[Federal Register Volume 64, Number 24 (Friday, February 5, 1999)]
[Notices]
[Pages 5831-5839]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-2714]


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DEPARTMENT OF JUSTICE

Antitrust Division
[Civil No. 99-167-CIV-T-17F]


United States of America v. Federation of Certified Surgeons and 
Specialists, Incorporated and Pershing Yoakley & Associates, P.C.

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment, 
Stipulations, and a Competitive Impact Statement have been filed with 
the United States District Court for the Middle District of Florida, 
Tampa Division, in United States of America v. Federation of Certified 
Surgeons and Specialists, Inc., and Pershing Yoakley & Associates, P.C.
    The Complaint alleges that defendants entered into an agreement 
with the

[[Page 5832]]

purpose and effect of restraining price competition, in violation of 
Section 1 of the Sherman Act, 15 U.S.C. 1, by limiting competition 
among general vascular surgeons in Tampa. The proposed Final Judgment 
enjoins the continuance or resumption of this practice. Copies of the 
Complaint, proposed Final Judgment, and Competitive Impact Statement 
are available for inspections in Room 215, 325 Seventh Street, N.W., 
United States Department of Justice, Washington, D.C. and at the Office 
of the Clerk of the United States District Court for the Middle 
District of Florida, Tampa Division, Tampa, Florida.
    Public comment on the proposed Final Judgment is invited within 60 
days of the date of this notice. 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, 325 
Seventh Street, N.W., Room 400, Washington, D.C. 20530 (telephone: 
(202) 307-5799).
Rebecca P. Dick,
Director of Civil Non-Merger Enforcement, Antitrust Division.

Notice of Filing a Proposed Final Judgment Pursuant to the 
Antitrust Procedures and Penalties Act

    The United States submits this Notice summarizing the procedures 
regarding the Court's entry of the proposed Final Judgment. The 
proposed Final Judgment would settle this case pursuant to the 
Antitrust Procedures and Penalties Act (``Act''), 15 U.S.C. 16(b)-(h), 
which applies to civil antitrust cases brought and settled by the 
United States. Under the Act, the Final Judgment is not to be entered 
until the United States certifies compliance with the requirements of 
the Act and the Court concludes that entry of the Final Judgment is in 
the public interest.
    Today, the United States has filed a civil antitrust Complaint 
charging the Federation of Certified Surgeons and Specialists, Inc., 
and Pershing Yoakley & Associates, P.C., with violating Section 1 of 
the Sherman Act. Also filed with the Complaint are a proposed Final 
Judgment, a Competitive Impact Statement, and Stipulations between the 
parties by which the defendants agree to the Court's entry of the 
proposed Final Judgment following compliance with the Act. The 
Competitive Impact Statement reflects the Act's requirement of filing a 
competitive impact statement explaining the nature of the case and the 
proposed relief.
    Under the Act, the United States must publish the proposed Final 
Judgment and the Competitive Impact Statement in the Federal Register 
and publish for 7 days over a period of 2 weeks a summary of these 
pleadings in newspapers of general circulation in the Middle District 
of Florida and the District of Columbia. The Act provides for a 60-day 
period after publication for the public to submit comments to the 
Department of Justice regarding the proposed Final Judgment. The Act 
provides that the Department shall publish in the Federal Register, and 
file with the Court, any comments received and the Department's 
response to such comments. The defendants are required to file a 
description of certain communications with the government within 10 
days after a proposed final judgment is filed. See 15 U.S.C. 
Sec. 16(g).
    Once all of the Act's requirements have been met, the United States 
will promptly file with the Court a Certificate of Compliance with the 
Act and a Motion for Entry of the Final Judgment (unless the United 
States decides to withdraw its consent to entry of the Final Judgment, 
as permitted by Paragraph 2 of the Stipulations). At that time, 
pursuant to Section 16(e)-(f) of the Act, the Court may enter the Final 
Judgment without a hearing, if it finds the Final Judgment is in the 
public interest.

    Dated January 26, 1999.

For Plaintiff
United States of America
Charles R. Wilson,
United States Attorney.

    By:
Whitney Schmidt,
Affirmative Civil Enforcement Coordinator, Assistant United States 
Attorney, Florida Bar No. 285706, 400 North Tampa Street, Suite 3200, 
Tampa, FL 33602, Tel: (813) 274-6332, Facsimile: (813) 274-6198

Denise E. Biehn,
Trial Counsel.
Steven Kramer,
Edward D. Eliasberg, Jr.,
Florida Bar No. 005725, Attorneys, Antitrust Division, U.S. Dept. of 
Justice, 325 Seventh St. N.W., Room 409, Washington, D.C. 20530, Tel: 
(202) 307-0808, Facsimile: (202) 514-1517.

Stipulation as to Defendant Federation of Certified Surgeons and 
Specialists, Inc.

    It is stipulated by and between the undersigned parties, by their 
respective attorneys, that:
    1. The Court has jurisdiction over the subject matter of this 
action and over each of the undersigned parties hereto, and venue of 
this action is proper in the Middle District of Florida;
    2. The undersigned parties consent that a Final Judgment in the 
form hereto attached may be filed and entered by the Court, upon the 
motion of either 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. Sec. 16, and without further notice to either 
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;
    3. Federation of Certified Surgeons and Specialists, Inc. 
(``FCSSI'') agrees to be bound by the provisions of this proposed Final 
Judgment pending its approval by the Court. Within ten days from the 
execution of this Stipulation, defendant FCSSI agrees to provide to all 
FCSSI physicians, as that term is defined in the proposed Final 
Judgment, copies of the proposed Final Judgment; and
    4. 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 any party in this or in any 
other proceeding.

    Dated: January 15, 1998.

For Plaintiff
United States of America:
Joel I. Klein,
Assistant Attorney General.

Donna Patterson,
Deputy Assistant Attorney General.

Rebecca P. Dick,
Director of Civil, Non-Merger Enforcement.

Gail Kursh,
Chief,
Health Care Task Force.


[[Page 5833]]


David C. Jordan,
Ass't Chief, Health Care Task Force.

Denise E. Biehn,
Steven Kramer,
Edward D. Eliasberg, Jr.,
Attorneys, U.S. Dept. of Justice, 325 7th Street, N.W., Room 400, 
Liberty Place Bldg., Washington, D.C. 20530, (202) 305-2738.

For Defendant Federation of Certified Surgeons and Specialists, 
Inc.:
David A. Ettinger, Esquire,
Honigman, Miller, Schwartz and Cohen, 2290 First National Building, 
Detroit, MI 48226.

Emil Marquardt, Jr., Esquire,
MacFarlane Ferguson & McMullen, P.A., 625 Court Street, Clearwater, FL 
33757.

Stipulation as to Defendant Pershing, Yoakley & Associates, P.C.

    It is stipulated by and between the undersigned parties, by their 
respective attorneys, that:
    1. The Court has jurisdiction over the subject matter of this 
action and over each of the undersigned parties hereto, and venue of 
this action is proper in the Middle District of Florida;
    2. The undersigned parties consent that a Final Judgment in the 
form hereto attached may be filed and entered by the Court, upon the 
motion of either 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. Sec. 16, and without further motive to either 
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; and
    3. Pershing, Yoakley & Associates, P.C. (``PYA''), agrees to be 
bound by the provisions of this proposed Final Judgment pending its 
approval by the Court. Within ten days from the execution for this 
Stipulation, defendant PYA agrees to provide to all of its 
shareholders, its agents, representatives, employees, officers, and 
directors (in such capacities only) who provides, or supervises the 
provision of, services to competing physicians with offices in 
Hillsborough, Pinellas or Pasco County, Florida, copies of the proposed 
Final Judgment; and
    4. If plaintiff withdraws its consent, or if the proposed Final 
Judgment is not entered pursuant to the terms of the 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.

    Dated: January 21, 1999.

For Plaintiff
United States of America:
Joel I. Klein,
Assistant Attorney General.

Donna Patterson,
Deputy Assistant Attorney General.

Rebecca P. Dick,
Deputy Director of Civil, Non-Merger Enforcement.

Gail Kursh,
Chief, Health Care Task Force.

David C. Jordan,
Ass't Chief, Health Care Task Force.

Denise E. Biehn,
Steven Kramer,
Edward D. Eliasberg,
Attorneys, U.S. Dept. of Justice, 325 7th Street, N.W., Room 400, 
Liberty Place Bldg., Washington, D.C. 20530, (202) 305-2738.

For Defendant Pershing, Yoakley & Associates, P.C.:
John J. Miles,
E. John Steren,
Ober, Kaler, Grimes & Shriver, 1401 H Street, N.W., 5th Floor, 
Washington, D.C. 20005-2110.

Final Judgment

    Plaintiff, the United States of America, having filed its Complaint 
on ________________ 1999, and plaintiff and defendant Federation of 
Certified Surgeons and Specialists, Inc., (``FCSSI'') and defendant 
Pershing Yoakley & Associates, P.C. (``PYA''), by their respective 
attorneys, having consented to the entry of this Final Judgment without 
trial or adjudication of any issue of fact or law, and without this 
Final Judgment constituting any evidence against or an admission by any 
party with respect to any issue of fact or law;
    And whereas defendants have agreed to be bound by the provisions of 
this Final Judgment;
    Now, therefore, before the taking of any testimony, and without 
trial or adjudication of any issue of fact or law, and upon consent of 
the plaintiff and defendants, it is hereby ordered, adjudged, and 
decreed:

I. Jurisdiction

    This Court has jurisdiction over the subject matter of and over the 
plaintiff and defendants to this action. The Complaint states a claim 
upon which relief may be granted against defendants under Section 1 of 
the Sherman Act, 15 U.S.C. Sec. 1.

II. Definitions

    As used in this Final Judgment:
    (A) ``Communicate'' means to discuss, disclose, transfer, 
disseminate, or exchange information or opinion, formally or 
informally, in any manner;
    (B) ``Competing physicians'' means two or more physicians in 
separate medical practices in the same county in the same specialty;
    (C) ``Competitively sensitive information'' means
    (1) Any participating physician's actual or possible view, 
intention, or position concerning the negotiation or acceptability of 
any proposed or existing payer contract or contract term, including the 
physician's negotiating or contracting status with any payer or the 
physician's response to a payer contract or contract term; or
    (2) Any proposed or existing term of a payer contract that affects:
    (a) The amount of fees or payment, however determined, that a 
participating physician charges, contracts for, or accepts from or 
considers charging, contracting for, or accepting from any payer for 
providing physician services;
    (b) The duration, amendment, or termination of the payer contract;
    (c) Utilization review; or
    (d) The manner of resolving fee disputes between the participating 
physician and the payer,
    (D) ``FCSSI'' means the Federation of Certified Surgeons and 
Specialists, Inc., located in Tampa, Florida; each of its present and 
former members, shareholders, directors, officers, agents, 
representatives, and employees (all such persons only in such 
capacities with FCSSI or with any successors or assigns of FCSSI); its 
successors and assigns, including any group organized directly or 
indirectly by two or more competing physicians (who serve or have 
served as a director or officer of FCSSI) for the purpose of 
negotiating with payers; and each entity over which it has control;
    (E) ``FCSSI physician'' means all present and former physician 
shareholders and physician members of FCSSI;
    (F) ``Messenger'' means a person that communicates to a payer any 
competitively sensitive information it obtains, individually, from a

[[Page 5834]]

participating physician or communicates, individually, to a 
participating physician any competitively sensitive information it 
obtains from a payer;
    (G) ``Objective information'' or ``objective comparison'' means 
empirical data that are capable of being verified or a comparison of 
such data;
    (H) ``Participating physician'' means a physician who is either in 
solo practice or a group practice, and who participates in a messenger 
arrangement, and any employee of such physician or group practice 
acting on the physician's or group practice's behalf in connection with 
a messenger arrangement.
    (I) ``Payer'' means any person that purchases or pays for all or 
part of a physician's services for itself or any other person and 
includes but is not limited to independent practice associations, 
individuals, health insurance companies, health maintenance 
organizations, preferred provider organizations, and employers;
    (J) ``Payer contract'' means a contract between a payer and a 
physician by which that physician agrees to provide physician services 
to persons designated by the payer;
    (K) ``Person'' means any natural person, corporation, firm, 
company, sole proprietorship, partnership, joint venture, association, 
institute, governmental unit, or other legal entity; and
    (L) ``PYA'' means Pershing Yoakley & Associates, P.C. with offices 
in Clearwater Florida; each of its shareholders, its agents, 
representatives, employees, officers, and directors (in such capacities 
only); its successors and assigns; and each entity it controls.

III. Applicability

    Except where expressly limited to one defendant, this Final 
Judgment applies to:
    (A) FCSSI;
    (B) PYA, when providing, or supervising the provision of, services 
to any competing physicians in Hillsborough, Pinellas, or Pasco County, 
Florida; and
    (C) All other persons who receive actual notice of this Final 
Judgment by personal service or otherwise and then act or participate 
in active concert with any of the above persons.

IV. Injunctive Relief

    (A) FCSSI is enjoined, directly or indirectly, from:
    (1) Participating in, encouraging, or facilitating any agreement or 
understanding between competing physicians about any competitively 
sensitive information;
    (2) Acting as, or facilitating the use of, a messenger or any other 
agent or representative for any FCSSI physician for the purpose of 
negotiating or communicating with any payer on behalf of such FCSSI 
physician;
    (3) Participating in, encouraging, or facilitating any agreement or 
understanding among competing physicians about using a messenger;
    (4) Negotiating with any payer on behalf of any FCSSI physician;
    (5) Communicating or facilitating the communication of any 
competitively sensitive information to, or in the presence of, 
competing physicians; and
    (5) Participating in, encouraging, or facilitating any agreement or 
understanding among any competing physicians that FCSSI physicians will 
deal with a payer only through a messenger or other agent or 
representative.
    (B) PYA is enjoined, directly or indirectly, from:
    (1) Participating in, encouraging, or facilitating any agreement or 
understanding between competing physicians with offices in 
Hillsborough, Pinellas, or Pasco County, Florida, about any 
competitively sensitive information;
    (2) Participating in, encouraging, or facilitating any agreement or 
understanding between competing physicians with offices in 
Hillsborough, Pinellas, or Pasco County, Florida, to deal with any 
payer exclusively through a messenger rather than individually or 
through other channels;
    (3) Negotiating, collectively or individually, on behalf of 
competing physicians with offices in Hillsborough, Pinellas, or Pasco 
County, Florida, any actual or proposed payer contract or contract term 
with any payer;
    (4) Making any recommendation to competing physicians with offices 
in Hillsborough, Pinellas, or Pasco County, Florida, about any actual 
or proposed payer contract or contract term or whether to accept or 
reject any such payer contract or contract term;
    (5) Communicating competitively sensitive information in the 
presence of competing physicians with offices in Hillsborough, 
Pinellas, or Pasco County, Florida;
    (6) Communicating to competing physicians with offices in 
Hillsborough, Pinellas, or Pasco County, Florida, any subjective 
opinion or subjective analysis, evaluation, or assessment about 
competitively sensitive information;
    (7) Precluding or discouraging any competing physicians with 
offices in Hillsborough, Pinellas, or Pasco County, Florida, from 
exercising his, her, or their own independent business judgment in 
determining whether to negotiate, contract, or deal directly with any 
payer;
    (8) Acting as, or using, a messenger on behalf of defendant FCSSI 
or any other group or groups of competing physicians with offices in 
Hillsborough, Pinellas, or Pasco County, Florida if present or former 
members of FCSSI constitute more than twenty percent of any individual 
group's membership or of all groups' total membership; and
    (9) Acting as, or using, a messenger for any competing physicians 
with offices in Hillsborough, Pinellas, or Pasco County, Florida, 
unless:
    (a) At the outset of its involvement with any payer as a messenger 
(or within 30 days of the entry of this Final Judgment for any ongoing 
involvement with a payer), and annually thereafter, it informs the 
payer in writing that, at any time, (i) the payer is free to decline to 
communicate with any participating physician through it, and (ii) any 
participating physician is free to communicate with the payer 
individually without its involvement;
    (b) When first designated by any participating physician as a 
messenger (or within 30 days of the entry of this Final Judgment for 
any ongoing involvement, on behalf of a participating physician, with a 
payer), and annually thereafter, it informs the participating physician 
in writing that he or she is free at any time to communicate with any 
payer individually without its involvement;
    (c) When first designated by any participating physician as a 
messenger and at the outset of its involvement with any payer as a 
messenger (or within 30 days of the entry of this Final Judgment for 
any ongoing involvement, on behalf of a participating physician, with a 
payer), and annually thereafter, it informs the participating physician 
and any payer with whom it communicates as a messenger on behalf of the 
participating physician in writing that it cannot negotiate, 
collectively or individually, for any participating physician any payer 
contract or contract term but can act only as a messenger as permitted 
by this Final Judgment;
    (d) It informs the participating physician of any payer's decision 
not to communicate or to discontinue communicating with any 
participating physician through PYA;
    (e) It communicates all competitively sensitive information that it 
receives from any payer separately to each participating physician 
designated by the payer;

[[Page 5835]]

    (f) It does not communicate any competitively sensitive information 
obtained from any participating physician to anyone other than to 
payers;
    (g) It ensures that (i) any oral communications between it and any 
payer or any participating physician is contemporaneously memorialized 
in writing and shows the date, participants to, and substance of the 
communication, and the person making the record; (ii) such 
memorialization and any written communications between it and any payer 
or participating physician are preserved for two years; (iii) any 
correspondence between it and a participating physician is addressed 
individually to that participating physician only; and (iv) no 
correspondence between it and a payer that includes the competitively 
sensitive information of a participating physician is sent to any other 
competing physician; and
    (h) It does not violate any of the provisions of Section IV (B)(1)-
(8) of this Final Judgment.

V. Notifications

    (A) Within 30 days from the entry of this Final Judgment, FCSSI 
shall notify, in writing, each payer (1) with which FCSSI negotiated 
any contract or currently is attempting to negotiate any contract or 
(2) that FCSSI approaches on behalf of any FCSSI physician, that FCSSI 
will no longer represent any FCSSI physician in any manner relating to 
payer contracts or contract terms.
    (B) Within 30 days from the entry of this Final Judgment, FCSSI 
shall notify, in writing, each payer with which FCSSI has negotiated a 
contract that any contract between FCSSI and the payer may be 
terminated by the payer upon written notice to FCSSI given within 30 
days following FCSSI's written notification.
    (C) After entry of this Final Judgment, FCSSI shall notify each 
payer that inquires about contracting through or with FCSSI that FCSSI 
does not represent any FCSSI physician in any manner relating to payer 
contracts or contract terms.
    (D) FCSSI shall notify plaintiff at least 30 days prior to any 
proposed (1) dissolution of FCSSI, (2) sale or assignment of claims or 
assets of FCSSI resulting in the emergence of a successor corporation, 
or (3) change in corporate structure of FCSSI that may affect 
compliance obligations arising out of Section VII of this Final 
Judgment.

VI. Permitted Conduct

    Notwithstanding any other provision of this Final Judgment, PYA 
may:
    (A) At a participating physician's request, communicate to the 
participating physician accurate, factual, and objective information 
about a proposed payer contract offer or contract terms, including, if 
requested, objective comparisons with terms offered to that 
participating physician by other payers; and
    (B) Engage in activities reasonably necessary to facilitate lawful 
activities by physician network joint ventures and muliprovider 
networks as those terms are used in Statements 8 and 9 of the 1996 
Statements of Antitrust Enforcement Policy in Health Care, 4 Trade Reg. 
Rep. (CCH) para. 13,153.

VII. Compliance Program

    (A) FCSSI shall maintain an antitrust compliance program (unless 
FCSSI dissolves without any successors or assigns) that shall include:
    (1) Distributing, within 60 days from the entry of this Final 
Judgment, a copy of the Final Judgment and Competitive Impact Statement 
to all FCSSI physicians and distributing in a timely manner a copy of 
the Final Judgment and Competitive Impact Statement to any physician 
who subsequently joins FCSSI;
    (2) Obtaining, within 120 days from the entry of this Final 
Judgment, and annually thereafter, and retaining for the duration of 
this Final Judgment, a certificate from each then current FCSSI 
physician that he or she has received, read, understands, and agrees to 
comply with the Final Judgment and understands that he or she may be 
held in civil or criminal contempt for failing to do so.
    (B) PYA shall maintain an antitrust compliance program, which shall 
include:
    (1) Distributing within 60 days from the entry of this Final 
Judgment, a copy of the Final Judgment and Competitive Impact Statement 
to all of its shareholders, agents, representatives, employees, 
officers, and directors (in such capacity only) who provide, or 
supervise the provision of, services to competing physicians;
    (2) Distributing in a timely manner a copy of the Final Judgment 
and Competitive Impact Statement to any person who succeeds to a 
position described in Paragraph VII (B)(1);
    (3) Holding an annual seminar explaining to all of its 
shareholders, agents, representatives, employees, officers, and 
directors (in such capacity only) who provide, or supervise the 
provision of, services to competing physicians, the antitrust 
principles applicable to their work, the restrictions contained in this 
Final Judgment, and the implications of violating the Final Judgment;
    (4) Maintaining an internal mechanism by which questions from any 
of its shareholders, agents, representatives, employees, officers, and 
directors (in such capacity only) about the application of the 
antitrust laws to the presentation of competing physicians, whether as 
a messenger or as some other representative, can be answered by counsel 
as the need arises;
    (5) Obtaining, within 120 days from the entry of this Final 
Judgment, and retaining for the duration of this Final Judgment a 
certificate from each of its shareholders, agents, representatives, 
employees, officers, and directors (in such capacity only) who provide, 
or supervise the provision of, services to competing physicians with 
offices in Hillsborough, Pinellas, or Pasco County, Florida, that he or 
she has received, read, and understands this Final Judgment, and that 
he or she has been advised and understands that he or she must comply 
with the Final Judgment and may be held in civil or criminal contempt 
for failing to do so.
    (C) FCSSI and PYA shall maintain for inspection by plaintiff a 
record of recipients to whom this Final Judgment and Competitive Impact 
Statement have been distributed and from whom annual written 
certifications have been received.

VIII. Certification

    (A) Within 75 days after entry of this Final Judgment, FCSSI and 
PYA shall certify to plaintiff that it has distributed the Final 
Judgment and Competitive Impact Statement as respectively required by 
Paragraph VII (A)(1) and VII (B)(1);
    (B) For a period of ten years following the date of entry of this 
Final Judgment, unless they dissolve without any successors or assigns, 
FCSSI and PYA shall certify annually to plaintiff that they have 
complied with the provisions of this Final Judgment; and
    (C) Within 75 days after entry of this Final Judgment, FCSSI shall 
certify to plaintiff that it has made the notifications required by 
Section V.

IX. Plaintiff's Access

    (A) For the purposes of determining or securing compliance with 
this Final Judgment or determining whether this Final Judgment should 
be modified or terminated, and subject to any legally recognized 
privilege, authorized representatives of the Antitrust Division of the 
United States Department of Justice, shall upon written request of the 
Assistant Attorney General in charge of

[[Page 5836]]

the Antitrust Division and on reasonable notice to FCSSI or PYA, be 
permitted:
    (1) Access during regular business hours to inspect and copy all 
records and documents in the possession, custody, or under the control 
of FCSSI or PYA, which may have counsel present, relating to any 
matters contained in this Final Judgment;
    (2) To interview FCSSI's or PYA's members, shareholders, partners, 
officers, directors, employees, agents, and representatives, who may 
have counsel present, concerning such matters; and
    (3) To obtain written reports from FCSSI or PYA under oath if 
requested, relating to any matters contained in this Final Judgment.
    (B) FCSSI and PYA shall have the right to be represented by counsel 
in any process under this Section.
    (C) No information or documents obtained by the means provided in 
this Section 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 (including grand jury proceedings), or for the 
purpose of securing compliance with this Final Judgment, or as 
otherwise required by law.
    (D) If, at the time information or documents are furnished by 
defendant to plaintiff, defendant represents and identifies, in 
writing, the material in any such information or documents to which a 
claim of protection may be asserted under Rule 26(c)(7) of the Federal 
Rules of Civil Procedure, and defendant will mark each pertinent page 
of such material, ``subject to claim of protection under Rule 26(c)(7) 
of the Federal Rules of Civil Procedure,'' then 10-days notice shall be 
given by plaintiff to defendant prior to divulging such material in any 
legal proceeding (other than a grand jury proceeding) to which 
defendant is not a party.

X. Jurisdiction Retained

    This Court retains jurisdiction to enable any party to this Final 
Judgment, but no other person, to apply to this Court at any time for 
further orders and directions as may be necessary or appropriate to 
carry out or construe this Final Judgment, to modify or terminate any 
of its provisions, to enforce compliance, and to punish violations of 
its provisions.

XI. Expiration of Final Judgment

    This Final Judgment shall expire ten (10) years from the date of 
entry.

XII. Public Interest Determination

    Entry of this Final Judgment is in the public interest.

    Court approval subject to procedures of the Antitrust Procedures 
and Penalties Act, 15 U.S.C. 16.

----------------------------------------------------------------------
United States District Judge

Competitive Impact Statement

    Pursuant to Section 2(b) of the Antitrust Procedures and Penalties 
Act, 15 U.S.C. Sec. 16(b) (``APPA''), the United States files this 
Competitive Impact Statement relating to the proposed Final Judgment 
submitted for entry in this civil antitrust proceeding.

I. Nature and Purpose of the Proceeding

    On ________________, the United States filed a civil antitrust 
Complaint alleging that defendants, the Federation of Certified 
Surgeons and Specialists, Inc. (``FCSSI'') and Pershing Yoakley & 
Associates, P.C. (``PYA''), participated in an agreement to negotiate 
jointly with managed care plans (``MCPs'') to obtain higher fees for 
FSSI's otherwise competing general and vascular surgeons in violation 
of Section 1 of the Sherman Act, 15 U.S.C. 1. The Complaint seeks 
injunctive relief to enjoin continuance or resumption of the violation.
    The United States filed with the Complaint a proposed Final 
Judgment intended to resolve this matter. The Court's 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 
Final Judgment, or to punish violations of any of its provisions.
    Plaintiff and defendants have stipulated that the Court may enter 
the proposed Final Judgment after compliance with the APPA unless, 
prior to entry, plaintiff withdraws its consent. In the Stipulations to 
the proposed Final Judgment, defendants have agreed to be bound by the 
provisions of the proposed Final Judgment pending its entry by the 
Court. The proposed Final Judgment provides that its entry does not 
constitute any evidence against, or admission by, any party concerning 
any issue of fact of law. The present proceeding is designed to ensure 
full compliance with the public notice and other requirements of the 
APPA.

II. Practices Giving Rise to the Alleged Violations

A. Defendants
    Defendant FCSSI is a Florida corporation with its principal place 
of business in Tampa, Florida. FCSSI comprises 29 competing general and 
vascular surgeons in Tampa and is controlled by its member surgeons. In 
1997, FCSSI's surgeons performed 87% of all general and vascular 
surgeries, and constituted over 83% of all general and vascular 
surgeons having operating privileges, at five of the seven hospitals in 
Tampa that provide general and vascular surgery services.
    Defendant PYA, an accounting and consulting firm, is a Tennessee 
professional corporation with its principal place of business in 
Knoxville, Tennessee and with additional offices in Chattanooga and 
Nashville, Tennessee; Atlanta, Georgia; Washington, D.C.; and 
Clearwater, Florida
B. Defendants' Unlawful Activities
    In May, 1997, FCSSI was formed to negotiate jointly on behalf of 
its member physicians with MCPs and to use their collective strength to 
improve ``overall managed care reimbursement'' to FCSSI surgeons, 
including ``[o]btaining contract terms more favorable than if each 
physician contracted separately.'' FCSSI retained PYA to coordinate 
FCSSI surgeons' MCP contracting activities. For these services, each 
FCSSI surgeon paid PYA $75 per month as a retainer and a set amount per 
MCP contract negotiated by PYA, providing for higher payments to PYA 
for higher contractual fee levels.
    In July, 1997, PYA contacted United HealthCare (``United'') and 
made clear to United that it was representing FCSSI surgeons ``as a 
group.'' United made an offer to FCSSI surgeons through PYA. PYA 
recommended to FCSSI's board that it not accept United's contract offer 
and either make a counter offer or ``have all members terminate their 
[United contracts].'' FCSSI's board instructed PYA to make a 
counteroffer to United. PYA then informed United that unless United 
agreed to its demands, it would recommend that FCSSI surgeons terminate 
their United contracts. United agreed to PYA's contract demands, and 
FCSSI's board voted to accepted the revised contract. The jointly 
negotiated contracts paid FCSSI surgeons 30% more than United's first 
offer and represented an average annual increase in revenue of $5,013 
for each FCSSI physician.
    In September, 1997, PYA attempted to renegotiate FCSSI surgeons' 
existing contracts with Aetna US Healthcare (``Aetna''). PYA advised 
Aetna that if Aetna met PYA's proposed financial and contractual terms, 
PYA would recommend that FCSSI surgeons accept the Aetna contract. 
Aetna subsequently offered FCSSI surgeons a contract that

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PYA viewed as ``no improvement'' and without ``concessions.'' PYA 
recommended that all FCSSI surgeons notify Aetna of their intent to 
terminate their contracts in order to allow PYA to negotiate higher 
fees. FCSSI's board of directors voted to accept PYA's recommendation 
and, on September 26, 1997, PYA notified each FCSSI surgeon of the 
board's decision and directed the surgeon to write a termination letter 
to Aetna. Twenty-eight of the twenty-nine FCSSI surgeons terminated 
their Aetna contracts. As a result of this group boycott, Aetna 
proposed increased payment levels for FCSSI surgeons.
    By December 8, 1997, PYA had contacted four other MCPs on behalf of 
FCSSI surgeons. Upon learning of the Department of Justice's 
investigation of FCSSI's activities in December, 1997, however, FCSSI 
and PYA ceased negotiating contracts with those MCPs. Without the 
proposed relief, these negotiations would likely resume.
    By contracting on behalf of all of its member surgeons or none at 
all, FCSSI forced some MCPs to pay FCSSI surgeons substantially higher 
fees and to contract with a greater number of general and vascular 
surgeons than the MCP had previously contracted with to service its 
members. According to the President of FCSSI, FCSSI's joint negotiating 
efforts ``produced extraordinary results,'' amounting to an increase in 
revenues of $14,097 on average for each FCSSI surgeon. As a result of 
FCSSI's and PYA's concerted actions, MCPs, employees, and individual 
consumers faced significantly higher healthcare costs and were deprived 
of the benefits of free and open competition among Tampa general and 
vascular surgeons in the purchase of their services.
C. FCSSI's and PYA's Improper Use of the ``Messenger Model''
    While engaging in the unlawful conduct outlined above, FCSSI and 
PYA representatives attempted to cloak their illegal activities as 
those of a legitimate ``third-party messenger,'' which are described in 
the Department of Justice and Federal Trade Commission Statements of 
Antitrust Enforcement Policy in Healthcare, 4 Trade Reg. Rep. (CCH) 
para.13,153 at 20,831 (August 28, 1996). However, defendant's illegal 
conduct is inconsonant with that of a legitimate messenger model. A 
legitimate messenger does not coordinate or engage in collective 
pricing activity for competing independent physicians, enhance their 
bargaining power, or facilitate the sharing of price and other 
competitively sensitive information among them.

III. Explanation of the Proposed Final Judgment

    The proposed Final Judgment is intended to prevent FCSSI and PYA 
from restraining competition in the future among general and vascular 
surgeons in Tampa.
A. Scope of the Proposed Final Judgment
    Section III of the proposed Final Judgment provides that the Final 
Judgment shall apply to FCSSI, including its member physicians; to PYA, 
when providing, or supervising the provision of, services to any 
competing physicians in Hillsborough, Pinellas, or Pasco County, 
Florida; and to all other persons who receive actual notice of the 
proposed Final Judgment by personal service or otherwise and then act 
or participate in active concert with any of the above persons.
B. Prohibitions and Obligations
    Section IV of the proposed Final Judgment sets forth the 
substantive injunctive provisions. Section IV(A) is designed to prevent 
FCSSI from collectively negotiating or acting as a messenger or agent 
with any payer on behalf of any FCSSI or other competing physicians or 
in any way enhancing their bargaining power.\1\ Thus, Sections IV(A)(1) 
and (5) prohibit FCSSI from facilitating an agreement between competing 
physicians about ``competitively sensitive information'' (as that term 
is defined in the Final Judgment) or communicating or facilitating the 
communication of ``competitively sensitive information'' to, or in the 
presence of, competing physicians. Sections IV(A)(2) and (3) prohibit 
FCSSI from acting as or using a messenger or agent to represent FCSSI 
surgeons in negotiations or communications with payers or from 
facilitating an agreement among competing physicians about the use of a 
messenger or about dealing only through a messenger. In addition, 
Section IV(A)(4) enjoins FCSSI from negotiating with any payer on 
behalf of any FCSSI physicians. Finally, Section IV(A)(6) prohibits 
FCSSI from facilitating any agreement among competing physicians that 
FCSSI will deal with a payer only through a particular agent.
---------------------------------------------------------------------------

    \1\ Section II(F) defines a messenger to mean a person that 
communicates to a payer any competitively sensitive information it 
obtains, individually, from a participating physician or 
communicates, individually, to a participating physician any 
competitively sensitive information it obtains from a payer.
---------------------------------------------------------------------------

    Section IV(B) is designed to ensure that PYA does not engage in 
joint negotiations on behalf of competing physicians in the three 
counties around Tampa, Hillsborough, Pinellas, or Pasco Counties (the 
``Tampa area''), where PYA has been active in seeking physician 
clients, and does not act as a messenger or agent for more than twenty 
percent of FCSSI's surgeons. Accordingly, Sections IV(B)(1) and (2) 
prohibit PYA from facilitating any agreement between competing 
physicians in the Tampa area about any competitively sensitive 
information or exclusively using a messenger. Sections IV(B)(3) and (4) 
prohibit PYA, in the Tampa area, from negotiating payer contracts on 
behalf of competing physicians and from making any recommendations to 
competing physicians about any payer contract or contract term. 
Moreover, pursuant to Sections IV(B)(5)-(7), PYA may not communicate 
competitively sensitive information in the presence of competing 
physicians in the Tampa area or communicate to competing Tampa area 
physicians any subjective opinion or analysis about competitively 
sensitive information or discourage any competing physician in the 
Tampa area from exercising his or her own business judgment in 
determining whether to negotiate, contract, or deal directly with any 
payer.
    Section IV(B)(8) enjoins PYA from acting as or using a messenger on 
behalf of FCSSI or any group of competing physicians in the Tampa area 
if past or present members of FCSSI constitute more than twenty percent 
of any individual group's membership or all groups' total membership. 
Further, PYA may act as a messenger only if it complies with the 
provisions of Section IV(B)(9). Pursuant to Sections IV(B)(9)(a)-(c), 
PYA must (a) notify all payers with which it communicates as a 
messenger that the payer may communicate directly with the physicians; 
(b) inform all physicians for whom it acts as a messenger that he or 
she may communicate with any payer (without PYA) at any time; and (c) 
inform each physician and payer involved that it cannot negotiate 
collectively or individually for any physician who uses PYA as a 
messenger. Section IV(B)(9)(d) requires PYA to inform physicians of a 
payer's decision not to communicate through PYA. Under Sections 
IV(B)(9)(e) and (f), PYA must communicate all competitively sensitive 
information from a payer separately to each individual physician, and 
if a physician discloses competitively sensitive information to PYA, 
then PYA may disclose that information to payers only.

[[Page 5838]]

Finally, Section IV(B)(9)(g) requires PYA to memorialize in writing all 
oral communications between it and any payer and physician, preserve 
such records for two years, address all physician correspondence 
individually, and not send any correspondence that contains a 
physician's competitively sensitive information to any other physician.
    Sections V(A)-(C) require FCSSI to notify each payer with which 
FCSSI negotiated or is negotiating a contract, that FCSSI approached on 
behalf of any FCSSI physician, or that inquires about contracting 
through FCSSI, that FCSSI will no longer represent any FCSSI physician 
in any manner relating to MCP contracts or contract terms. FCSSI shall 
also notify, in writing, each MCP with which FCSSI has negotiated a 
contract that any contract between FCSSI and that MCP may be terminated 
by the MCP upon written notice to FCSSI. Section V(D) obligates FCSSI 
to notify plaintiff at least 30 days before any dissolution of FCSSI, 
sale or assignment of its claims or assets, or change in corporate 
structure that may affect its compliance obligations under the proposed 
Final Judgment.
    Section VI makes clear that PYA may, at a physician's request, 
communicate to the physician accurate, factual, and objective 
information about a proposed payer contract offer or terms and engage 
in activities reasonably necessary to facilitate lawful activities by 
physician network joint ventures and multiprovider networks.
    Section VII of the Final Judgment sets forth various compliance 
measures. Sections VII(A) (1) and (2) and (C) require FCSSI to 
distribute a copy of the Final Judgment and Competitive Impact 
Statement to all current and future FCSSI physicians and to obtain and 
maintain records of written certifications that they have read, will 
abide by, and understand the consequences of their failure to comply 
with the terms of the Final Judgment.
    Sections VII(B)(1), (2), and (5) and (C) requires PYA to distribute 
a copy of the Final Judgment and Competitive Impact Statement to all of 
its shareholders, agents, representatives, employees, officers, and 
directors who provide, or supervise the provision of, services to 
competing physicians, and to any of their successors, and to obtain and 
maintain records of written certifications that they have read, will 
abide by, and understand the consequences of their failure to comply 
with the terms of the Final Judgment.
    Section VII(B)(3) requires PYA to hold an annual seminar for all of 
its shareholders, agents, representatives, employees, officers, and 
directors who provide, or supervise the provision of, services to 
competing physicians, explaining the antitrust principles applicable to 
their work, the Final Judgment's restrictions, and the implications of 
violating the Final Judgment. Section VII(B)(4) ensures that PYA 
maintains an internal mechanism of addressing questions from its 
personnel regarding the application of antitrust laws to the 
representation of competing physicians.
    Section VII obligates FCSSI and PYA to certify that they have 
distributed the Final Judgment and Competitive Impact Statement as 
required by the Judgment and annually to certify their compliance with 
the Judgment's provisions. FCSSI is also required to certify that it 
has made the notifications required by Section V of the Judgment.
    Finally, Section IX sets forth a series of measures by which 
Plaintiff may have access to information needed to determine or secure 
FCSSI's and PYA's compliance with the Final Judgment or to determine 
whether the Final Judgment should be modified or terminated. Section XI 
limits the term of the Final Judgment to ten years.

IV. Effect of the Proposed Final Judgment on Competition

    The relief in the proposed Final Judgment is designed to remedy the 
violation alleged in the Complaint and prevent its recurrence. The 
Complaint alleges that FCSSI and PYA violated Section 1 of the Sherman 
Act by negotiating with MCPs jointly on behalf of otherwise competing 
FCSSI surgeons to obtain higher fees for their services and by 
boycotting MCPs that did not provide payments for FCSSI surgeons at a 
level substantially higher than those provided in individually 
negotiated contracts.
    The proposed Final Judgment eliminates that restraint on 
competition among general and vascular surgeons in Tampa by enjoining 
(1) FCSSI from acting for FCSSI physicians as a negotiator, messenger, 
or agent or using PYA or any other agent as a negotiator; and (2) PYA 
from acting as a negotiator for FCSSI or any other competing physicians 
in the Tampa area. Moreover, PYA is not permitted to act as a messenger 
for more than twenty percent of FCSSI's physicians or for any competing 
physicians in the Tampa area if it does not comply with certain 
provisions designed to ensure that it does not facilitate any agreement 
between competing physicians about competitively sensitive information 
or in any way enhance their bargaining power.
    The proposed Final Judgment contains provisions adequate to prevent 
further violations of the type upon which the Complaint is based and to 
remedy the effects of the alleged conspiracy. The proposed Final 
Judgment's injunctions should restore the benefits of free and open 
competition among general and vascular surgeons in the sale of their 
services in Tampa.

V. Alternative to the Proposed Final Judgment

    The alternative to the proposed Final Judgment would be a full 
trial on the merits of the case. In the view of the Department of 
Justice, such a trial would involve substantial costs to the United 
States and defendants and is not warranted because the proposed Final 
Judgment provides all of the relief necessary to remedy the violation 
of the Sherman Act alleged in the Complaint.

VI. Remedies Available to Private Litigants

    Section 4 of the Clayton Act, 15 U.S.C. 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 a reasonable attorney's fee. 
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. 16(a), the proposed Final Judgment has no 
prima facie effect in any subsequent lawsuit that may be brought 
against defendants in this matter.

VII. Procedures Available for Modification of the Proposed Final 
Judgment

    As provided by Sections 2 (b) and (d) of the APPA, 15 U.S.C. 16 (b) 
and (d), any person believing that the proposed Final Judgment should 
be modified may submit written comments to Gail Kursh, Chief; Health 
Care Task Force; United States Department of Justice; Antitrust 
Division; 325 Seventh Street, N.W.; Room 400; Washington, D.C. 20530, 
within the 60-day period provided by the Act. All 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 with each defendant, 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

[[Page 5839]]

Final Judgment is necessary to protect the public interest. Moreover, 
Section X of the proposed Final Judgment 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 proposed Final 
Judgment.

VIII. Determinative Documents

    No materials and documents of the type described in Section 2(b) of 
the APPA, 15 U.S.C. Sec. 16(b), were considered in formulating the 
proposed Final Judgment. Consequently, none are filed herewith.

    Dated: January 26, 1999.

        Respectfully submitted,
Denise E. Biehn,
Edward D. Eliasberg, Jr.,
Steven Kramer,
Attorneys, Antitrust Division, U.S. Dept. of Justice, 325 Seventh 
Street, N.W., Room 409, Washington, D.C. 20530, Tel: (202) 307-0808, 
Facsimile: (202) 514-1517.

[FR Doc. 99-2714 Filed 2-4-99; 8:45 am]
BILLING CODE 4401-11-M