[Federal Register Volume 73, Number 51 (Friday, March 14, 2008)]
[Notices]
[Pages 13896-13898]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-5089]


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FEDERAL TRADE COMMISSION

[File No. 071 0074]


Connecticut Chiropractic Association, the Connecticut 
Chiropractic Council, and Robert L. Hirtle, Esq.; 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 April 4, 2008

ADDRESSES: Interested parties are invited to submit written comments. 
Comments should refer to ``Connecticut Chiropractic, File No. 071 
0074,'' 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, N.W., Washington, D.C. 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 by following the instructions on the web-based form at 
http://secure.commentworks.com/ftc-ConnecticutChiropractic. To ensure 
that the Commission considers an electronic comment, you must file it 
on that web-based form.
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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: Robert S. Canterman, FTC Bureau of 
Competition, 600 Pennsylvania Avenue, NW, Washington, D.C. 20580, (202) 
326-2701.

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

[[Page 13897]]

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 March 5, 2008), on the 
World Wide Web, at http://www.ftc.gov/os/2008/03/index.htm. A paper 
copy can be obtained from the FTC Public Reference Room, Room 130-H, 
600 Pennsylvania Avenue, NW, Washington, D.C. 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 consent order with the 
Connecticut Chiropractic Association (``CCA''), the Connecticut 
Chiropractic Council (``CCC''), and CCA's former legal counsel, Robert 
L. Hirtle, Esq. The agreement settles charges by the Federal Trade 
Commission that CCA, CCC, and Mr. Hirtle violated Section 5 of the 
Federal Trade Commission Act, 15 U.S.C. Sec.  45, by orchestrating and 
implementing agreements among competing chiropractors in Connecticut to 
boycott American Specialty Health (``ASH'') to preclude ASH from 
administering chiropractic services in Connecticut. This conduct is a 
naked boycott among competitors and a clear per se violation of the 
antitrust laws.
    The Commission explored the possibility of seeking disgorgement in 
this case, given the egregious nature of the conduct. It ultimately 
concluded that disgorgement was inappropriate under the specific 
factual circumstances of this case. However, the Commission reserves 
the right to seek disgorgement in similar cases in the future.
    The proposed consent order has been placed on the public record for 
30 days to receive comments from interested persons. 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 withdraw from the agreement 
or 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 their 
terms in any way. Further, the proposed order has been entered into for 
settlement purposes only and does not constitute an admission by any 
proposed respondent that said respondent 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.
    CCA is a voluntary trade association whose membership consists of 
approximately 375 chiropractors licensed to practice chiropractic in 
Connecticut. Mr. Hirtle was legal counsel for CCA at all times relevant 
to the conduct alleged in the complaint. CCC is a voluntary trade 
association whose membership consists of approximately 150 
chiropractors licensed to practice chiropractic in Connecticut. Both 
CCA and CCC are organized for the purpose, among others, of serving the 
interests of their respective members, and operate in substantial part 
for the pecuniary benefit of their respective members.
    ASH is a health care benefits organization that offers a 
chiropractic cost-savings benefits administration program to payors 
nationwide to improve the efficiency, increase the quality, and reduce 
the cost of providing chiropractic care. Under the program, ASH 
provides a network of chiropractors and administers chiropractic 
benefits, including utilization management, credentialing, and claims 
processing.
    CCA acted in conspiracy with its members, CCC acted in conspiracy 
with its members, and CCA, CCC, and their members acted in conspiracy 
with each other. Through their joint agreements, CCA, CCC, and their 
respective members, restrained competition by, among other things, 
collectively agreeing to boycott ASH. Mr. Hirtle acted to restrain 
competition by, among other things, encouraging and facilitating the 
boycotts. The purpose and effect of the boycotts were to prevent ASH 
from providing its cost-savings chiropractic benefits administration 
program to Anthem Blue Cross and Blue Shield of Connecticut 
(``Anthem''), CIGNA HealthCare (``CIGNA''), Empire Blue Cross Blue 
Shield (``Empire''), and other payors.
    ASH entered into an arrangement with Anthem in early 2006 to 
provide a chiropractic provider network and administer chiropractic 
benefits for Anthem enrollees. In July 2006, ASH notified CCA and CCC 
chiropractors that the arrangement was effective November 1, 2006. The 
chiropractors who already were members of ASH's network in Connecticut 
had the opportunity to ``opt out'' of the ASH network for Anthem.
    CCA, CCC, and Mr. Hirtle organized monthly meetings starting in 
August 2006 for all licensed chiropractors in Connecticut to discuss 
their concerns with the ASH/Anthem arrangement. During these meetings 
and through other communications, CCA and CCC chiropractors discussed 
with each other their dissatisfaction with ASH's price terms and 
utilization management requirements for chiropractic services. The 
chiropractors incited each other to unite in their fight to defeat the 
ASH/Anthem program. They agreed to ``band together'' to defeat the ASH/
Anthem arrangement.
    CCA and CCC also distributed a model opt-out letter to the 
chiropractors to notify ASH that the chiropractors elected not to 
participate in the ASH/Anthem program. The chiropractors sent opt-out 
letters to ASH using the model letter and provided copies of the 
letters to Mr. Hirtle. Mr. Hirtle regularly circulated written updates 
to the chiropractors informing them of how many chiropractors had opted 
out of the network. Mr. Hirtle encouraged the chiropractors to refuse 
to participate in the ASH/Anthem program through communications telling 
the chiropractors how many more chiropractors needed to opt out to 
``destroy'' the ASH chiropractor network.
    During this time, CCA, CCC, and Mr. Hirtle also encouraged and 
assisted the chiropractors to terminate their existing relationship 
with the ASH chiropractic program for CIGNA and to refuse to 
participate in the ASH program for Empire. The boycotts succeeded in 
their efforts to preclude ASH from administering chiropractic services 
in Connecticut. ASH and Anthem were forced to cancel their arrangement, 
CIGNA had to abandon its program with ASH, and ASH was unable to 
contract with chiropractors in Connecticut for the Empire network.
    The proposed respondents have not identified any reason for the 
agreement among CCA and CCC chiropractors to boycott ASH, and Mr. 
Hirtle's activities to encourage, facilitate, and help implement the 
boycott, other than to prevent ASH from managing

[[Page 13898]]

chiropractic benefits on behalf of payors and their enrollees in 
Connecticut. Neither CCA nor CCC has undertaken any programs or 
activities that create any integration among their members in the 
delivery of chiropractic services. Members do not share any financial 
risk in providing chiropractic services, do not collaborate in a 
program to monitor and modify clinical practice patterns of their 
members to control costs and ensure quality, or otherwise integrate 
their delivery of care to patients. By the acts set forth in the 
complaint, CCA, CCC, and Mr. Hirtle have violated Section 5 of the FTC 
Act.

The Proposed Consent Order

    The proposed order is designed to remedy the illegal conduct 
charged in the complaint and prevent its recurrence. It is similar to 
other consent orders that the Commission has issued to settle charges 
that health care providers engaged in unlawful refusals to deal with 
health plans. Unlike prior consent orders, however, this order also 
settles charges that an attorney participated in the unlawful refusals 
to deal with the providers.
    The proposed order's specific provisions are as follows:
    Paragraph II.A prohibits CCA, CCC, and Mr. Hirtle from entering 
into or facilitating any agreement between or among any chiropractors: 
(1) to negotiate with payors on any chiropractor's behalf; (2) to deal, 
not to deal, or threaten not to deal with payors; or (3) on what terms 
to deal with any payor.
    Other parts of Paragraph II reinforce these general prohibitions. 
Paragraph II.B prohibits the proposed respondents from persuading in 
any way a chiropractor to deal or not deal with a payor, or accept or 
not accept the terms or conditions on which the chiropractor is willing 
to deal with a payor. Paragraph II.C forbids the proposed respondents 
from facilitating exchanges of information between chiropractors 
concerning whether, or on what terms, to contract with a payor. 
Paragraph II.D prohibits proposed respondents from continuing a meeting 
of chiropractors after any person makes any statements regarding any 
chiropractor's intentions that if agreed to would violate Paragraphs 
II.A through II.C unless that person is ejected from the meeting. 
Paragraph E bars attempts to engage in any action prohibited by 
Paragraphs II.A through II.D, and Paragraph F proscribes inducing 
anyone to engage in any action prohibited by Paragraphs II.A through 
II.E.
    As in other Commission orders addressing health care providers' 
concerted action against health care purchasers, certain kinds of 
agreements are excluded from the general bar on joint negotiations. Mr. 
Hirtle would not be precluded from engaging in conduct that is 
reasonably necessary to form legitimate joint contracting arrangements 
among competing chiropractors, whether a ``qualified risk-sharing joint 
arrangement'' or a ``qualified clinically-integrated joint 
arrangement,'' or conduct that only involves chiropractors who are part 
of the same chiropractic group practice (defined in Paragraph I.F).
    As defined in the proposed order, a ``qualified risk-sharing joint 
arrangement'' possesses two key characteristics. First, all 
chiropractor participants must share substantial financial risk through 
the arrangement, such that the arrangement creates incentives for the 
participants jointly to control costs and improve quality by managing 
the provision of services. Second, any agreement concerning 
reimbursement or other terms or conditions of dealing must be 
reasonably necessary to obtain significant efficiencies through the 
joint arrangement.
    A ``qualified clinically-integrated joint arrangement,'' on the 
other hand, need not involve any sharing of financial risk. Instead, as 
defined in the proposed order, participants must participate in active 
and ongoing programs to evaluate and modify their clinical practice 
patterns in order to control costs and ensure the quality of services 
provided, and the arrangement must create a high degree of 
interdependence and cooperation among chiropractors. As with qualified 
risk-sharing arrangements, any agreement concerning price or other 
terms of dealing must be reasonably necessary to achieve the efficiency 
goals of the joint arrangement.
    Paragraph III provides that the order does not prevent CCA or CCC 
from exercising rights permitted under the First Amendment to the 
United States Constitution to petition the government.
    Paragraph IV requires that CCA and CCC maintain copies of written 
communications distributed to any chiropractor relating to the order.
    Paragraph V.A requires CCA and CCC to distribute the complaint and 
order to all chiropractors who have participated in CCA or CCC, and to 
payors identified in Appendix A. For five years, Paragraph V.B requires 
both CCA and CCC, respectively, to distribute the complaint and order 
to all chiropractors who become a member of CCA or CCC.
    Paragraphs V.C, V.D, VI, VII, and VIII of the proposed order impose 
various obligations on proposed respondents to report or provide access 
to information to the Commission to facilitate monitoring their 
compliance with the order.
    Paragraph IX provides that the proposed order will expire in 20 
years.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. E8-5089 Filed 3-13-08; 8:45 am]
BILLING CODE 6750-01-S