Thursday, June 05, 2008

Price fixing by doctors?

As reported by the Statesman, two more groups of orthopedic doctors are "scolding" Blue Cross for lowering reimbursement. In fact, the doctors aren't just complaining, they're taking action and may be violating antitrust law.

The ortho doctors are complaining about the low rates, and in order to object, they say they'll no longer accept Blue Cross reimbursement. The patient must either agree to personally pay what the docs want, or find a doctor who will take Blue Cross. I've seen two ads in the Statesman announcing this decision by the groups. I suspect that groups identified in the story referenced above are also announcing that they will refuse Blue Cross. The Statesman says that 23 docs have taken out ads criticizing Blue Cross.

The ortho docs did something similar in the workers' compensation arena over the last 2-3 years. The legislature in 2004 (maybe 2005) required the Industrial Commission to institute a medical fee schedule, in order to reign in skyrocketing health care costs. When the Commission did that, ortho docs began to refuse to accept work comp patients. Group after group began to refuse work comp and soon injured workers could not get ortho treatment in Idaho. Insurance companies began sending the patients out of state. The ortho docs got very busy in the legislature, put pressure on the Commission, and the Commission eventually caved in and raised the ortho rates. The ortho docs returned and began to treat injured workers again.

Idaho has among the highest, and in many cases the absolute highest, reimbursement rates for ortho docs in work comp. The new med fee schedule did lower reimbursements some, but still maintained Idaho at the top end of reimbursements.

So it looks like the ortho docs are now going to try this tactic in the private health care field. Docs are prevented by antitrust law from conspiring to fix prices. Prices can be fixed by agreeing to charge a certain amount, but they can also be fixed by acting in concert to affect the price level. If the docs have agreed to pull out until they get a raise, that's probably price fixing.

The docs may know that they can't agree on a set price, but I'm not so sure they know that this group action can also be price fixing. After all, it worked with work comp. The ads announcing that they will no longer accept Blue Cross appear to be how they're trying to avoid being part of a conspiracy. They're not talking to each other about refusing Blue Cross, I suspect, but taking out a public ad announcing that they refuse BC is the same thing. I mean, why do they need the ad? They always ask a patient about insurance at intake, we all know that. If the patient has BC, the patient can be told at that time that the group won't accept it.

This bears out in the concerted action we're seeing. It looks more and more docs are now refusing BC. It may be that we'll be seeing more ads from docs. Blue Cross is a more formidable opponent than the Industrial Commission so this tactic might not work. Still, I hope someone from the Department of Justice, Antitrust division, looks into this situation.


fortboise said...

I would think the insurance companies would be found guilty of price fixing before a couple of complaining doctors.

Some witty comment about Idaho being a Right to Work state is bubbling around in my brain, but I can't quite get it out.

alan said...

It's not just a couple of docs. In the case of work comp, it was pretty much every ortho doc in the state. It looks like this dispute is headed to the same level of involvement.