[Federal Register Volume 60, Number 218 (Monday, November 13, 1995)]
[Notices]
[Pages 57017-57021]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-27939]
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DEPARTMENT OF JUSTICE
Antitrust Division
U.S. v. Vision Service Plan; Proposed Revised Final Judgment and
Revised Competitive Impact Statement
Notice is hereby given pursuant to the Antitrust Procedures and
Penalties Act, 15 U.S.C. Section 16 (b) through (h), that a proposed
Revised Final Judgment, a Superseding Stipulation, and a Revised
Competitive Impact Statement have been filed with the United States
District Court for the District of Columbia in United States of America
v. Vision Service Plan, Case No. 1:94CV02693.
The Complaint in the case alleges that Vision Service Plan (VSP)
entered into so-called ``most favored nation'' agreements with its
panel doctors in unreasonable restraint of trade, in violation of
Section 1 of the Sherman Act, 15 U.S.C. 1, by effectively restricting
the willingness of panel doctors to discount fees for vision care
services and substantially reducing discounted fees for vision care
services.
[[Page 57018]]
The proposed Revised Final Judgment eliminates VSP's most favored
nation clause and enjoins VSP from engaging in other actions that would
limit future discounting by its participating doctors. The proposed
Revised Final Judgment modifies a few provisions of the original
proposed Final Judgment in view of VSP's experience while operating
under the terms of the original proposed Final Judgment, pursuant to a
Stipulation with the Government, pending approval of a Final Judgment
by the Court. The specific revisions, and the reason for making them,
are summarized and explained in the Revised Competitive Impact
Statement.
Public comment on the proposed Revised Final Judgment is invited
within the statutory 60-day comment period. Such comments and responses
thereto will be published in the Federal Register and filed with the
Court. Comments should be directed to Gail Kursh, Chief; Professions &
Intellectual Property Section/Health Care Task Force; United States
Department of Justice; Antitrust Division; 600 E Street, NW., Room
9300; Washington, DC 20530 (telephone: (202) 307-5799).
Rebecca P. Dick,
Deputy Director of Operations, Antitrust Division.
In the United States District Court for the District of Columbia:
United States of America, Plaintiff, vs. Vision Service Plan,
Defendant.
[Case No. 1:94CV02693 TPJ]
Superseding Stipulation
It is stipulated by and between the undersigned parties, by their
respective attorneys, that:
1. This Superseding Stipulation supersedes the Stipulation of the
parties filed with the Court on December 15, 1994.
2. The Court has jurisdiction over the subject matter of this
action and over each of the parties hereto, and venue of this action is
proper in the District of Columbia.
3. The parties consent that a Revised Final Judgment in the form
hereto attached may be filed and entered by the Court, upon the motion
of any party or upon the Court's own motion, at any time after
compliance with the requirements of the Antitrust Procedures and
Penalties Act (15 U.S.C. 16), and without further notice to any party
or other proceedings, provided that plaintiff has not withdrawn its
consent, which it may do at any time before the entry of the proposed
Final Judgment by serving notice thereof on defendant and by filing
that notice with the Court.
4. Defendant agrees to be bound by the provisions of the proposed
Revised Final Judgment pending its approval by the Court. If plaintiff
withdraws its consent, or if the proposed Revised Final Judgment is not
entered pursuant to the terms of the Superseding Stipulation, this
Stipulation shall be of no effect whatsoever, and the making of this
Stipulation shall be without prejudice to any party in this or in any
other proceeding.
For Plaintiff:
Anne K. Bingaman,
Assistant Attorney General.
Joel I. Klein,
Deputy Assistant Attorney General.
Rebecca P. Dick,
Deputy Director, Office of Operations.
Gail Kursh,
D.C. Bar #293118, Chief.
David C. Jordan,
D.C. Bar #914093, Ass't. Chief Professions & Intellectual Property
Section, Antitrust Division, U.S. Department of Justice.
Steven Kramer
Richard S. Martin,
Attorneys, Antitrust Division, U.S. Dept. of Justice, 600 E Street,
NW., Room 9420, BICN Bldg., Washington, DC 20530 (202) 307-0997.
For Defendant:
John J. Miles,
D.C. Bar #364054, Ober, Kaler, Grimes & Shriver, Fifth Floor, 1401 H
Street, NW., Washington, DC 20005-2202 (202) 326-5008.
Barclay L. Westerfeld,
General Counsel, Vision Service Plan, 3333 Quality Drive, Rancho
Cordova, CA 95670, (916) 851-5000.
In the United States District Court for the District of Columbia
United States of America, Plaintiff, vs. Vision Service Plan,
Defendant.
[Case No. 1:94CV02693 TPJ]
Revised Final Judgment
Plaintiff, United States of America, filed its Complaint on
December 15, 1994. Plaintiff and Defendant, by their respective
attorneys, have consented to the entry of this Final Judgment without
trial or adjudication of any issue of fact or law. This Final Judgment
shall not be evidence against or an admission by any party about any
issue of fact or law or that any violation of law has occurred.
Therefore, before the taking of any testimony and without trial or
adjudication of any issue of fact or law herein, and upon consent of
the parties, it is hereby
ORDERED, ADJUDGED, AND DECREED, as follows:
I
Jurisdiction
This Court has jurisdiction over the subject matter of this action
and over each of the parties consenting hereto. The Complaint states a
claim upon which relief may be granted against the Defendant under
Section 1 of the Sherman Act, 15 U.S.C. 1.
II
Definitions
As used herein, the term:
(A) ``Defendant'' or ``VSP'' means Vision Service Plan;
(B) ``Panel Doctor's Agreement'' means the VSP Panel Member
Agreement by which Defendant contracts with optometrists or
ophthalmologists, including all amendments and additions, in effect at
any time since January 1, 1992, and during the term of this Final
Judgment;
(C) ``Most Favored Nation Clause'' means:
(1) the clause characterized as a Fee Non-Discrimination Clause in
paragraph 6 of the VSP Panel Doctor's Agreement, pursuant to which each
VSP member doctor agrees:
(a) not to charge fees to VSP that are any higher than those
charged to the doctor's non-VSP patients, nor those that the doctor
accepts from any other non-governmental group, group plan, or panel;
(b) If a published VSP fee schedule would cause payment in excess
of the doctor's usual and customary fee, to notify VSP and accept such
lower fee as is consistent with the doctor's usual and customary fees;
and
(c) if VSP determines that the doctor is charging fees to VSP that
are higher than those charged non-VSP patients, VSP shall reduce the
doctor's fees accordingly; or
(2) any other existing or future clause in the VSP Panel Doctor's
Agreement, VSP policy, or VSP practice having the same purpose or
effect, in whole or in part.
(D) ``Non-VSP patients'' means patients who are not members of a
plan insured or administered by VSP.
(E) ``Non-VSP plan'' means any plan (other than VSP) responsible
for all or part of any expense for vision care services, provided to
plan members, pursuant to contractual terms with providers of vision
services limiting the fees that providers collect for serving the
plan's members.
(F) ``Usual and customary fees'' means the fees for services and
materials that are charged, before any discounting, by VSP panel
doctors to their private
[[Page 57019]]
patients (patients not covered by Medicare or Medicaid programs).
(G) ``VSP panel doctor'' means any optometrist or ophthalmologist
who has entered into, or who has applied to enter into, a VSP Panel
Doctor's Agreement.
III
Applicability
This Final Judgment applies to:
(A) the Defendant and to its successors and assigns, and to all
other persons (including VSP panel doctors) in active concert or
participation with any of them, who have received actual notice of the
Final Judgment by personal service or otherwise; and
(B) the Most Favored Nation Clause, as defined in Section II(C) of
this Final Judgment, but to no other clause of the VSP Panel Doctor's
Agreement, VSP policy, or VSP practice.
IV
Prohibited Conduct
Except as permitted in Section V, Defendant is enjoined and
restrained from:
(A) maintaining, adopting, or enforcing a Most Favored Nation
Clause in any VSP Panel Doctor's Agreement, corporate bylaws, policies,
rules, regulations, or by any other means or methods;
(B) maintaining, adopting, or enforcing any policy or practice
linking payments made by VSP to any VSP panel doctor to fees charged by
the doctor to any non-VSP patient or any non-VSP plan;
(C) differentiating VSP's payments to, or other treatment of, any
VSP panel doctor because the doctor charges any fee lower than that
charged by the doctor to VSP, to any non-VSP patient or to any non-VSP
plan;
(D) taking any action to discourage any VSP panel doctor from
participating in any non-VSP plan or from offering or charging any fee
lower than that paid to the doctor by VSP to any non-VSP patient or any
non-VSP plan;
(E) monitoring or auditing the fees any VSP panel doctor charges
any non-VSP patient or any non-VSP plan; and
(F) communicating in any fashion with any VSP panel doctor
regarding the doctor's participation in any non-VSP plan or regarding
the doctor's fees charged to any non-VSP patient or to any non-VSP
plan.
V
Permitted Activities
Despite any prohibition contained in Section IV of this Final
Judgment,
(A) for the purpose of calculating payments to be made to its panel
doctors, Defendant may request annually that a VSP panel doctor report
the doctor's usual and customary fee, for each applicable service,
provided by the doctor during a preceding period of up to 12 months
ending no later than 2 months before the information must be reported,
provided that such information is requested uniformly from all panel
doctors within a meaningful geographic area comprising zip codes;
(B) Defendant may calculate the fees that it pays to a VSP panel
doctor for services rendered to VSP patients based on the panel
doctor's usual and customary fees, provided that Defendant employs a
uniform method of calculation at least within each meaningful
geographic area, comprising zip codes, in which it does business;
(C) only for the purposes of verifying whether the information
reported by a VSP panel doctor, pursuant to Section V(A), is accurate
or of investigating a VSP panel doctor's suspected excessive billing to
VSP, upon reasonable belief that the reported fees may be inaccurate or
excessive, and subject to the reasonable convenience of the VSP panel
doctor, Defendant may audit the VSP panel doctor's charges to patients;
(D) consistently with Sections IV (C) and (D), Defendant may devise
and utilize a fee system for doctors who apply for VSP panel membership
after the date of this Final Judgment that is different from the system
used to compensate current panel doctors, and that system may be based
on the average fees VSP pays in a meaningful geographic area comprising
zip codes;
(E) consistently with Sections IV (C) and (D), Defendant may elect
to maintain current fees for panel doctors at their existing levels and
may base any future fee increases on the Consumer Price Index, VSP's
own financial growth, or any other meaningful economic indicator;
(F) consistently with Sections IV (C) and (D), Defendant may impose
penalties on panel doctors who have misrepresented their usual and
customary fees; and
(G) when acting as an agent of the Medicare program or any state
Medicaid program, Defendant may administer the payment methodologies
employed by such programs, provided that any fee information, that VSP
is required to collect from its panel doctors in administering any such
payment methodology, is not considered by VSP in determining the fees
that it pays its panel doctors for services rendered to patients not
covered by these programs.
VI
Nullification
The Most Favored Nation Clause shall be null and void and Defendant
shall impose no further obligation arising from it on any VSP panel
doctor. Within 60 days of entry of this Final Judgment, Defendant shall
disseminate to each present VSP panel doctor an addendum to the Panel
Doctor's Agreement, nullifying the Most Favored Nation Clause, and
Defendant shall eliminate the Most Favored Nation Clause from all Panel
Doctor's Agreements entered into after entry of this Final Judgment.
VII
Compliance Measures
The Defendant shall:
(A) distribute, within 60 days of the entry of this Final Judgment,
a copy of this Final Judgment to: (1) all VSP officers and directors;
(2) VSP employees who have any responsibility for approving,
disapproving, monitoring, recommending, or implementing any provisions
in agreements with VSP panel doctors; and (3) all present VSP panel
doctors and all former VSP panel doctors whom VSP should reasonably
know have resigned because of the Most Favored Nation Clause;
(B) distribute in a timely manner a copy of this Final Judgment to
any officer, director, or employee who succeeds to a position described
in Section VII(A) (1) or (2);
(C) obtain from each present or future officer, director, or
employee designated in Section VII(A) (1) or (2), within 60 days of
entry of this Final Judgment or of the person's succession to a
designated position, a written certification that he or she: (1) Has
read, understands, and agrees to abide by the terms of this Final
Judgment; and (2) has been advised and understands that his or her
failure to comply with this Final Judgment may result in conviction for
criminal contempt of court;
(D) maintain a record of persons to whom the Final Judgment has
been distributed and from whom, pursuant to Section VII(C), the
certification has been obtained;
(E) The Defendant shall notify all former VSP panel doctors whom it
should reasonably know have resigned because of the Most Favored Nation
Clause, that they are reinstated, on terms and conditions that VSP may
establish consistently with this Final Judgment, unless they do not
desire reinstatement; and
(F) report to the Plaintiff any violation of the Final Judgment.
[[Page 57020]]
VIII
Certification
(A) Within 75 days of the entry of this Final Judgment, the
Defendant shall certify to the Plaintiff whether it has: (1)
disseminated contractual addenda pursuant to Section VI, (2)
distributed the Final Judgment in accordance with Section VII(A), and
(3) obtained certifications in accordance with Section VII(C).
(B) For five years after the entry of this Final Judgment, on or
before its anniversary date, the Defendant shall file with the
Plaintiff an annual Declaration as to the fact and manner of its
compliance with the provisions of Sections IV, V, VI, and VII.
IX
Plaintiff's Access
(A) To determine or secure compliance with this Final Judgment and
for no other purpose, duly authorized representatives of the Plaintiff,
upon written request of the Assistant Attorney General in charge of the
Antitrust Division and on reasonable notice to the Defendant made to
its principal office, shall be permitted, subject to any legally
recognized privilege:
(1) access during the Defendant's office hours to inspect and copy
all documents in the possession or under the control of the Defendant,
who may have counsel present, relating to any matters contained in this
Final Judgment; and
(2) subject to the reasonable convenience of the Defendant and
without restraint or interference from it, to interview officers,
employees or agents of the Defendant, who may have Defendant's counsel
and/or their own counsel present, regarding such matters.
(B) Upon the written request of the Assistant Attorney General in
charge of the Antitrust Division made to the Defendant's principal
office, the Defendant shall submit such written reports, under oath if
requested, relating to any matters contained in this Final Judgment as
may be reasonably requested, subject to any legally recognized
privilege.
(C) No information or documents obtained by the means provided in
Section IX shall be divulged by the 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, 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 the
Defendant to Plaintiff, the 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 the 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 the Defendant prior to divulging such material in
any legal proceeding (other than a grand jury proceeding) to which the
Defendant is not a party.
Further Elements of the Final Judgment
(A) This Final Judgment shall expire five years from the date of
its entry.
(B) Jurisdiction is retained by this Court for the purpose of
enabling either of the parties to this Final Judgment, but not 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.
(C) Entry of this Final Judgment is in the public interest.
Dated: ______________
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United States District Judge
In the United States District Court for the District of Columbia
United States of America, Plaintiff, vs. Vision Service Plan,
Defendant.
[Case No. 1:94CV02693 TPJ]
Revised Competitive Impact Statement
I
Background
Pursuant to Section 2(b) of the Antitrust Procedures and Penalties
Act, 15 U.S.C. 16(b)-(h), the United States submits this Revised
Competitive Impact Statement relating to the proposed Revised Final
Judgment submitted for entry in this civil antitrust proceeding. These
documents are styled as ``Revised'' because they reflect changes made
to a few of the provisions of the proposed Final Judgment, filed on
December 15, 1994, as the basis for settling this antitrust lawsuit,
and in related portions of the Competitive Impact Statement, filed on
January 13, 1995, and published at 60 Fed. Reg. 5110-17 (1995).
This civil antitrust action commenced on December 15, 1994, when
the United States filed a Compliant alleging that Vision Service Plan
(VSP), in all or parts of the 46 states and the District of Columbia in
which VSP operates vision care plans, entered into agreements with its
panel doctors that unreasonably restrain competition by restraining
discounting of fees for vision care services in violation of Section 1
of the Sherman Act, 15 U.S.C. 1. The Complaint seeks injunctive relief
to enjoin continuance of the violation.
The previously filed Competitive Impact Statement is incorporated
by reference herein, except as modified by this Revised Competitive
Impact Statement. The Government has agreed to the revisions of the
proposed Final Judgment that are contained in the proposed Revised
Final Judgment and outlined below to remedy certain problems VSP has
experienced while operating under the terms of the proposed Final
Judgment since it was filed, pursuant to a Stipulation with the
Government, pending the Court's approval of the Final Judgment.
II
Explanation of the Proposed Final Judgment
A. Definitions
A definition of ``VSP panel doctor'' has been added as Section
II(G) of the proposed Revised Final Judgment to clarify that to the
extent provisions of the Final Judgment prohibit VSP from taking, or
permit VSP to take, specified actions regarding the doctors on its
panel, those provisions apply in the same manner also to doctors who
have applied for panel membership. In addition, the definitions of
``modal fee'' and ``median fee,'' which had been Sections II (F) and
(G) of the original proposed Final Judgment, have been deleted because,
as explained below, VSP will no longer collect or use information
concerning the modal or median fees of its panel doctors in calculating
payments to be made to them. A definition of ``usual and customary
fees'' has been added as a new Section II(F) because, as explained
below, VSP will be permitted to collect and use information concerning
the usual and customary fees that its panel doctors charge in
calculating VSP's payments to them.
B. Permitted Activities and Obligations
The proposed Revised Final Judgment modifies Section V of the
original proposed Final Judgment. Generally, Section V permits VSP to
undertake prescribed activities in determining payments to its panel
doctors that could otherwise violate applicable injunctive provisions
of Section IV. The proposed
[[Page 57021]]
Revised Final Judgment adds a new Section V(G) and revises Sections V
(A), (B), (C), and (F).
The addition of Section V(G) is the primary basis for submitting
the Revised Final Judgment. Section V(G) permits VSP to implement the
reimbursement methodologies of any Medicare program or any state
Medicaid program that it may administer. VSP acts as the agent for
those programs in several states, but, in negotiating the proposed
Final Judgment, VSP simply overlooked the Final Judgment's possible
restriction upon its ability to carry out its obligations to those
governmental programs. Section V(G) of the proposed Revised Final
Judgment, therefore, makes clear that nothing in the Judgment should be
construed to prevent VSP from gathering fee information required by
Medicare or Medicaid, while precluding VSP from using that fee
information in setting the fees that VSP pays its panel doctors for
providing services to VSP patients not covered by Medicare or Medicaid
programs.
Sections V (A), (B), (C), and (F) of the proposed Revised Final
Judgment have been changed to reflect that VSP will no longer maintain
the option, contained in the original proposed Final Judgment, to
calculate the payments made to its panel doctors based on a doctor's
modal or median fee and to collect and, if warranted, verify the
accuracy of, the fee data from its panel doctors needed to make such
calculations. Pursuant to revised Sections V (A), (B), (C) and (F), VSP
will now merely retain the option of calculating the fees that it pays
panel doctors based on their usual and customary fees, and it will no
longer be permitted to request panel doctors annually to report
``sufficient information'' or, if warranted, verify the accuracy of the
reported information, to enable VSP ``to calculate'' a doctor's modal
or median fee. Rather, VSP will simply be permitted to ask each panel
doctor to report annually only the doctor's usual and customary fees
before any discounts are applied, and it will be allowed, if warranted,
to verify only that fee information. These changes will substantially
reduce both the level of detail of fee information that VSP will be
permitted to obtain routinely from its panel doctors and the resultant
reporting requirements it may impose on VSP panel doctors.
VSP requested these changes because of difficulties encountered
during the past several months in trying to calculate the modal and
median fees of its panel doctors pursuant to the terms of the original
proposed Final Judgment. Based on that experience, VSP has concluded
that it does not routinely need to obtain more detailed fee information
from its panel doctors than an annual report of each doctor's usual and
customary fees, as now provided by Sections V (A) and (B) of the
proposed Revised Final Judgment. The Government is amendable to making
these requested changes because they narrow the scope of activities
permitted by VSP under the Final Judgment and raise no competitive
concerns.
III
Procedures Available for Modification of the Proposed Revised Final
Judgment
As provided by the Antitrust Procedures and Penalties Act, any
person believing that the proposed Revised Final Judgment should be
modified may submit written comments to Gail Kursh, Chief; Professions
& Intellectual Property Section/Health Care Task Force; Department of
Justice; Antitrust Division; 600 E Street, N.W.; Room 9300; Washington,
D.C. 20530, within the 60-day period provided by the Act. Comments
received, along with comments already received on the previously
published Competitive Impact Statement, and the Government's responses
to them, will be filed with the Court and published in the Federal
Register. All comments will be given due consideration by the
Department of Justice, which remains free, pursuant to Paragraph 2 of
the Stipulation, to withdraw its consent to the proposed Revised Final
Judgment at any time before its entry if the Department should
determine that some modification of the Judgment is necessary to the
public interest. The proposed Revised Final Judgment itself provides
that the Court will retain jurisdiction over this action, and that the
parties may apply to the Court for such orders as may be necessary or
appropriate for the modification, interpretation, or enforcement of the
Judgment.
IV
Determinative Documents
No materials and documents of the type described in Section 2(b) of
the Antitrust Procedures and Penalties Act, 15 U.S.C. 16(b), were
considered in formulating the proposed Revised Final Judgment.
Consequently, none are filed herewith.
Dated: ______________
Respectfully submitted,
----------------------------------------------------------------------
Steven Kramer
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Richard S. Martin,
Attorneys, Antitrust Division, U.S. Dept. of Justice, 600 E Street,
N.W., Room 9420, Washington, D.C. 20530, (202) 307-0997.
In the United States District Court for the District of Columbia
United States of America, Plaintiff, vs. Vision Service Plan,
Defendant.
[Case No. 1:94CV02693 TPJ]
Certificate of Service
I certify that I caused copies of the Revised Final Judgment,
Revised Competitive Impact Statement and Superseding Stipulation to be
served on October ____, 1995, by Federal Express to: Barclay L.
Westerfeld, General Counsel, Vision Service Plan, 3333 Quality Drive,
Rancho Cordova, California 95670, and by courier to: John J. Miles,
Ober, Kaler, Grimes & Shriver, 1401 H Street, NW., Fifth Floor,
Washington, DC 20005-2110.
Dated: ______________.
----------------------------------------------------------------------
Steven Kramer,
Attorney, Antitrust Division, Department of Justice, 600 E Street, NW.,
Room 9420, Washington, DC 20530, (202) 307-1029.
[FR Doc. 95-27939 Filed 11-9-95; 8:45 am]
BILLING CODE 4410-01-M