no restrictions on joint negotiations, excluding strikes and price fixing. Another model would have more government oversight. No state will be permitted to have more than one demonstration project.

The bill would limit antitrust violation damages to actual damages, plus interest. Currently violators must pay three times the actual damages.

“In this era of dominating managed-care health plans, this legislation would bring important relief to patients,” said Cutler.

The market power of insurance companies has increased tremendously since the early 1990s, according to a November 2001 study by the AMA. For example, since 1995, 321 managed care mergers and acquisitions have occurred. “This unprecedented consolidation has provided health plans with significant leverage over health care professionals and patients in determining the scope, coverage, and quality of medical care,” reported the AMA.

The insurance industry and employers opposed the 2000 bill, and the American Association of Health Plans (AAHP) denounced it as “irresponsible” when it was introduced in March. The AAHP protested that the bill would drive up costs at a time when national spending on health care is already climbing at the fastest rate in more than a decade, according to the March 8 Congressional Daily Monitor.

“Our doctors should not face the possibility of criminal prosecution simply for making an effort to improve patient care and limit the financial costs to consumers,” said Barr in a press statement. “Yet this is exactly what happened to a group of doctors in Savannah several years ago when they came together in an effort to limit the skyrocketing costs of obstetrical services. Simply by meeting to discuss efforts to reach fair negotiations with the HMOs, the Federal Trade Commission filed civil and criminal actions against them.”

The Health Care Antitrust Improvements Act of 2002 can be accessed on the Web at thomas.loc.gov by searching on the bill number, HR 3897. ▪