[Federal Register Volume 59, Number 13 (Thursday, January 20, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-1372]


[[Page Unknown]]

[Federal Register: January 20, 1994]


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FEDERAL TRADE COMMISSION
[File No. 911 0121]

 

McLean County Chiropractic Association; Proposed Consent 
Agreement With Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: In settlement of alleged violations of federal law prohibiting 
unfair acts and practices and unfair methods of competition, this 
consent agreement, accepted subject to final Commission approval, would 
prohibit, among other things, an association of Illinois chiropractors 
from agreeing to set fees for patients, or terms for third-party payor 
contracts, and would require the association to give members copies of 
the settlement.

DATES: Comments must be received on or before March 21, 1994.

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:Mark Horoschak, FTC/S-3115, Washington, 
DC 20580. (202) 326-2756.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Sec. 2.34 of the 
Commission's Rules of Practice (16 CFR 2.34), notice is hereby given 
that the following 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 this public record for 
a period of sixty (60) days. 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 
Sec. 4.9(b)(6)(ii) of the Commission's Rules of Practice (16 CFR 
4.9(b)(6)(ii)).

Agreement Containing Consent Order To Cease and Desist

    In the matter of McLean County Chiropractic Association, an 
unincorporated association.

    The Federal Trade Commission having initiated an investigation of 
certain acts and practices of proposed respondent named in the caption 
hereof, and it now appearing that proposed respondent is willing to 
enter into an agreement containing an order to cease and desist from 
the use of the acts and practices being investigated,
    It is hereby agreed by and between proposed respondent and their 
attorney, and counsel for the Federal Trade Commission that:
    1. Proposed respondent is an unincorporated association, with its 
principal offices and places of business in McLean County, Illinois. 
For purposes of this agreement and order, its address is as follows: 
McLean County Chiropractic Association, c/o George R. Flynn, Esq., P.O. 
Box 3574, Bloomington, IL 61702-3574.
    2. Proposed respondent admits all the jurisdictional facts set 
forth in the draft of complaint here attached.
    3. Proposed respondent waives:
    (a) Any further procedural steps;
    (b) The requirement that the Commission's decision contain a 
statement of findings of fact and conclusions of law;
    (c) All rights to seek judicial review or otherwise to challenge or 
contest the validity of the order entered pursuant to this agreement; 
and
    (d) Any claim under the Equal Access to Justice Act.
    4. This agreement shall not become part of the public record of the 
proceeding unless and until it is accepted by the Commission. If this 
agreement is accepted by the Commission it, together with the draft of 
complaint contemplated thereby, will be placed on the public record for 
a period of sixty (60) days and information in respect thereto publicly 
released. The Commission thereafter may either withdraw its acceptance 
of this agreement and so notify proposed respondent, in which event it 
will take such action as it may consider appropriate, or issue and 
serve its complaint (in such form as the circumstances may require) and 
decision, in disposition of the proceeding.
    5. This agreement is for settlement purposes only and does not 
constitute an admission by proposed respondent that the law has been 
violated as alleged in the draft of complaint here attached.
    6. This agreement contemplates that, if it is accepted by the 
Commission, and if such acceptance is not subsequently withdrawn by the 
Commission pursuant to the provisions of Sec. 2.34 of the Commission's 
Rules, the Commission may, without further notice to proposed 
respondent, (1) issue its complaint corresponding in form and substance 
with the draft complaint here attached and its decision containing the 
following order to cease and desist in disposition of the proceeding 
and (2) make information public in respect thereto. When so entered, 
the order to cease and desist shall have the same force and effect and 
may be altered, modified or set aside in the same manner and with the 
same time provided by statute for other orders. The order shall become 
final upon service. Delivery by the U.S. Postal Service of the 
complaint and decision containing the agreed-to order to proposed 
respondent's addresses as stated in this agreement shall constitute 
service. Proposed respondent waives any right it may have to any other 
manner of service. The complaint may be used in construing the terms of 
the order, and no agreement, understanding, representation, or 
interpretation not contained in the order or the agreement may be used 
to vary or contradict the terms of the order.
    7. Proposed respondent has read the proposed complaint and order 
contemplated hereby. It understands that once the order has been 
issued, it will be required to file one or more compliance reports 
showing that it has fully complied with the order. Proposed respondent 
further understands that it may be liable for civil penalties in the 
amount provided by law for each violation of the order after the order 
becomes final.

Order

I
    It is ordered, That for purposes of this order, the following 
definitions shall apply:
    A. ``Respondent MCCA'' means McLean County Chiropractic Association 
and its Board of Directors, committees, officers, representatives, 
agents, employees, successors, and assigns.
    B. ``Payor'' means any person that purchases, reimburses for, or 
otherwise pays for health care services for themselves or for any other 
person--including, but not limited to, health insurance companies; 
preferred provider organizations; prepaid hospital, medical, or other 
health service plans; health maintenance organizations; government 
health benefits programs; employers or other persons providing or 
administering self-insured health benefits programs; and patients who 
purchase health care for themselves.
    C. ``Integrated joint venture'' means a joint arrangement to 
provide health care services in which all chiropractors participating 
in the venture who would otherwise be competitors (1) pool their 
capital to finance the venture, by themselves or together with others, 
and (2) share a substantial risk of loss from their participation in 
the venture.
    D. ``Case fee'' means the aggregate total of all fees charged to a 
patient for the full course of treatment for a medical condition or 
combination of medical conditions. ``Case fee'' does not mean a fee 
charged for a particular product or service.
II
    It is further ordered, That respondent MCCA directly or indirectly, 
or through any device, in connection with activities in or affecting 
commerce, as ``commerce'' is defined in the Federal Trade Commission 
Act, as amended, do forthwith cease and desist from:
    A. Entering into, attempting to enter into, organizing, continuing, 
or acting in furtherance of any agreement or combination, express or 
implied, with any chiropractors or among any chiropractors, to discuss 
or collectively determine the fees which chiropractors charge to 
payors; and
    B. Entering into, attempting to enter into, organizing, continuing, 
or acting in furtherance of any agreement or combination, express or 
implied, with any chiropractors or among any chiropractors, to deal 
with payors on collectively determined terms.
    Provided, That, nothing in this order shall prevent chiropractors 
who practice together as partners or employees in the same professional 
corporation or partnership from collectively determining the fees to be 
charged for services provided by that professional corporation or 
partnership or from collectively determining other terms on which that 
professional corporation or partnership deals with payors.
    Further provided, That, nothing in this order shall prevent 
chiropractors who participate in the same integrated joint venture from 
collectively determining the fees to be charged for services provided 
by that integrated joint venture or from collectively determining other 
terms on which that integrated joint venture deals with payors.
    Further provided, That, nothing in this order shall prevent 
respondent MCCA from collecting historical data concerning case fees 
for the purpose of providing such data to payors.
III
    It is further ordered, That respondent MCCA:
    A. File a written report with the Commission within ninety (90) 
days after the date when the order becomes final, and annually for 
three (3) years on the anniversary of the date when the order becomes 
final, and at such other times as the Commission may by written notice 
to respondent MCCA require, setting forth in detail the manner and form 
in which it has complied and is complying with the order.
    B. For a period of five (5) years after the date when the order 
becomes final, maintain and make available to Commission staff, for 
inspection and copying upon reasonable notice, records adequate to 
describe in detail any action taken in connection with the activities 
covered by Parts II and III of this order, including, but not limited 
to, all documents generated by respondent MCCA or that come into its 
possession, custody, or control, regardless of source, that discuss, 
refer, or relate to any fee, term, or condition of any agreement, 
actual or proposed, with any payor.
    C. Distribute by first-class mail a copy of this order to each of 
its members within thirty (30) days after the date when the order 
becomes final.
    D. For a period of five (5) years after the date when the order 
becomes final, provide each new MCCA member with a copy of this order 
at the time the member is accepted into membership.
    E. Notify the Commission, at least thirty (30) days prior to any 
proposed change to respondent MCCA which may affect compliance with 
this order--including, but not limited to, dissolution or the emergence 
of a successor.

McLean County Chiropractic Association Analysis of Proposed Consent 
Order To Aid Public Comment

    The Federal Trade Commission has accepted, subject to final 
approval, the agreement to a proposed consent order from McLean County 
Chiropractic Association (``MCCA''). The agreement settles charges by 
the Federal Trade Commission that MCCA restrained competition by, among 
other things, combining or conspiring both (1) To fix the maximum fees 
charged by MCCA members and (2) to negotiate the terms and conditions 
of agreements between MCCA members and third-party payors.
    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 Complaint

    Under the terms of the agreement, a proposed complaint would be 
issued by the Commission along with the proposed consent order. The 
proposed complaint alleges that MCCA has thirteen members, of whom all 
are chiropractors with offices in McLean County, Illinois. MCCA's 
members compete among themselves and with other chiropractors to offer 
chiropractic services in and around McLean County.
    The complaint further alleges that MCCA acted as a combination of 
its members, conspired with at least some of its members, and acted to 
implement an agreement among its members to restrain competition among 
chiropractors in McLean County, Illinois, and its vicinity. Such 
actions included facilitating, entering into, and implementing an 
agreement under which
    A. MCCA would set the maximum fees to be charged by MCCA members; 
and
    B. MCCA would negotiate agreements between its members and third-
party payors, including the fees to be paid to MCCA members under such 
agreements.
    In furtherance of this combination or conspiracy, MCCA periodically 
voted to raise such limits on maximum fees, and attempted to negotiate 
such agreements between its members and third-party payors.
    The complaint alleges that the above actions of MCCA had, or had 
the tendency and capacity to have, the following effects:
    A. Restraining competition among chiropractors in McLean County, 
Illinois, and its vicinity;
    B. Fixing or affecting the fees that chiropractors in McLean 
County, Illinois, and its vicinity charge for their services; and
    C. Depriving consumers of chiropractic services and third-party 
payors of the benefits of competition among chiropractors in McLean 
County, Illinois, and its vicinity.
    Finally, the complaint alleges that the above actions of MCCA 
constitute unfair methods of competition in violation of Section 5 of 
the Federal Trade Commission Act, 15 U.S.C. 45.

The Proposed Consent Order

    The proposed consent order would prohibit MCCA from entering into, 
organizing, or acting in furtherance of, any agreement or combination 
with or among chiropractors.
    A. To discuss or set the fees to be charged by chiropractors, or
    B. To deal on collectively determined terms with anyone who pays 
for health services,
    The order specifically provides that it does not prevent the 
following:
    1. Chiropractors who practice together as partners or employees in 
the same professional corporation or partnership collectively 
determining the fees to be charged by that professional corporation or 
partnership.
    2. Chiropractors who participate in the same integrated joint 
venture collectively determining the fees to be charged by that 
integrated joint venture. (For purposes of the consent order, 
``integrated joint venture'' means a joint arrangement to provide 
health care services in which all chiropractors participating in the 
venture would otherwise be competitors (1) pool their capital to 
finance the venture, by themselves or together with others, and (2) 
share a substantial risk of loss from their participation in the 
venture.)
    3. The collection of historical data concerning case fees for the 
purpose of providing such data to those who pay for health services. 
(For purposes of the consent order, ``case fee'' means the aggregate 
total of all fees charged to a patient for the full course of treatment 
for a medical condition or combination of medical conditions, and does 
not mean a fee charged for a particular product or service.)
    The order would require MCCA to distribute copies of the order to 
its members and, for five years, to its new members when they join 
MCCA.
    The order also requires MCCA to (1) file compliance reports with 
the Commission, (2) maintain certain files relating to MCCA's 
compliance with the order, and (3) notify the Commission of any 
proposed change in MCCA that may affect MCCA's compliance with the 
order.
    MCCA agreed to the order for settlement purposes only, and MCCA's 
agreement to the order does not constitute an admission by MCCA that 
the law has been violated as alleged in the complaint.
Donald S. Clark,
Secretary.
[FR Doc. 94-1372 Filed 1-19-94; 8:45 am]
BILLING CODE 6750-01-M