UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
UNITED STATES OF AMERICA,
Plaintiff,
v.
FEDERATION OF PHYSICIANS AND
DENTISTS, INC.,
Defendant.
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CA 98-475 JJF
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FINAL JUDGMENT
Plaintiff, the United States of America, having filed its Complaint on August 12,
1998, and plaintiff and defendant Federation of Physicians and Dentists, 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 defendant has 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 defendant,
it is hereby ORDERED, ADJUDGED, AND DECREED:
I.
JURISDICTION
This Court has jurisdiction over the subject matter of, and over the plaintiff and
defendant to, this action. The Complaint states a claim upon which relief may be granted
against defendant under Section 1 of the Sherman Act, 15 U.S.C. § 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" or "competing orthopedic surgeons" means two
or more physicians (or two or more orthopedic surgeons, respectively) in separate,
private medical practices in the same specialty in the same county;
(C) "competitively sensitive information" means:
- 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 any payer contract or contract term; or
- any proposed or existing term of any payer contract that affects:
- 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;
- the duration, amendment, or termination of the payer
contract;
- utilization review and pre-certification; or
- the manner of resolving disputes between the participating
physician and the payer;
(D) "defendant" means the Federation of Physicians and Dentists, its directors,
officers, agents, representatives, and employees; its successors and assigns; and each
entity over which it has control;
(E) "messenger" means a person, including defendant or an agent for
defendant, 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;
(F) "objective information" or "objective comparison" means empirical data
that are capable of being verified or a comparison of such data;
(G) "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; for purposes of this Final Judgment, a
"participating physician" does not include physicians or other medical professional
employees who belong to a recognized or certified bargaining unit that is affiliated with
the Federation of Physicians and Dentists;
(H) "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;
(I) "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;
(J) "person" means any natural person, corporation, firm, company, sole
proprietorship, partnership, joint venture, association, institute, governmental unit, or
other legal entity;
(K) "Protocols" means a set of written guidelines, which have been adopted by
defendant for dissemination to its members to assist in the implementation and
administration of the terms of the Final Judgment and which have been approved by
plaintiff for the limited purpose of assuring that defendant's existing and future members
who do not receive a copy of this Final Judgment receive adequate notice of its terms.
These Protocols shall not diminish defendant's and its members' obligation to comply
with the terms of this Final Judgment and federal antitrust law, which are controlling in
the event of any conflict or inconsistency; and
(L) "recognized or certified bargaining unit" means a group of physicians that
have been recognized or certified pursuant to state or federal law to bargain collectively
with their common employer over wages, terms, and conditions of employment.
III.
APPLICABILITY
(A) This Final Judgment applies to defendant and to those persons in active
concert or participation with defendant, including defendant's member physicians in
private practice who receive actual notice of the Final Judgment by personal service or
otherwise.
(B) This Final Judgment shall not apply to the conduct of any physicians or
other medical professional employees who belong to recognized or certified bargaining
units that are affiliated with defendant, to the extent such conduct is reasonably related to
the lawful activities of the recognized or certified bargaining unit.
(C) Nothing contained in this Final Judgment is intended to suggest or imply
that any provision herein is or has been created or intended for the benefit of any third
party and nothing herein shall be construed to provide any rights to any third party.
IV.
INJUNCTIVE RELIEF
(A) The defendant and all other persons in active concert or participation with
defendant who receive actual notice of the Final Judgment by personal service or
otherwise are enjoined from directly or indirectly:
- participating in, encouraging, or facilitating any agreement or
understanding between competing physicians about any actual or proposed payer contract
or contract term;
- participating in, encouraging, or facilitating any agreement or
understanding between competing physicians to deal with any payer exclusively through
a messenger rather than individually or through other channels;
- negotiating, collectively or individually, on behalf of competing
physicians any actual or proposed payer contract or contract term with any payer;
- making any recommendation to competing physicians about any
actual or proposed payer contract or contract term or whether to accept or reject any such
payer contract or contract term;
- communicating any competitively sensitive information to, or in
the presence of, competing physicians;
- communicating to competing physicians any subjective opinion or
subjective analysis, evaluation, or assessment about competitively sensitive information;
- precluding or discouraging any competing physicians from
exercising his, her, or their own independent business judgment in determining whether
to negotiate, contract, or deal directly with any payer; and
- acting as a messenger for any competing physicians unless:
- defendant informs each participating physician of any
payer's decision not to communicate or to discontinue communicating with that
participating physician through defendant;
- defendant communicates all competitively sensitive
information that it receives from any payer separately to each participating physician
designated by the payer;
- defendant obtains individually from each participating
physician any competitively sensitive information that it communicates to any payer;
- defendant does not communicate any competitively
sensitive information obtained from any participating physician to anyone other than to
payers designated by the participating physician;
- defendant does not violate any of the provisions of Paragraph IV(A)(1)-(7) of this Final Judgment;
- for five (5) years from the date of entry, 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), defendant informs the payer in writing that, at any time, (i) the payer is free to
decline to communicate with any participating physician through defendant, and (ii) any
participating physician is free to communicate with the payer individually without
defendant's involvement;
- for five (5) years from the date of entry, 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), defendant informs the participating physician in writing that he
or she is free at any time to communicate with any payer individually without
defendant's involvement;
- for five (5) years from the date of entry, 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), defendant 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; and
- for five (5) years from the date of entry, defendant ensures
that (i) any oral communication between it and any payer or any participating physician
is contemporaneously memorialized in writing or by recording sufficient to show the
date, participants to, and substance of the communication and the person making the
writing or recording; (ii) such memorialization or recording and any written
communication between defendant and any payer or participating physician are preserved
for two years; (iii) any correspondence containing competitively sensitive information is
addressed individually to each participating physician; and (iv) no correspondence
between defendant and a payer that includes the competitively sensitive information of a
physician is sent to any other competing physician.
(B) The defendant's member physicians, who participate in any messenger or
any other arrangement provided by defendant, are enjoined from directly or indirectly:
- participating in, encouraging, or facilitating any agreement or
understanding among competing physicians about any competitively sensitive
information;
- participating in, encouraging, or facilitating any agreement or
understanding among competing physicians about using a messenger;
- communicating or facilitating the communication of any
competitively sensitive information to, or in the presence of, competing physicians; and
- participating in, encouraging, or facilitating any agreement or
understanding among any competing physicians that any of defendant's physician
members will deal with a payer only through a messenger or other agent or
representative.
V.
PERMITTED CONDUCT
(A) Subject to the provisions of Section IV of this Final Judgment:
- at a participating physician's request, defendant may 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;
- defendant may engage in activities reasonably necessary to
facilitate lawful activities by physician network joint ventures and multi-provider
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) ¶ 13,153
("Health Care Policy Statements") and in activities that are lawful under Statement 6 of
the Health Care Policy Statements; and
- defendant may objectively review and analyze terms and
conditions of any proposed or actual payer contract that do not constitute competitively
sensitive information and may convey or publish the results of such review and analysis
to its members in a manner that does not constitute a recommendation or suggestion as to
whether any term or condition of the payer contract should be accepted or rejected.
(B) Nothing in this Final Judgment shall prohibit defendant, or any one or
more of its members from:
- engaging or participating in lawful union organizational efforts and
activities;
- advocating or discussing, in accordance with the doctrine
established in Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365
U.S. 127 (1961), United Mine Workers v. Pennington, 381 U.S. 657 (1965), and their
progeny, legislative, judicial, or regulatory actions, or other governmental policies or
actions; and
- exercising rights protected by the National Labor Relations Act or
any state collective bargaining laws.
(C) Nothing in this Final Judgment shall prohibit
- any of defendant's members from engaging solely with other
members or employees of such member's bona fide solo practice or practice group in
activities otherwise prohibited herein; and
- any physician member of defendant (or the bona fide practice
group that employs such physician), acting alone in the exercise of his, her or its own
independent business judgment, from choosing the payer or payers with which to
contract, and/or refusing to enter into discussion or negotiations with any payer.
(D) Nothing in this Final Judgment shall prohibit or impair the right of
defendant (or any affiliate thereof) as a labor organization from communicating with
other labor organizations concerning the identity of payers who are considered pro- or
anti-union, provided such activity is consistent with § 8(b)(4) of the National Labor
Relations Act, 29 U.S.C. § 158(b)(4), and to the extent it does not constitute a secondary
boycott.
VI.
COMPLIANCE PROGRAM
Defendant shall maintain an antitrust compliance program, which shall include:
(A) distributing within 60 days from the entry of this Final Judgment,
- a copy of the Final Judgment and Competitive Impact Statement to
all of defendant's officers, directors, employees, agents, and representatives, who
provide, or supervise the provision of, services to competing physicians, and to all
existing orthopedic surgeon members practicing in Delaware; Connecticut; the greater
Dayton, Ohio area, including Montgomery County; and the greater Tampa, Florida area,
including Hillsborough, Pinellas, and Pasco Counties; and
- a copy of the Protocols to all of defendant's physician members
who are in private practice and not part of a recognized or certified bargaining unit;
(B) distributing in a timely manner,
- a copy of the Final Judgment and Competitive Impact Statement to
any person who succeeds to a position with the Federation, as described in Paragraph
VI(A)(1);
- a copy of the Protocols to any physician who is in private practice
and not part of a recognized or certified bargaining unit and who becomes a Federation
member;
(C) holding an annual seminar explaining to all of defendant's officers,
directors, employees, agents, and representatives 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;
(D) maintaining an internal mechanism by which questions from any of
defendant's officers, directors, employees, agents, and representatives about the
application of the antitrust laws to the representation of competing physicians, whether as
a messenger or as some other representative, can be answered by counsel as the need
arises;
(E) 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 defendant's officers, directors, employees, agents, and
representatives, who provide, or supervise the provision of, services to competing
physicians, and from each of defendant's physician members who receives, pursuant to
Paragraph VI(A)(1), a copy of the Final Judgment and Competitive Impact Statement,
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;
- each of defendant's physician members who is in private practice
and not part of a recognized or certified bargaining unit and who receives, pursuant to
Paragraph VI(A)(2), a copy of the Protocols, that he or she has received, read, and
understands the Protocols;
(F) obtaining, within 60 days following distribution, pursuant to
Paragraph VI(B), and retaining for the duration of this Final Judgment, a certificate from:
- each person who succeeds to a position with the Federation, as
described in Paragraph VI(A)(1), 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; and
- any physician who is in private practice and not part of a
recognized or certified bargaining unit and who becomes a member, that he or she has
received, read, and understands the Protocols; and
(G) maintaining for inspection by plaintiff a record of recipients to whom the
Final Judgment, Competitive Impact Statement, or Protocols have been distributed and
from whom written certifications, pursuant to Paragraphs VI(E) or (F), have been
received.
VII.
CERTIFICATION
(A) Within 75 days after entry of this Final Judgment, defendant shall certify
to plaintiff that it has distributed the Final Judgment, Competitive Impact Statement, and
Protocols as required by Paragraph VI(A).
(B) For a period of ten years following the date of entry of this Final
Judgment, defendant shall certify annually on the anniversary date of the entry of this
Final Judgment to plaintiff that it has complied with the provisions of this Final
Judgment.
VIII.
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 a duly authorized representative of the Assistant Attorney General in charge of the
Antitrust Division and on reasonable notice to defendant, be permitted:
- access during regular business hours to inspect and copy all
records and documents in the possession, custody, or control of defendant, which may
have counsel present, relating to any matters contained in this Final Judgment;
- to interview defendant's officers, directors, employees, agents, and
representatives, who may have individual counsel present, concerning such matters; and
- to obtain written reports from defendant, under oath if requested,
relating to any matters contained in this Final Judgment.
(B) The defendant shall have the right to be represented by counsel in any
proceeding under this Section.
(C) No information or documents obtained by the means provided in this
Section shall be divulged by 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 marks 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.
(E) The provisions of Paragraph VIII(A) do not apply to any Federation
member or to any member's group practice.
IX.
JURISDICTION RETAINED
(A) 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.
(B) If federal or state legislation enacted after the entry of this Final Judgment
permits conduct prohibited by this Final Judgment, defendant may move for and plaintiff
will reasonably consider an appropriate modification of this Final Judgment.
X.
EXPIRATION OF FINAL JUDGMENT
This Final Judgment shall expire ten (10) years from the date of entry.
XI.
PUBLIC INTEREST DETERMINATION
Entry of this Final Judgment is in the public interest.
Dated: 11/6/02
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Court approval subject to procedures of Antitrust Procedures and Penalties Act, 15 U.S.C. § 16.
_____________/s/__________________
United States District Judge |
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