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Description of Recent Price Fixing Case Essay

The recent news release last December 24, 2008 posted on the United States Federal Trade Commission (FTC) site is about how FTC settled the price-fixing charges against two separate doctors’ groups: one in Modesto, California and another in Boulder, Colorado. The multi-specialty IPAs Independent Practice Associates Medical Group, Inc.

, or AllCare IPA (AllCare), with 500 physicians in Modesto, California, and Boulder Valley Independent Practice Association (BVIPA), with 365 physicians in Boulder County, Colorado, were charged with orchestrating and carrying out agreements among their members to refuse, and threaten to refuse to deal with insurance providers, unless they raised the fees paid to the groups’ doctors (FTC, 2008). According to FTC, both groups violated the federal law. Neither engaged in activities that would have justified collective agreements on the prices its members would accept for their services.

Their actions lead to doctors with different specialty and services to unfairly have the same fee thus killing competitive pricing and harming patients with increased prices for physician’s services. The FTC’s proposed consent order, which expires in 20 years, details the prohibitions for the two groups, essentially aiming to eliminate the anticompetitive conduct they practiced. AllCare and BVIPA were also required to notify the FTC

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in advance before “contracting with health plans on behalf of physicians pursuant to either a qualified risk-sharing or qualified clinically-integrated joint arrangement” (FTC, 2008).

They are also to terminate certain contracts they illegally entered into. Both IPAs are required to distribute copies of the order to certain physicians and are kept on a leash as both have to meet other reporting and monitoring terms. Reference Federal Trade Commission. (2008, December 24). FTC Settles Price-Fixing Charges Against Two Separate Doctors’ Groups. Retrieved April 6, 2009, from http://www2. ftc. gov/opa/2008/12/allcare. shtm

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