[Federal Register Volume 59, Number 184 (Friday, September 23, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-23581]


[[Page Unknown]]

[Federal Register: September 23, 1994]


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FEDERAL TRADE COMMISSION
[File No. 901 0032]

 

Medical Staff of Good Samaritan Regional Medical Center; 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, the members of the medical staff from 
agreeing, or attempting to enter into an agreement, to prevent or 
restrict the services offered by Good Samaritan, the clinic, or any 
other health care provider by refusing to deal with others offering 
health care services, or by withholding patient referrals.

DATES: Comments must be received on or before November 22, 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 the 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

    The Federal Trade Commission, having initiated an investigation of 
certain acts and practices of the Medical Staff of Good Samaritan 
Regional Medical Center, hereinafter referred to as ``proposed 
respondent,'' and it now appearing that the 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 the proposed respondent and its 
attorney, and counsel for the Federal Trade Commission that:
    1. Proposed respondent Medical Staff of Good Samaritan Regional 
Medical Center is an unincorporated association, organized and existing 
under the laws of the State of Arizona, with its mailing address at 
1111 E. McDowell Road, Phoenix, Arizona 85062.
    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 with respect thereto 
publicly released. The Commission thereafter may either withdraw its 
acceptance of this agreement and so notify the 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 the proposed 
respondent, (1) issue its complaint corresponding in form and substance 
with the draft of complaint corresponding in form and substance with 
the draft of complaint here attached and its decision containing the 
following order to cease and desist in disposition of the proceeding 
and (2) make information public with 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 within 
the same time provided by statute for other orders. The order shall 
become final upon service. Delivery by the United States Postal Service 
of the complaint and decision containing the agreed-to order to 
proposed respondent's address 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. The representatives and counsel of proposed respondent have read 
the proposed complaint and order contemplated hereby. They understand 
that once the order has been issued, the Medical Staff of Good 
Samaritan Regional Medical Center will be required to file 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 it becomes final.

Order

I

    It is ordered That for purposes of this order, the following 
definitions shall apply:
    A. ``Medical Staff'' means the Medical Staff of Good Samaritan 
Regional Medical Center, its successors, assigns, officers, directors, 
committees, agents, employees, and representatives.
    B. ``Good Samaritan'' means Samaritan Health Systems, formerly 
operated as two separate corporations (Samaritan Foundation and its 
subsidiary Samaritan Health Services), doing business as Good Samaritan 
Regional Medical Center, a non-profit corporation with its principal 
offices located at 1111 E. McDowell Road, Phoenix, Arizona 85062, its 
subsidiaries, affiliates, successors, assigns, officers, 
administrators, directors, committees, agents, employees, and 
representatives.
    C. ``SPC'' means Samaritan Physicians Center, Inc., an Arizona 
Corporation, its subsidiaries, affiliates, successors, assigns, 
officers, administrators, directors, committees, agents, employees, and 
representatives.
    D. ``Integrated joint venture'' means a joint arrangement to 
provide health care services in which physicians who would otherwise be 
competitors pool their capital to finance the venture, by themselves or 
together with others, and share a substantial risk of loss from their 
participation in the venture.

II

    It is ordered That respondent Medical Staff, directly or 
indirectly, or through any device, shall cease and desist from entering 
into, maintaining, or continuing, or attempting to enter into, 
maintain, or continue, any agreement or understanding, either express 
or implied, between or among its members or with other physicians, 
providers of health care services, medical societies, hospitals, or 
medical staffs, for the purpose or with the effect of preventing or 
restricting the offering or delivery of health care services by Good 
Samaritan, SPC or any other provider of health care services, including 
any agreement to:
    A. Refuse to deal, threaten to refuse to deal, or attempt to induce 
others to refuse to deal or threaten to refuse to deal; and
    B. Withhold patient referrals, threaten to withhold patient 
referrals, or attempt to induce others to withhold patient referrals or 
threaten to withhold patient referrals.

III

    A. It is further ordered That this order shall not be constructed 
to prohibit the Medical Staff or its members from offering to 
participate or participating with other physicians, pursuant to the 
Medical Staff's bylaws, in bona fide utilization review, quality 
assurance, or credentialling activities in connection with the 
provision of physician services.
    B. It is further ordered That this order shall not be construed to 
prohibit any individual member of the Medical Staff from entering into 
an agreement or combination with any other physician or health care 
practitioner with whom the individual Medical Staff member practices in 
partnership or in a professional corporation, or who is employed by the 
same person as said Medical Staff member.
    C. It is furthered ordered That this order shall not be construed 
to prohibit respondent Medial Staff from forming, facilitating the 
formation of, or participating in, an ``integrated joint venture'' that 
limits the number of participating physicians, as long as the 
physicians participating in the joint venture remain free to deal with 
other persons or entities other than through the joint venture.

IV

    It is further ordered That the Medical Staff shall:
    A. Within thirty (30) days after the date this order becomes final, 
mail a copy of this order and the accompanying compliant to each member 
of the Medical Staff as of the date this order becomes final, and for a 
period of three (3) years after the date this order becomes final, 
distribute to each new member of the Medical Staff a copy of this order 
and the accompanying compliant within thirty (30) days after he or she 
is officially admitted to the Medical Staff.
    B. For a period of three (3) years after the date this order 
becomes final, maintain records adequate to describe in detail any 
action taken in connection with the activities covered by this order 
and, upon reasonable notice, make such records available to the Federal 
Trade Commission staff for inspection and copying.
    C. Within sixty (60) days after the date this order becomes final, 
annually for three (3) years on the anniversary of the date this order 
becomes final, and at such other times as the Federal Trade Commission 
may by written notice require, file with the Federal Trade Commission a 
report setting forth in detail the manner and form in which it has 
compiled and is complying with this order.
    D. Notify the Commission at least thirty (30) days prior to any 
proposed change in the respondent, such as dissolution, assignment, or 
sale resulting in the emergence of a successor corporation or 
association, or any other change in the association which may affect 
compliance obligations arising out of this order.

Medical Staff of Good Samaritan Regional Medical Center Analysis of 
Proposed Consent Order to Aid Public Comment

    The Federal Trade Commission has accepted an agreement to a 
proposed consent order from the Medical Staff of Good Samaritan 
Regional Medical Center (``the Medical Staff''). The Agreement settles 
charges by the Federal Trade Commission that the Medical Staff 
restrained competition by, among other things, combining or conspiring 
to threaten to boycott Good Samaritan Regional Medical Center (``Good 
Samaritan'') in order to induce termination of Good Samaritan's 
involvement with a multispecialty physicians' clinic.
    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 members of the Medical Staff joined in 
a common plan to threaten to boycott Good Samaritan in order to induce 
termination of Good Samaritan's involvement with the Samaritan 
Physician Center multispecialty physicians' clinic (``SPC''). At 
various times during, and in furtherance of, the conspiracy, the 
Medical Staff allegedly:
    A. Threatened to boycott Good Samaritan by representing to Good 
Samaritan that doctors would jointly withhold patient admissions if 
Good Samaritan continued its relationship with SPC; and
    B. Solicited physicians on the Medical Staff to threaten to 
withhold patient admissions from Good Samaritan if Good Samaritan 
continued its relationship with SPC.
    The complaint alleges that the effects of the Medical Staff's 
conduct have been to restrain trade unreasonably and hinder competition 
in the provision of health care services in Maricopa County, Arizona in 
the following ways, among others:
    A. Depriving consumers of the price and quality benefits of 
competition between SPC and independent fee-for-service practitioners;
    B. Depriving consumers of the full array of services that Good 
Samaritan sought to offer consumers in Maricopa County;
    C. Hindering SPC's ability to offer health care services to 
consumers by raising its costs, reducing its efficiency, and delaying 
or preventing SPC from offering specialty and subspecialty services;
    D. Limiting competition among physicians in Maricopa County to the 
extent that physicians agreed not to compete with each other, but 
rather act only on collectively determined terms, in deciding whether 
to admit patients to Good Samaritan, to refer patients to SPC 
physicians, or otherwise to deal with Good Samaritan; and
    E. Raising impediments to entry into the physician services market 
by innovative or nontraditional providers of health care services.

The Proposed Consent Order

    The proposed consent order would prohibit the Medical Staff from 
entering into, or attempting to enter into, any agreement or 
understanding between or among its members or with other physicians, 
providers of health care services, medical societies, hospitals, or 
medical staffs, for the purpose or with the effect of preventing or 
restricting the offering or delivery of health care services.
    The proposed consent order specifically would prohibit any 
agreement to:
    A. Refuse to deal, threaten to refuse to deal, or attempt to induce 
others to do so; and
    B. withhold patient referrals, threaten to withhold patient 
referrals, or attempt to induce others to do so.
    The proposed order would not prohibit:
    1. The Medical Staff or its members from participating with other 
physicians, pursuant to the Medical Staff's bylaws, in bona fide 
utilization review, quality assurance, or credentialling activities in 
connection with the provision of physician services;
    2. Any individual member of the Medical Staff from entering into an 
agreement with any other physician or health care practitioner with 
whom the individual Medical Staff member practices in partnership or in 
a professional corporation, or who is employed by the same person as 
said Medical Staff member; or
    3. The Medical Staff from forming, facilitating the formation of, 
or participating in, an ``integrated joint venture'' that limits the 
number of participating physicians, as long as the physicians 
participating in the joint venture remain free to deal with other 
persons or entities other than through the joint venture.
    The Medical Staff agreed to the order for settlement purposes only, 
and the Medical Staff's agreement to the order does not constitute an 
admission by the Medical Staff that the law has been violated as 
alleged in the complaint.
Benjamin I. Berman,
Acting Secretary.

Statement of Commissioner Roscoe B. Starek, III

    I do not agree with the Commission's decision to accept the consent 
agreement in this matter because I do not find the evidence sufficient 
to support reason to believe that the proposed respondent violated the 
law.
    The centerpiece of this case is a resolution adopted by the medical 
staff of Good Samaritan Regional Medical Center concerning plans under 
consideration by the Medical Center to develop a multispecialty medical 
clinic that would compete with staff members' private practices. That 
resolution--approved on November 14, 1988, following certain medical 
staff members' complaints about plans for the clinic--declared that 
those plans ``were instituted without the approval of any [m]edical 
[s]taff member or committee.'' In the wake of the resolution, the 
Medical Center decided to ``freeze'' the development and planned 
expansion of the clinic, and eventually the Medical Center severed its 
financial and other ties to the clinic.
    Neither the language of the medical staff resolution nor the other 
information unearthed in this investigation establishes to my 
satisfaction the validity of the core allegation here--that in order to 
end the Medical Center's involvement with the clinic, medical staff 
members combined to threaten a boycott of the Medical Center (which 
they would effect by referring patients to other area hospitals). 
Although individual physicians on the medical staff made clear to the 
Medical Center's administration their displeasure with the Medical 
Center's role in support of the clinic, the November 14, 1988 
resolution and surrounding events are insufficient to show an agreement 
to threaten a boycott. This case rests almost exclusively--and in my 
view precariously--on the purported boycott victims' characterization 
of the medical staff's collective state of mind. Because of the 
ambiguities and weaknesses that plague the evidence in the present 
case, I respectfully dissent from the decision to accept the consent 
agreement.

[FR Doc. 94-23581 Filed 9-22-94; 8:45 am]
BILLING CODE 6750-01-M