[Federal Register Volume 72, Number 151 (Tuesday, August 7, 2007)]
[Notices]
[Pages 44144-44146]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-15356]


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FEDERAL TRADE COMMISSION

[File No. 051 0044]


Colegio de Optometras de Puerto Rico and Edgar D[aacute]vila 
Garc[iacute]a, O.D., and Carlos Rivera Alonso, O.D.; Analysis of 
Agreement Containing Consent Order to Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or deceptive acts or 
practices or unfair methods of competition. The attached Analysis to 
Aid Public Comment describes both the allegations in the draft 
complaint and the terms of the consent order--embodied in the consent 
agreement--that would settle these allegations.

DATES: Comments must be received on or before August 28, 2007.

ADDRESSES: Interested parties are invited to submit written comments. 
Comments should refer to ``Colegio de Optometras, File No. 051 0044,'' 
to facilitate the organization of comments. A comment filed in paper 
form should include this reference both in the text and on the 
envelope, and should be mailed or delivered to the following address: 
Federal Trade Commission/Office of the Secretary, Room 135-H, 600 
Pennsylvania Avenue, NW., Washington, DC 20580. Comments containing 
confidential material must be filed in paper form, must be clearly 
labeled ``Confidential,'' and must comply with Commission Rule 4.9(c). 
16 CFR 4.9(c) (2005).\1\ The FTC is requesting that any comment filed 
in paper form be sent by courier or overnight service, if possible, 
because U.S. postal mail in the Washington area and at the Commission 
is subject to delay due to heightened security precautions. Comments 
that do not contain any nonpublic information may instead be filed in 
electronic form as part of or as an attachment to email messages 
directed to the following email box: [email protected].
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    \1\ The comment must be accompanied by an explicit request for 
confidential treatment, including the factual and legal basis for 
the request, and must identify the specific portions of the comment 
to be withheld from the public record. The request will be granted 
or denied by the Commission's General Counsel, consistent with 
applicable law and the public interest. See Commission Rule 4.9(c), 
16 CFR 4.9(c).
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    The FTC Act and other laws the Commission administers permit the 
collection of public comments to consider and use in this proceeding as 
appropriate. All timely and responsive public comments, whether filed 
in paper or electronic form, will be considered by the Commission, and 
will be available to the public on the FTC website, to the extent 
practicable, at www.ftc.gov. As a matter of discretion, the FTC makes 
every effort to remove home contact information for individuals from 
the public comments it receives before placing those comments on the 
FTC website. More information, including routine uses permitted by the 
Privacy Act, may be found in the FTC's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

FOR FURTHER INFORMATION CONTACT: Susan E. Raitt, FTC Northeast Region, 
600 Pennsylvania Avenue, NW., Washington, DC 20580, (212) 607-2829.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and Sec.  2.34 of 
the Commission Rules of Practice, 16 CFR 2.34, notice is hereby given 
that the above-captioned consent agreement containing a consent order 
to cease and desist, having been filed with and accepted, subject to 
final approval, by the Commission, has been placed on the public record 
for a period of thirty (30) days. The following Analysis to Aid Public 
Comment describes the terms of the consent agreement, and the 
allegations in the complaint. An electronic copy of the full text of 
the consent agreement package can be obtained from the FTC Home Page 
(for July 30, 2007), on the World Wide Web, at http://www.ftc.gov/os/2007/07/index.htm. A paper copy can be obtained from the FTC Public 
Reference Room, Room 130-H, 600 Pennsylvania Avenue, NW., Washington, 
DC 20580, either in person or by calling (202) 326-2222.
    Public comments are invited, and may be filed with the Commission 
in either paper or electronic form. All comments should be filed as 
prescribed in the ADDRESSES section above, and must be received on or 
before the date specified in the DATES section.

Analysis of Agreement Containing Consent Order to Aid Public Comment

    The Federal Trade Commission has accepted, subject to final 
approval, an agreement containing a proposed

[[Page 44145]]

consent order with the Colegio de Optometras de Puerto Rico (``the 
Colegio'') and two of its officers, Edgar D[aacute]vila Garc[iacute]a, 
O.D., and Carlos Rivera Alonso, O.D. The agreement settles charges that 
the Colegio, acting as a combination of otherwise competing 
optometrists, and in combination with individual optometrists, 
including Drs. D[aacute]vila and Rivera, violated Section 5 of the 
Federal Trade Commission Act, 15 U.S.C. Sec.  45, by facilitating, 
negotiating, entering into, and implementing express or implied 
agreements on price and other competitively significant terms; 
negotiating fees and other competitively significant terms in vision 
and health plan contracts on behalf of the Colegio's members; and 
refusing or threatening to refuse to deal with such entities except on 
collectively agreed-upon terms. Comments received during this period 
will become part of the public record. After 30 days, the Commission 
will review the agreement and the comments received, and will decide 
whether it should make the proposed order final.
    The purpose of this analysis is to facilitate public comment on the 
proposed order. The analysis is not intended to constitute an official 
interpretation of the agreement and proposed order, or to modify its 
terms in any way. Further, the proposed consent order has been entered 
into for settlement purposes only and does not constitute an admission 
by the Colegio or Drs. D[aacute]vila and Rivera that any of them 
violated the law or that the facts alleged in the complaint (other than 
jurisdictional facts) are true.

The Complaint

    The allegations of the complaint are summarized below.
    The Colegio is a not-for-profit, incorporated professional 
association of optometrists that is organized, existing, and doing 
business under and by virtue of the laws of the Commonwealth of Puerto 
Rico (``Puerto Rico''), with its office and principal place of business 
in San Juan, Puerto Rico.
    The Colegio has approximately 500 member optometrists, constituting 
all of the optometrists licensed to practice in Puerto Rico. Except to 
the extent that competition has been restrained, the member 
optometrists of Colegio have been, and are now, in competition with 
each other for the provision of optometry services in Puerto Rico.
    Dr. D[aacute]vila is a licensed optometrist who provides vision 
care services to patients for a fee. Dr. D[aacute]vila served as the 
Treasurer of the Colegio from 2002 through 2004; he also served as the 
President of the Colegio's Health Plans Commission from 2001 through 
2004. Dr. Rivera is a licensed optometrist who provides vision care 
services to patients for a fee. Dr. Rivera served as President-Elect of 
the Colegio in 2004, and then as President from October 2004 through 
September 2006.
    Since 1997, Ivision International Inc. (``Ivision'') has offered 
vision care services and products in Puerto Rico. Ivision contracts 
with Puerto Rico health plans to administer vision plans and provide 
vision care services and products to covered patients. The health plans 
pay Ivision on a capitated basis, per individual member. Ivision then 
contracts with Puerto Rico optometrists to provide these services. By 
August of 2004, Ivision had almost 130 optometrists--located all over 
Puerto Rico--in its network, making it very attractive to health plans.
    In June and July 2004, Ivision sent out announcements to 
optometrists regarding contracts with several new health plans (many of 
which previously had contracted only directly with optometrists). 
Ivision scheduled meetings with optometrists to be held that August to 
discuss the mechanics of implementing these new contracts. Under these 
new contracts, Ivision paid optometrists the same fees as in its 
contracts with other health plans. As a result of these new contracts, 
the optometrists would lose much if not all of their more lucrative 
direct business with these plans.
    In early August, Ivision began receiving calls from optometrists, 
some of whom were Colegio representatives, complaining about the 
reimbursement structure and rates for the new health plan contracts, 
and threatening that if Ivision did not pay more, it would lose 
optometrists. In addition, as part of a collective effort to force 
Ivision to raise its rates, Colegio representatives and other 
optometrists contacted additional optometrists and urged them to stop 
participating in Ivision's network.
    On August 22, Ivision met with its providers. Just prior to that 
meeting, the optometrists held their own meeting at which a chart 
comparing Ivision's rates with those of other health plans had been 
distributed. During their meeting with Ivision, the optometrists 
demanded that Ivision pay them higher reimbursement rates, in the form 
of one fee for an examination and another fee for refraction, instead 
of paying a flat fee for both services. Dr. Rivera, who was an Ivision 
provider, stated that he was the President-Elect of the Colegio and 
that he knew or was familiar with all the optometrists in Puerto Rico. 
He indicated that as President-Elect of the Colegio he had the 
authority to meet with Ivision and discuss rates on behalf of the 
Colegio's members. Dr. Rivera also indicated that if Ivision did not 
raise reimbursement rates, the Colegio would make sure that Ivision had 
no providers left in Puerto Rico. In response to Ivision's assertion 
that it could enlist other providers, Dr. Rivera maintained that he 
could get to those providers who had not yet joined Ivision and that 
Ivision would not have any optometrists in its network.
    The next day, Dr. D[aacute]vila circulated a letter on Colegio 
letterhead addressed to all of the members of the Colegio concerning 
Ivision's new health plan contracts. Dr. D[aacute]vila, who was not an 
Ivision provider, wrote this letter in his capacity as President of the 
Colegio's Health Plans Commission. In the letter, he urged optometrists 
not to participate in the Ivision network, and informed the Colegio 
members that the Colegio was going to develop a policy to be followed 
with respect to the Ivision plan. He concluded the letter by stating 
that to continue onward, all of the providers were needed, and that 
this was not a battle the Colegio could confront alone.
    Two days later, a Colegio advisor and a former Colegio officer met 
with Ivision representatives and told them that Ivision was going to 
lose all of its providers and that if it did not pay the providers what 
they deserved, they would quit. At a later meeting, the same former 
Colegio officer told Ivision's President that the providers were really 
angry and wanted to destroy Ivision. The President also was told that 
if Ivision agreed to pay a certain amount (matching another plan's 
fee), the providers would forget Ivision's other problems and 
``everything would go away.''
    In September 2004, there were a number of meetings held by the 
Colegio Board of Directors and by Colegio members discussing how to 
deal with Ivision. At one meeting, the Colegio members present were 
advised to resign immediately from Ivision network to force Ivision to 
increase its reimbursement rates. At another meeting, attended by 
several Colegio members, Dr. Rivera asked for a show of hands as to who 
was going to remain in the Ivision network. No optometrist raised a 
hand. Several optometrists voiced complaints about Ivision's 
reimbursement rates and discussed leaving Ivision; an offer was made to 
circulate a sample letter terminating the Ivision contract. A former 
Colegio officer who announced his resignation from Ivision at that 
meeting followed this up a few days later by sending letters to certain 
health plans, stating that because of Ivision's reimbursement structure 
and rates, the optometrists had

[[Page 44146]]

decided to resign en masse from Ivision, which would cause a great 
uproar among the plans' subscribers.
    In early October 2004, some Colegio representatives, including Dr. 
D[aacute]vila and Dr. Rivera, met with officials from some of the 
health plans with which Ivision contracted. The Colegio representatives 
requested that the health plans pay optometrists higher fees. They also 
asked the health plan officials to put pressure on Ivision, and 
informed them that providers were not going to remain in the Ivision 
network if the reimbursement rates did not increase.
    The Colegio's and Drs. D[aacute]vila's and Rivera's efforts to 
obtain higher reimbursement rates from Ivision succeeded. By mid-
October, almost 40 Colegio members had left the Ivision network. These 
optometrists either quit outright by notifying Ivision that they were 
cancelling their optometrist agreements (some in similarly-worded 
letters), or by simply refusing service to those patients enrolled in 
Ivision plans, so that Ivision was forced to terminate these doctors as 
optometrists. In order to maintain an effective network, retain its 
remaining optometrists and recruit new optometrists in the face of the 
Colegio's efforts and success in organizing a boycott, Ivision was 
forced to substantially raise its reimbursement rates. In November 
2004, Ivision significantly increased its reimbursement rate for an eye 
examination and the dispensing of eye glasses; it made a similar 
increase for an examination and the dispensing of contact lenses. 
Ivision was also forced to waive monetary amounts that some 
optometrists owed it.
    In addition to the conduct outlined above, the Colegio and Drs. 
D[aacute]vila and Rivera orchestrated collective negotiations with at 
least two other plans. Their efforts included several meetings with and 
letters to a certain health plan, all directed at having that plan 
amend its contracts with optometrists so that the optometrists could 
provide additional higher paying services for the plan. Indeed, to 
increase its negotiating leverage with this plan, Dr. D[aacute]vila 
sent a letter to all Colegio members urging them not to join the plan 
until these issues were resolved to the Colegio's satisfaction. 
Further, officers of the Colegio on several occasions approached 
another health plan and attempted to negotiate higher reimbursement 
levels for its members who service that plan. Thus far, these two 
health plans have been able to resist the collective action exerted by 
the Colegio.
    Respondents' price fixing and concerted refusal to deal, and the 
agreements, acts, and practices described above, have not been, and are 
not, reasonably related to any efficiency-enhancing integration among 
the optometrist members of the Colegio. By the acts set forth in the 
Complaint, the Colegio and Drs. D[aacute]vila and Rivera violated 
Section 5 of the FTC Act.

The Proposed Consent Order

    The proposed consent order is designed to prevent a recurrence of 
the illegal concerted actions alleged in the complaint, while allowing 
the Colegio and its members, including Drs. D[aacute]vila and Rivera, 
to engage in legitimate joint conduct. The proposed order is similar to 
recent consent orders that the Commission has issued to settle charges 
that physician groups engaged in unlawful agreements refusing to deal 
with health plans.\2\
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    \2\ New Century Health Quality Alliance, Inc., File No. 051-0137 
(Oct. 6, 2006); Puerto Rico Association of Endodontists, Corp., File 
No 051-0170 (Aug. 29, 2006).
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    The proposed order's specific provisions are as follows:
    Paragraph II.A prohibits the Colegio, Dr. D[aacute]vila, and Dr. 
Rivera, from entering into or facilitating agreements among any 
optometrists with respect to their provision of optometry services, 
including: (1) Negotiating on behalf of any optometrist with any payor; 
(2) dealing, refusing to deal, or threatening to refuse to deal with 
any payor; (3) regarding any term upon which any optometrist deals, or 
is willing to deal, with any payor, including, but not limited to, 
price terms; or (4) not to deal individually with any payor, or not to 
deal with any payor other than through the Colegio.
    Other parts of Paragraph II reinforce these general prohibitions. 
Paragraph II.B prohibits the Colegio, Dr. D[aacute]vila, and Dr. Rivera 
from exchanging or facilitating the transfer of information among 
optometrists concerning any optometrist's willingness to deal with a 
payor, or the terms or conditions, including any price terms, on which 
the optometrist is willing to deal. Paragraph II.C prohibits the 
Colegio, Dr. D[aacute]vila, and Dr. Rivera from attempting to engage in 
any action prohibited by Paragraphs II.A or II.B. Paragraph II.D 
prohibits the Colegio from encouraging, pressuring, or attempting to 
induce any person to engage in any action that would be prohibited by 
Paragraphs II.A through II.C.
    Paragraph III requires that the Colegio, Dr. D[aacute]vila, and Dr. 
Rivera for three years from the date the Order becomes final, notify 
the Secretary of the Commission in writing at least sixty days prior 
to: (1) participating in, organizing, or facilitating any discussion or 
understanding with or among any optometrists in any qualified joint 
arrangement relating to price or other terms or conditions of dealing 
with any payor; or (2) contacting a payor to negotiate or enter into 
any agreement concerning price or other terms or conditions of dealing 
with any payor, on behalf of any optometrists or any optometrist group 
practice in such arrangement. The remaining provisions of Paragraph III 
contain other standard notification and compliance-related provisions.
    Paragraph IV requires the Colegio to translate the Order and the 
Complaint into Spanish, distribute the translated Order and Complaint 
to Colegio members, as well as payors, and annually publish these 
documents in official annual reports or newsletters.
    The proposed order will expire in 20 years.
    By direction of the Commission.

Donald S. Clark
Secretary
[FR Doc. E7-15356 Filed 8-6-07: 8:45 am]
BILLING CODE 6750-01-S