[Federal Register Volume 62, Number 42 (Tuesday, March 4, 1997)]
[Notices]
[Pages 9807-9812]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-5151]
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DEPARTMENT OF JUSTICE
Antitrust Division
United States v. Delta Dental of Rhode Island; Proposed Final
Judgment and 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
Final Judgment, a Stipulation, and a Competitive Impact Statement have
been filed with the United States District Court for the District of
Rhode Island in United States of America v. Delta Dental of Rhode
Island, Civil Action No. 96-113P.
The Complaint in the case alleges that Delta Dental of Rhode Island
(``Delta'') entered into so-called ``most favored nation'' agreements
with its panel dentists in unreasonable restraint of trade, in
violation of Section 1 of the Sherman Act, 15 U.S.C. Sec. 1. Delta, a
broad-panel plan contracting with over 90% of Rhode Island's dentists,
required that participating dentists offer no lower price to competing
dental plans. The agreements effectively restricted the willingness of
panel dentists to discount fees for dental care and blocked competition
from narrow-panel, lower cost dental plans.
The proposed Final Judgment eliminates Delta's most favored nation
clause and enjoins Delta from engaging in other actions that would
limit future discounting by its participating dentists.
Public comment on the proposed 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; Health Care Task
Force; United States Department of Justice; Antitrust Division; Liberty
Place; 325 7th Street, NW., Room 404, Washington, DC 20530 (202/307-
5799).
Rebecca P. Dick,
Deputy Director of Operations, Antitrust Division, United States
Department of Justice.
United States District Court for the District of Rhode Island
[Civil Action No. 96-113P]
United States of America, Plaintiff, vs. Delta Dental of Rhode
Island, Defendant.
Stipulation
It is stipulated by and between the undersigned parties, their
respective attorneys, that:
1. The Court has jurisdiction over the subject matter of this
action and over both of the parties, and venue of this action is proper
in the District of Rhode Island.
2. The parties consent that a Final Judgment in the form attached
may be filed and entered by the Court, upon the motion of either party
or upon the Court's own action, 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 any by filing that notice with the Court.
3. If Plaintiff withdraws its consent, or if the proposed Final
Judgment is not entered pursuant to the terms of this Stipulation, this
Stipulation shall be of no effect whatsoever, and the making of this
Stipulation shall be without prejudice to either party in this or in
any other proceeding.
4. Defendant agrees to be bound by the provisions of the proposed
Final Judgment pending its approval by the Court.
Dated: ______.
For Plaintiff
Joel I. Klein,
Acting Assistant Attorney General.
A. Douglas Melamed,
Deputy Assistant Attorney General.
Rebecca P. Dick,
Deputy Director, Office of Operations.
Gail Kursh,
Chief, Health Care Task Force.
David C. Jordan,
Assistant Chief, Health Care Task Force, Antitrust Division,
Department of Justice, Washington, D.C. 20530.
For Defendant
William R. Landry, #494,
Blish & Cavanagh, Commerce Center, 30 Exchange Terrace, Providence,
R.I. 02903-1765, (401) 831-8900.
Steven Kramer,
William E. Berlin,
Mark J. Botti,
Michael S. Spector,
Richard S. Martin,
Attorneys, Antitrust Division, Department of Justice, 325 7th
Street, N.W., Washington, D.C. 20530, (202) 307-0997.
Sheldon Whitehouse,
United States Attorney, District of Rhode Island.
By: Anthony DiGioia,
Ass't. U.S. Attorney, 10 Dorrance Street, Providence, R.I. 02903,
(401) 528-5477.
William G. Kopit,
Espstein Becker & Green, 1227 25th Street, N.W., Washington, D.C.
20037, (202) 861-9000.
United States District Court for the District of Rhode Island
[Civil Action No. 96-113P]
United States of America, Plaintiff, vs. Delta Dental of Rhode
Island, Defendant.
Final Judgment
Plaintiff, United States of America, filed its Complaint on
February 29, 1996. Plaintiff and Defendant, by their respective
attorneys, have consented to the entry of this Final Judgment without
trial or final adjudication of any issue of fact or law. This Final
Judgment shall not be evidence against or an admission by any party of
any issue of fact or law, nor a determination that any violation of law
has occurred. Therefore, before the taking of any trial testimony and
without trial of any issue of fact or law, and upon consent of the
parties, it is
Ordered, adjudged, and decreed, as follows:
I. Jurisdiction
This Court has jurisdiction over the subject matter of this action
and over each of the consenting parties. The Complaint states a claim
upon which relief may be granted against Delta under Section 1 of the
Sherman Act, 15 U.S.C. 1.
II. Definitions
As used herein, the term:
(A) ``Defendant'' or ``Delta'' means Delta Dental of Rhode Island.
(B) ``Participating Dentist's Agreement'' means Delta's agreement
with dentists for the provision of dental services to Delta's
subscribers, including Delta's Rules and Regulations referenced in the
agreement, and all amendments and additions to any such agreement.
(C) ``Participating Dentist'' means any dentist who has agreed to
comply with the terms of the Participating Dentist's Agreement.
(D) ``Most Favored Nation Clause'' means:
[[Page 9808]]
(1) paragraph 10 of Delta's Rules and Regulations, sometimes
characterized as Delta's ``Prudent Buyer Policy,'' pursuant to which:
``Delta Dental reserves the right to limit reimbursements to dentists
to such levels as such dentists have agreed to accept as reimbursement
from other non-governmental dental benefits reimbursement programs;''
or
(2) any contractual provision, policy, or practice which requires a
dentist to charge Delta no more than the lowest fee charged by that
dentist to any non-Delta plan or patient.
(E) ``Usual and customary fees'' means the fees for services and
material that dentists usually charge, before any discounting, to their
patients.
III. Applicability
This Final Judgment applies to Delta and to its successors and
assigns, and to all other persons (including Participating Dentists) in
active concert or participation with any of them, who have received
actual notice of the Final Judgment by personal service or otherwise.
IV. Prohibited Conduct
Delta is enjoined and restrained from:
(A) maintaining, adopting, or enforcing any Most Favored Nation
Clause or similar provision in any Participating Dentist's Agreement,
or by any other means or methods;
(B) maintaining, adopting, or enforcing any policy or practice
varying Delta's payments to, or other treatment of, any dentist because
the dentist charges any non-Delta patient or plan a fee lower than the
fee the dentist charges Delta;
(C) taking any action to discourage any dentist from participating
in any non-Delta plan or from offering or charging to any non-Delta
patient, or any non-Delta plan, any fee lower than that paid to the
dentist by Delta; and
(D) monitoring, auditing, or obtaining from any dentist the fees a
particular dentist charges any non-Delta patient or any non-Delta plan,
except as provided in Section V.
V. Permitted Activities
Nothing herein shall be construed so as to preclude Delta from:
(A) establishing preferred provider networks or other forms of
limited panels of providers, including discounted fee panels,
recruiting dentists who are participating with other dental plans in
similar panels, and negotiating bi-lateral fee arrangement with such
dentists, provided that such activity does not violate any provision of
Section IV;
(B) establishing provider reimbursement levels as may be reasonable
and necessary to respond to market conditions and having different
reimbursement levels for different categories or panels of providers,
provided that Delta's criteria for differentiation in reimbursement
among categories or panels of dentists are not based on their
participation in other dental plans, on fees those dentists offer other
dental plans or persons, or on fees those dentists agree upon with
other dental plans or persons; and
(C) collecting through otherwise lawful means, including use of a
survey sent to all Participating Dentists, (1) Participating Dentists'
usual and customary fees for each applicable service, provided that
such information is collected uniformly from all Participating
Dentists; and (2) data and information, including reimbursement levels,
regarding other dental plans.
VI. Nullification
Delta's Most Favored Nation Clause shall be null and void and Delta
shall impose no obligation arising from it on any Participating
Dentist. Within 90 days of entry of this Final Judgment, Delta shall
disseminate to each Delta Participating Dentist revised Rules and
Regulations, referenced in the Participating Dentist's Agreement, that
omit the Most Favored Nation Clause. Delta shall eliminate the Most
Favored Nation Clause from all Participating Dentist's Agreements
entered into after entry of this Final Judgment.
VII. Compliance Measures
The Delta shall:
(A) distribute, within 60 days of the entry of this Final Judgment,
a copy of this Final Judgment to: (1) all Delta officers and directors;
and (2) all Delta employees who have any responsibility for approving,
disapproving, monitoring, recommending, or implementing any provisions
in agreements with Participating Dentists.
(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) distribute, within 60 days of the entry of this Final Judgment,
a copy of the attached letter, which has been approved by the Antitrust
Division, by first-class mail to all currently Participating Dentists;
and
(F) report to the Plaintiff any violation of the Final Judgment.
VIII. Certification
(A) Within 100 days of the entry of this Final Judgment, Delta
shall certify to the Plaintiff whether it has: (1) disseminated revised
Rules and Regulations pursuant to Section VI; (2) distributed the Final
Judgment in accordance with Section VII(A); (3) obtained certifications
in accordance with Section VII(C); and (4) distributed copies of the
attached letter in accordance with Section VII(E).
(B) For ten years after the entry of this Final Judgment, on or
before its anniversary date, Delta 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 to Information
(A) to determine or secure compliance with this Final Judgment,
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 Delta made to its principal office, shall
be permitted, subject to any legally recognized privilege:
(1) Access during Delta's office hours to inspect and copy all
documents in the possession or under the control of Delta, who may have
counsel present, relating to any matters contained in this Final
Judgment; and
(2) Subject to the reasonable convenience of Delta and without
restraint or interference from it, to interview officers, employees or
agents of Delta, who may have Delta'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 Delta's principal office,
Delta 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.
[[Page 9809]]
(C) Delta shall have the right to be represented by counsel in any
process under this Section.
(D) 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.
(E) If at the time information or documents are furnished by Delta
to Plaintiff, Delta 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 Delta 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 Delta prior to divulging such material in any legal
proceeding (other than a grand jury proceeding) to which Delta is not a
party.
(F) Nothing in this Final Judgment prohibits the Plaintiff from
using any other investigatory method authorized by law.
X. Further Elements of the Final Judgment
(A) This Final Judgment shall expire ten 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 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,
based on changed circumstances of fact or law warranting such action;
to enforce compliance; and to punish violations of its provisions.
(C) Entry of this Final Judgment is in the public interest.
Dated: ______.
________
United States District Judge.
Attachment
Attachment Referred to in Section VII(E)
As you may know, Delta Dental has been involved in a lawsuit
with the United States Department of Justice in the United States
District Court of Rhode Island regarding Rule 10 of Delta's Rules
and Regulations for Dentists, which is sometimes called Delta's
``Prudent Buyer'' policy. Rule 10 has allowed Delta Dental to limit
its payments to dentists to the lowest level the dentist had agreed
to accept from any other non-governmental plan or from any uninsured
patient.
Delta Dental and the Department of Justice have agreed to a
consent decree that has been entered as an order of the District
Court. As part of this consent decree, Delta has agreed to eliminate
Rule 10 if its Rules and Regulations.
The consent decree declares Rule 10 null and void and prohibits
Delta from varying its payments to, or other treatment of, any
dentist because the dentist charges any non-Delta patient or plan a
fee lower than the fee the dentists charges Delta. Within the next
thirty (30) days, we will forward to you a superseding set of Rules
and Regulations that omits Rule 10.
Sincerely yours,
________
Director of Provider Relations.
[Civil Action No. 96-113P]
United States District Court for the District of Rhode Island
United States of America, Plaintiff, vs. Delta Dental of Rhode
Island, Defendant.
Competitive Impact Statement
Pursuant to Section 2(b) of the Antitrust Procedures and Penalties
Act, 15 U.S.C. Sec. 16 (b)-(h), the United States submits this
Competitive Impact Statement describing the proposal Final Judgment
submitted to resolve this civil antitrust proceeding.
I. Nature and Purpose of the Proceeding
On February 29, 1996, the United States filed a civil antitrust
compliant alleging that Delta Dental of Rhode Island (``Delta''),
enters into agreements with its participating dentists that
unreasonably restrain completion by inhibiting discounting of fees for
denial care in violation of Section 1 of the Sherman Act, 15 U.S.C.
Sec. 1. The Compliant seeks injunctive relief to enjoin continuance of
the violation.
Entry of the proposed Final Judgment will terminate this action,
except that the Court will retain jurisdiction over the matter for any
further proceedings that may be required to interpret, enforce, or
modify the Judgment or to punish violations of any of its provisions.
II. Practices Giving Rise to the Alleged Violation
If this matter had proceeded to trial, the United States would have
introduced evidence as follows. Delta is Rhode Island's largest dental
insurer, insuring or administering plans providing insurance to about
35-45% of Rhode Island residents covered by dental insurance. Delta
seeks to offer its enrollees the broadest possible panel of dentists
and contracts with over 90% of Rhode Island dentists. Delta accounts
for a substantial percentage of the professional income of most Rhode
Island dentists.
Pursuant to Delta's Participating Dentist's Agreement (the
``Agreement''), each contracting dentist agrees to comply with Delta's
Rules and Regulations. Rule 10 of these Rules and Regulations is a Most
Favored Nation (MFN) clause, which provides that Delta has the right to
lower the fees it pays a dentist to the level of the lowest fees that
that dentist charges any other plan. Delta has applied its MFN clause
also to dentists' charges to uninsured patients. Rule 7 gives Delta the
additional right to audit dentists' records to determine whether they
are complying with the MFN clause.
In contrast to Delta's program, which by design includes as many
dentists as possible, some dental plans such as preferred provider
organizations (``PPOs'') and health maintenance organizations
(``HMOs''), contract selectively with a limited panel of dentists. By
offering the prospect of increased patient volume, these managed care
plans are able to contract with some dentists for services at fees
substantially below Delta's. These plans then create financial
incentives for their enrollees to use panel dentists. Selective
contracting with dentists helps a managed dental care plan lower the
cost of the delivery of dental service to its enrollees. Accordingly,
these plans are able to offer patents lower premiums and lower out-of-
pocket costs.
Delta currently provides so much more of most Rhode Island
dentists' income than would any entering managed care plan that if
these dentists were to reduce their fees to such plans, the resulting
reduction in their income from Delta would be much greater than their
added income from the entrant plan. Because few dentists in Rhode
Island are not under contract with Delta, and because Delta's MFN
clause gives its participating dentists strong disincentives to
contract with dental managed care plans at fees below Delta's, other
plans have been unable to form a competitively viable panel. By thus
excluding from the dental insurance market reduced-cost plans that many
consumers view as an important option, Delta's MFN clause has protected
Delta from competition from such lower-cost plans at the expense of
consumers.
In recent years, Delta's MFN clause has blocked the entry or
expansion of several low-cost plans. For example, Delta's MFN clause
caused dentists to withdraw from Dental Blue PPO--a low-cost preferred
provider organization established in the fall of 1993 by Blue
[[Page 9810]]
Cross and Blue Shield of Massachusetts to serve Raytheon employees and
their dependents, including the approximately 1,000 employees and their
dependents at Raytheon's facility in Portsmouth, Rhode Island. Dental
Blue PPO had initially succeeded in contracting with a number of Rhode
Island dentists at substantially discounted rates--rates, by Delta's
calculations, that were 14% lower than Delta's. These PPO savings would
have significantly reduced or eliminated Raytheon plan members' co-
payments.
After identifying Dental Blue PPO as a long-run competitive threat,
Delta's senior management pursued several related tactics. First, it
contacted the former chairman of the Rhode Island Dental Association
(``RIDA'')'s Council on Dental Programs, who supports Delta's MFN
clause because he believes it sets a floor on dentists' fees. He sent
RIDA's members a letter warning that because of Delta's MFN clause
dentists would face ``severe financial penalties'' if they contracted
with dental Blue PPO. Second, Delta's management sent a letter to Rhode
Island dentists who Delta knew to be participating in Dental Blue PPO,
announcing its intention to apply its MFN clause and describing the
new, reduced payment levels they would receive from delta if they
continued to participate in Dental Blue PPO.
By the end of January 1994, all of the dentists contacted by Delta
had withdrawn from Dental Blue PPO. Some of them made clear to Delta at
the time that the reason for their withdrawal was Delta's decision to
apply its MFN clause and requested that Delta return their payments to
former levels. As a result, Raytheon employees were denied the
opportunity to lower or eliminate their co-payments for dental care,
and Rhode Island was denied the entry of a low-cost dental insurance
plan.\1\
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\1\ Delta's application of its MFN clause to the Dental Blue PPO
demonstrates that Delta has not enforced the clause when a dentist,
who had initially agreed to charge another plan substantially lower
fees, then raised the fees to Delta's level or disaffiliated from
the plan. Delta's approach suggests that Delta applied its MFN
clause to prevent the entry of a new, low-cost rival, not just to
ensure that it obtained the lowest prices available.
Delta indeed did develop a contingency plan to compete on price
with Dental Blue PPO by forming its own limited-panel, reduced-fee
PPO. When Delta's MFN clause brought about the collapse of the
Dental Blue PPO, however, Delta shelved its PPO plans. Rhode Island
consumers thus remained without a limited panel, lower-cost
competitive alternative to Delta's existing, mid-range plan.
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Delta's MFN clause also caused dentists to refuse to contract, at
fees below levels paid by Delta, with at least two other lower-cost
plans. In one instance, U.S. Healthcare attempted to establish a plan
in Rhode Island (as it had in other states) that would have paid
dentists at fee levels lower than Delta's. Rhode Island dentists
uniformly refused to participate because they feared that Delta would
apply its MFN clause. Similarly, Delta's participating dentists
refused, because of Delta's MFN clause, to contract with dental Benefit
Providers (``DBP'') at fee levels below Delta's, forcing DBP to pay
Delta's higher rates to enter the market and depriving consumers of a
low-cost alternative.
Delta's MFN clause also prevented two other organizations--a self-
insured employee group and an uninsured retiree group--from recruiting
additional dentists, at fee levels substantially below Delta's, to
augment their limited panels of dentists. Both had persuaded a few
Rhode Island dentists to accept fees substantially below Delta's and
both had avoided the application of Delta's MFN clause--despite Delta's
commitment to enforce the clause--only because Delta had been unaware
of their operation. Although both wanted to expand their panels, they
refrained from recruiting additional dentists because of their concern
that such efforts would disclose their existence to Delta and trigger
Delta's enforcement of its MFN clause, causing their existing dentists
to disaffiliate. As a result, some members of these groups were denied
more accessible, low-cost dental care that would have been available in
the absence of the MFN clause.
Although the language of Delta's MFN clause appears to apply only
to fees dentists offer to insurance plans, Delta has also on occasion
enforced the MFN when dentists have lowered their fees to uninsured
patients. Some dentists who have been willing to serve uninsured
patients at reduced rates have suffered an added financial penalty
imposed by Delta. As a result, they and other dentists have been
deterred from offering discounts to uninsured patients. Delta's MFN
clause has thus raised the prices, and reduced the availability, of
dental services to some of Rhode Island's most vulnerable consumers.
By Delta's own admission, its MFN clause has not generated any
meaningful savings or other procompetitive benefits. Far from saving
consumers money, Delta's MFN clause has, in fact, eliminated most
discounting by dentists below Delta's fees, and--as recognized by the
former chairman of the RIDA's Council on Dental Programs--set a floor
on dental fees, thus raising the costs of dental services and dental
insurance for Rhode Island consumers.
III. Explanation of the Proposed Final Judgment
The Plaintiff and Delta have stipulated that the Court may enter
the proposed Final Judgment after compliance with the Antitrust
Procedures and Penalties Act, 15 U.S.C. Sec. 16(b)-(h). The proposed
Final Judgment provides that its entry does not constitute any evidence
against or admission by any party of any issue of fact or law.
Under the provisions of Section 2(e) of the Antitrust Procedures
and Penalties Act, 15 U.S.C. Sec. 16(e), the proposed Final Judgment
may not be entered unless the Court finds that entry is in the public
interest. Section X(C) of the proposed Final Judgment sets forth such a
finding.
The proposed Final Judgment is intended to ensure that Delta
eliminates its MFN clause and ceases all similar practices that
unreasonably restrain competition among dentists and dental insurance
plans.
A. Scope of the Proposed Final Judgment
Section III of the proposed Final Judgment provides that the Final
Judgment shall apply to Delta, to its successors and assigns, and to
all other persons (including Delta's participating dentists) in active
concert or participation with any of them, who shall have received
actual notice of the Final Judgment by personal service or otherwise.
In the Stipulation to the proposed Final Judgment, Delta has agreed
to be bound by the provisions of the proposed Final Judgment pending
its approval by the Court.
B. Prohibitions and Obligations
Under Section IV(A) of the proposed Final Judgment, Delta is
enjoined and restrained for a period of ten years from maintaining,
adopting, or enforcing any Most Favored Nation Clause or similar
provision in any Participating Dentist's Agreement or by any other
means or methods. Other provisions of the Final Judgment seek to ensure
that the MFN clause's anticompetitive effects cannot be achieved in
other ways. Specifically, Section IV(B) enjoins Delta from maintaining,
adopting, or enforcing any policy or practice varying its payments to,
or other treatment of, any dentist because the dentist charges any non-
Delta patient or plan a fee lower than the fee the dentist charges
Delta; Section IV(C) enjoins Delta from taking any action to discourage
any dentist from participating in any non-Delta plan or from offering
or charging to any non-
[[Page 9811]]
Delta patient, or any non-Delta plan, any fee lower than that paid to
the dentist by Delta; and Section IV(D) enjoins Delta from monitoring,
auditing, or obtaining from any dentist information about the fees a
particular dentist charges any non-Delta patient or any non-Delta plan,
except as provided in Section V.
Section V permits Delta to engage in certain specified activities
without violating the prohibitions of Section IV, including creation of
a limited-panel plan, implementation of different reimbursement levels
under certain circumstances, and collection through certain means of
information about market rates. These activities will likely
facilitate, rather than impair, competition.
Section VI of the Final Judgment declares Delta's MFN clause null
and void. It directs Delta to disseminate to each Delta participating
dentist revised Rules and Regulations, referenced in the Participating
Dentist's Agreement, that omit the Most Favored Nation Clause. This
Section also requires Delta to eliminate the Most Favored Nation Clause
from all Participating Dentist's Agreements entered into after entry of
the Final Judgment.
Section VII of the Final Judgment imposes various compliance
measures. Section VII(A) requires Delta to distribute, within 60 days
of entry of the Final Judgment, a copy of the Final Judgment to: (1)
all Delta officers and directors; and (2) all Delta employees who have
any responsibility for approving, disapproving, monitoring,
recommending, or implementing any provisions in agreements with
participating dentists. Sections VII(B)-(D) require Delta to provide a
copy of the Final Judgment to future officers, directors, and employees
who have any responsibility for approving, disapproving, monitoring,
recommending, or implementing any provisions in agreements with
participating dentists and to obtain and maintain records of such
persons' written certifications that they have read, understand, and
will abide by the terms of the Final Judgment. Section VII(E) requires
Delta to distribute a copy of a letter, approved by the Antitrust
Division and attached to the Final Judgment, to all currently
participating dentists. Section VII(F) obligates Delta to report to the
Plaintiff any violation of the Final Judgment.
Finally, Section VIII obligates Delta to certify its compliance
with specified requirements, summarized above, of Sections IV, V, VI,
and VII of the Final Judgment. In addition, Section IX sets forth a
series of measures by which the Plaintiff may have access to
information needed to determine or secure Delta's compliance with the
Final Judgment.
C. Effect of the Proposed Final Judgment on Competition
By eliminating the MFN clause, the relief imposed by the proposed
Final Judgment will enjoin and eliminate a substantial restraint on
price competition between Delta and other dental insurance plans and
among dentists in Rhode Island and its environs. It will do so by
eliminating the disincentives created by the MFN clause for dentists to
discount their fees and to join non-Delta plans offering payments below
Delta's levels. The Judgment also prevents Delta from taking any other
action to discourage dentists from discounting or participating in
competing dental insurance plans. Consequently, non-Delta plans'
efforts to attract and maintain viable panels of dentists to serve
their members will no longer be hampered.
The proposed Final Judgment will restore the benefits of free and
open competition to dental insurance plans and consumers in Rhode
Island. Consequently, limited panel dental insurance plans should be
able to achieve cost savings that they can pass on to consumers, and
consumers should be able to choose from a wider array of dental
insurance alternatives. Competition among dentists should also be
invigorated.
IV. Alternatives to the Proposed Final Judgment
The alternative to the proposed Final Judgment would be a full
trial on the merits of the case. Such a trial would involve substantial
costs to both the United States and Delta and is not warranted because
the proposed Final Judgment provides all of the relief that the United
States would likely obtain upon a favorable decision at the close of
trial and fully remedies the violations of the Sherman Act alleged in
the Complaint.
V. Remedies Available to Private Litigants
Section 4 of the Clayton Act, 15 U.S.C. Sec. 15, provides that any
person who has been injured as a result of conduct prohibited by the
antitrust laws may bring suit in federal court to recover three times
the damages suffered, as well as costs and reasonable attorney's fees.
Entry of the proposed Final Judgment will neither impair nor assist in
the bringing of such actions. Under the provisions of Section 5(a) of
the Clayton Act, 15 U.S.C. Sec. 16(a), the Final Judgment has no prima
facie effect in any subsequent lawsuits that may be brought against
Delta in this matter.
VI. Procedures Available for Modification of the Proposed Final
Judgment
As provided by the Antitrust Procedures and Penalties Act, any
person believing that the proposed Final Judgment should be modified
may submit written comments to Gail Kursh, Chief; Health Care Task
Force; Department of Justice; Antitrust Division; 325 7th Street, N.W.;
Room 404; Washington, D.C. 20530, within the 60-day period provided by
the Act. Comments received, 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 Final Judgment at any time before
its entry if the Department should determine that some modification of
the Judgment is necessary to protect the public interest. The proposed
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.
VII. 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. Sec. 16(b), were
considered in formulating the proposed Final Judgment. Consequently,
none are filed herewith.
Dated: February 19, 1997.
Respectfully submitted,
Steven Kramer,
William E. Berlin
Mark J. Botti,
Michael S. Spector,
Richard S. Martin,
Attorneys, Antitrust Division, U.S. Department of Justice, 325 7th
Street, N.W., Room 426, Washington, D.C. 20530, (202) 307-0997.
United States District Court for the District of Rhode Island
[Civil Action No. 96-113P]
United States of America, Plaintiff, vs. Delta Dental of Rhode
Island, Defendant.
Certificate of Service
I certify that I caused a copy of the Stipulation, the Final
Judgment, and the United States' Competitive Impact
[[Page 9812]]
Statement to be served on February 20, 1997, by overnight delivery to:
William R. Landry, Blish & Cavanagh, Commerce Center, 30 Exchange
Terrace, Providence, R.I. 02903-1765
and by first class mail to:
William G. Kopit, Epstein Becker & Green, 1227 25th Street, N.W.,
Washington, D.C. 20037.
Dated: February 20, 1997.
Steven Kramer,
Attorney, Antitrust Division, U.S. Department of Justice, 325 7th
Street, N.W., Room 426, Washington, D.C. 20530, (202) 307-0997.
[FR Doc. 97-5151 Filed 3-3-97; 8:45 am]
BILLING CODE 4410-11-M