us-ftc-advisory-opinions-4c79c0a5ce8415ad3ab49af1483b7823•Passaic County Medical Society
Passaic County Medical Society
us-ftc-advisory-opinions-4c79c0a5ce8415ad3ab49af1483b7823Passaic County Medical SocietyGuidance
re: Concerning a professional society’s peer review of physicians' fees that is mandatory and binding on the physician.
8ureau sfCsmpsllti~n FEDERAL mADE COMMISSION WA13H!PIODON, D,G, gii%imTI a&uise 2xacative Dirsctor Passaic Csmty Medical S o c i e t y 6 6 1 Broad Street C l i f t o n , New Jersey 07013 P n i a is in raspase ts ysur letter sf Septembee 16, 1985, i n wh%eb you request g u i d m e s a n c c r a i n g certain medical society deer revie@ activities, f . w d s r s t a n d t h a t J L P l Frurrrin sf this o f f i c e has s ~ f ~ t i k a a request has 8 w i t h mu by t a l e p b n e and that ysua been s u p p i a e n t e d c y infomaeion provided ts her o r a l l y . In y o u Letterr you explained that s h c e J U y 1982, the Passaie County Medical Society (the 'Societym)-has*refused f n s u r e r s ~ r e c q u e s l s . taar the Society mediate d i s p u t e s regacding physiciansD fees on t h e basis of leg i s s i o n - decision and order i n the see You s t a t e . tnac the Society f r e f u s i n g s u c h requests and e s n t a p l a t e s conducting a fee review progrm, You sezk inforaation tegacdLng the antitrust h p l i e a t i o n s sf s u c h a S P D J t r n * a e f a r t addressing the particuAars of y o u r proposed pragrm, let me correct the Sociely8s apparent misunderstanding of the Coramissisn" final obder in the-~lanerieanXedicaP ~ssociatioa case, As issued on Zhy lbgr 1982, the o ~ d e g i j e a ~ tII-A) 2 x ; p r e " ~ s l ~ - s x c e p t s p e w review o f - p h y s i c i s n s ~ f e gpractices from its - g r . ~ n i a i c i o n s , r h u s , the order does 30t prohibit professional assoc~seiansfrom conducting l e g i t h a t e Eee review prsgraras, f cda erlr=ha&inga cagy or" chis srde?is Ear y o u r e s v i e w , AS you explained i n your l a t t e z , and in your telephone cvrlvarscasicaha w i t n as, F r m f n , as c u r e n t l i y contemplated, t h e sraposad Eee review psogrsra would be ccnduc~edby the Saciety8s J u d r c r a i Camittee (the @ConursifteeS), rhe Cornittee is 3 s e a n d r ~ l gcommittee consisting 0 5 ten members who each s e r v e a 0 f iva-year tees, As peoposed, u w n the C itteeDs cecsi2t 3 E a request E O P fee a d j u d i c a t i o n , t h e physician whose fee i s at issue d o u l d oe rzguiesd to sumit to en& review, and 3e or she als.7 waaLd be required to abide oy the Committee" decision. N e i t b e r
a3e i n s u e 9 rrers t h e patient who initiates a c a p l a i n k w o d d be necascratfnv h m &&teats detamination, You have secread u a k %he- @ sd e d s b a w s u d be eomEfdentlal~ that is, decisi~nsby Lttae waad not be diasminated to the SoeieQ- general mabershbp, but woad b e released only to t h e affected paztiee, A s m, P ~ m l nhas infamed yau, the Camission p r e v i o u s l y has given advice concerning t h e legal issuers surrounding paer geview af feesp ufi l i z a t i s n , and q u a l i t y oE care in a Apr FS, 1982 advisory apinion letter to t h e Zma Dental Assseiation, m d i n a ~ a y %983 advisory spinion bettee to t h e Wade Zsland Professional Standuds Revkew Osganizaticosr, I n Zbugut 3983# the Bureau o f C m p e t i t i o n also i s s u & an advisozy opinion ta the Uerican P d i a t s y Usociaeion m a y z i n g a e hegalFw oE the Usoeiationgs prco~see2 fee recrfw grrogr-, X = ene&crering copies of t h e s e letters fa= y a w anvewimca, Taken tagather, these three opinion Letters provide s Lairly prekensive analysis of t h e iss-s by proLessionaL asaciationr geer revfew, These Lereuos e q enemaUy tba& p r o f e s s i o n d assodadon ~ e r 8 t i z i v a in&en+ L% ~prstrrant, as ~ C Ftkla prqrm partkcripator ~ l m I a r i l ~ , t h e a d v i e gFven b advissry Ln n a t u r e , a d t h e ~esarLtsof t h e paer revbeus ~ocsasrrare keph corrf idanrtbal, -- Given these guidallnas, & w a d appear t h e Society's p r o p s e d grrogrm we,- M wee @gent f r a t h e mlwtary advisory f e e review progrms lflr ~ L Y by blxh t h e ~ P B P Q V @ ~ ission a d the Brrreau of Cagetition, and the p r o g r a t s operation toad ~ a i s esariom a n t i e r w e prsblenas, Fdcst, t h e pcsposed g e o g r a L s aadatary, nok ~ L u t a s yEor taabers, Thrss, in ordee ts jsira. ol= rstsia an-bership Ln the S s c i e t y , a p h y s i c i a n ia&t agree ta aLLaw eke i t t e e to deeide t h e appropniat--nebs af ark fees Eor w k i c h a Laint bas been received, Second, the phlysrcraa a w e agree to auide by the Camitsee" d e c i s i o n with respect to a i s or her challenged fee, In essence, u n d e ~the S o c i z c y h p p r o ~ s e dgrogs-, the Cornittee, a c a b i n a t i o n oE coaapetrng p n y a i c i a n s , is grmeed b t h t h e r i g h e and t h e power to sdr c~mgetitors' fees .- r q ~ r s a n t sthar rcrulld no% appear ta be ceasanaolg necessary to achieve a prscorapetitivcr? benefit, T h u s 5 S ~ C O L ac~avitiesm a j eonsf i t u t e an mreasonabla r s s t r iction on gr ice comlpetitisn, and fberefsrcs aary vialate t k s a n t i t r u s t laws, When a revied process is b t h mandatory and bindingl it becmes increasingly lpsseibla that the progosed p r a q r a can be used a L t h a 60 coerce the paegies wka are b u d i n t o adapting a 0 seciet.j-approved (or ittee-approved) "fee schedule,a sr t h a t a s o c i e t y naighf m a n i p d a t e or we t h e teview process i n ar.lar to f acFli tate an aneicompetitlw eonspiraey or boycatt, Xn c a u t i o n i n g you about t h e risks i n h e r e n t i n t3e 3acieey8s proposed p r o g r a r we note t h a t nothing in your lelter, .ac in your conversation w i ~ h .;aso Fruaain, suggests t h a t $he S o c i e t y is estaalishing the proposed prsgrm far an anticompetitive
pupose. The fact t h a t t h e Cornittee would n o t release the rasliLts of its fee review decisions to t h e Society's general membe~shipshould h e l p p r e v e n t t h e C "e f f e c t i v e l y setting fees charged by iety lEIiauevee: tnis safeguard would n o t appaaE to counteract aLI risk of p e t i t i v e results frcln operation of t h e plan, and w e conrinue to believe t h a t , a s proposed, t h e program presents setiow antitsuse r i s k s , You snould be awace t h a t t h e above advice does not b i n d eithee tne C i s ~ i o nOr the B u r e a u of Competition* B o t h t h e i s s i u n and t h e Bueau of Competition r e t a i n t h e r i g h t to nsidez the q u a s t i o n s involved. X f impLenentation of t h e proposed program results i n s u b s t a n t i a l a n t i c a p e t i t i v e effects, or if fhe pcogram is u s e d f o r improper purposes, t h e B u r e a u or i s s i o n may t a k e such action as would be in the p u b l i c be&ees+* 1 hope t h a t this information is h e l p f u l to you, If you have any q u e s t i o n s , please fctL free to call me at ( 2 0 2 ) 724-1341 or, U,. Frmin at& (202) %2&U40. -- msls(sat Bisector
-- - - DIrectsr o f Heal* care SEP 1 8 m5Bureau s f C a p e t i t d o n FEERAL mAE GWLSSIBN . * 6 t h and Pennsylvania Avenw, t Wash jngtsn ,B, C, 2W01 a; 8. 3, @- t As aF July, 1982-t h i s Mdtcal Socfety has refused t h e reqwsts o f Insurmce carriers Far it t o act as an arbiter t o judge the reasonableness sf fees a &bl~ged f o r mdtcaH services that a t h i r d party 1s called won t o pay, In madring t h f r dedslon, t h e s c f e t y relied on the oplnlon o f its legal munoel, mrirrasal, i n Qrtr, re1led om b t R th Federal %a& Gannrrri sslorn C)r&r(Docket Ha, 9 W D Zssmd tJlw B, IS1E and the vf e a expreswd by t h e UnS"eeB Stales Sulprae Court I n Un"ion L a b r Life Insurance Cowany u, BSrenc, &c"l& June 8, 1982, w As you are no & u b t aware. there is considerable pressure for medical socttles &atska a IRC)I"C aetfm ale $R mvf ewl ng fees i n 1f g h t QQ csntaimnt o f health msts- I q ~ ~ f l d f l o g t b f r pressure, t@ w f h d OOIPS@~VIL IR t k gasIt"len erC mv"lawierg o u r p ~ T l e y~ 1 9s%aQd ahve* To k 3or b n f o m t t y wf"l; g g u i e l "lnas set dDm by solo- State Socfety, the review (sfFees suhttted by frrrswarrce earrie~sww1d take place w i t h i n the "-Jud8c$el structure of our Sa"lty- mat concerns us f s %kirk the JuCdlcIa1 Cmlttw, upon r r c e t p t of sufh a r~quest,c a a s to a conciustlon which is . bfndjng! on the pDPys%a=iiara, Fwbher, t h e pkysf clm has rao choice as t s s u b l t t i n g t o tk J u d l d a l Comaltte+'s revlen o r refusing t o subaft. I an ewclesfng f o p yo&? refe~enc-et h e currsmt Bylaw of thDs Soefety &ill t n g u t t h t h e Judf clal C m i t@%, as e l 1 as t h a t Ganmnit&e% GuideHines For rf~lvtewinrg c a s e and the Rules and Rqulatlons of the JudichaO Ceunci 1 of %heh d f c a l Society a l Hew Jeney -. b y &d clr % h i sSocdey I s bund, Me w9 1t apracf ate t h e L n e f l t aC yaur ~i danm a t y(~r;lrearl l e s t C O R V E ? ~ ~ ena, 642 Smad SC Glifr;on. M.J. 07CC37 3 (2C311"+;77-24C30
A, Receipt 0% c m l a i n t 1, a patient &o wdshes to PBle a camlalnt shall h advised by PCMS Staff t o first try to. resolve the prcsblm by speaking w i t h the physfci an; 2, all c q l a i n t s m u s t k suhitted t o the Jud"ie"lal Gmittee i n writing; 3, r e c e i p t o f the emplaint shall be aeknawledge a t once and i n writing by PaS Staff i 4 if agpraprlale, copies of a i l b i l l s , receipts, canceled checks, o r mdical records %ha81k rquested, 1 a a p y o f t h e c o ~ l a l s r tshall k sent t o t h e Involved physician st once; 2- tk physicrlm shall k Instructed "t respond i n wrf Ling w i t h i n t e n t y (261) &y?e sf reefpt o f letter, 16 t h e phslcdarr fafils t o respond, It w"l1 mm mat Cle/sk accepts the CacQ of t R i r astter as stated, 3- fF wpr@s4ate, cooles of', a1l b"i Is%,raccfpts, o r lrrediczll records s h a l l be r-wtgd; L, a e &azifrman o f the Garar~rltteeshal-I &sfgna%e 2 G-Sttee m m k r s t o rewiew t h e c~s(??;; t 2. C O P ~ + S o f the conplalnt and-the p h p f c l a n 8 s response S h a l l bc sent ta the &signaled m b e r s ; 3. the dCslgma&d m b e r s . are incouyaged-to d l scuss the matter wf t h t h e fnvsked physf cim t o derrrrfrne $9 the matter--may h resolved; 4, the &sfgnated m k r s shall prepam a wr7tten response t o the pallent, I 8 , t h e ksiignated m k r s shall present qlre ease t o the Cmbttee along w i t h pertdnent Infomation (aeg, a l t m t t o medf a@) and also the proposed wri Lten response; 2, the C,-ittee shall discuss the ease and come t~ e res91gticn c? the matter; 3, should further i n f a m a t i o n o r elarlQ2catjon be requiy-ad, the Cmm4ttee may:: a) reqmst sme ftm the parties involved, b ) i n v i t e the physkcfan t o m e t w"lh the @ w i t t e e ; 4, should cameration by the p h f i 4 c t a n k nee&d t o resolve the case ( e , g . reduction of fw), the G a i t t e e shall gain such cs~perationFrom the physician, E, Wesol utjon 1, the patient and physfcian s h a l l be infamed simultaneously of the C o m i t t e 9 resolution, 0
I n h l v e s r metcar & O & , ek Seago mrd' clb kdigtial - L. @eQallalrtrgbhgrr3allmr,, ,,.' -. * * terns a m blndlarg cr I sc Crrscl ts dee3& Aalhcrr o r m(r k w0 11 ccrrrfem Orr srddlticwr, aCgeri arrr fcsrry...flve (45) day Oet-s myp In rAelr m h l Q )so~golLcll md1-1 eraCCs md other a p p r ~ r i - Ies, rrur, I n d i e r e d , of the\ r Qlndlngs and dabemlna- flarrr, h y dfssaf f o Q ~ c ~ ~ c K ) t n w i v l n g t h e JudltOal or erg9 nrrachaert snr -- Lry f d i vl cl-1 nl: rwlcrtBcrr -' I c ~ s ~ ~ 0 9 ,
RULES and REGUUT O QNS f o r the procarsing o f grlawaocas on& c-lolnes invaiving mmbers of t h e Mcdrcal Society of Jersey and l e a emponcEt mdlcol soclceies , CENSURE w i t h i n t h e ncdlcal Sse%esy of N m Jersey's Judicial Hechanism has genera 11y for%wec%. tw f o m f s : 1 * A rewsC raf censure to t f r c r r . -lee d l & Is r w & re a eom* d l - 9 ssie~ly- md. pub1 l r h d In. hhar winurczr rhrrwf, It m y also bc: publlthad In t h e Bul l e gi n o f e h r qlv m cowty mdlca 1 o s e l a v or?.olheml scr In t h e j udg- . > . - m e 814;tb Judfclat -_-._ - - -- .. -
I* a) k cqlelrre against .a hCn8-I 09 H w dh 6 or &all ars received by t h e referrad to t h e nb mdlcal r w l s l y BB ich t h e r s h l p) to h l c h pkyrl~llrrr- e r a a m r by (ha JrrdlcOal b w e f 1) shall n w be c- p l a e d and o m e w i t b u t delay to the Judlclrl @mcll of e b * d l ~ a 1 S B C I ~ C ~ OF M w JerseyD In t h e a r e of I r i n t s mde by t h f r d partiesr rbra prrlcmb- o r paclerrcs &a- ~ C I C C L E Y C ~ t h e mdlca) car(+ rmdrrred r h w l d atso b r Invl tad to ateend t h e hearing, cr,.fallura o f su& p r c l c n t s Eo r s s m d to such i n v i e a c l m shall no%ecsnscltu&a basis for cancalla- Elm of tho hearing.
11, Ac: tha L I ~ B L ~ D to elre .paeIer t o the OF naelal 8 nc o f r h r flrrdl~rcgsa8 r k O I C ~ , G18avma &-re b ghaf lrbe to rhw Jdlclatt mnclO of the kcelleal S x l e t y o f M w Jersey, ~ t e a ~ h ~ eirher"rby noc hold r hsrrring or e f Irr rlxCy d r y s (60) ubrrlttcad, the Sudlelrrl prrrduras; far the crffeellve m d p c q e procarslrr IrlnC,
E G U U T " t l QNS (emtf rrcrsd) " 13, If na request For appeal Is m d a w i t k i n the spaelffdd elmrr,a8 l srig8n.l exkibier racGlved I n cmjunerlm nl t h the c q l a l n t s -- su& as orlglnaia of pacsctlptlmr, letters, b i l l s , cte, -- shall be returned by t h e Judicial i et- of eha c nsnt smiety to the principal be principals &o subnrltted t h m , B I ttee sho l l ba sub J cet ro Insprreelm w c i u s l v a l y b - mdor lea Iaga1. clsrrrrrel, t legal ~=4)~1119elc
ne Judicfal mchanim i s fn&n&d t o make aval lable a mans whereby dZ FCPerences - and dfsangmwnts I n the areas of ethical and prafess-5~nalconduct can be b r o u g h t to a settlment t h a t is fair t o t h e Interest o f a l ~ p a r t i e s , mchanim Zs inten&d t o dmonslrate t h a t mdlcine can mui&&ly and micably settle Ots own pssblms I n the areas af ethfcal md grosfessfonal conduct, ( 6 N J dudleial . Re pr8mary objeerl;.f ves of t h e Judtcfal wehanf rn are: 11 b assum t h & basfc ~rirrcfplaso f a fa4r and obJecklve hearZng shall kl: acmr&d ma phsicfm *ae professional conduct dr kOng revfeed; 8 %cetorr 25s- CBIllposftIorr - - 9- (A) The Judlclal Canaftre+ shall k ihc.judiclal body o f t h i s Socfety and shall eonslsz o f tm (10) wbe~r, ~ p d n - d by tka prasf&nt sf this Scjety. (8) Each amber shalT be mpolnwd f6; a tcm of ftve (5)pars. Helshe may - succeed self one, brrt Srr no ass. shall a mkr serve far mra than ten (10) *ars, A1 1 hm n e on June 1st and terninat2 on May 31st sf the approprf ate year- - (c) president s h a l l a t I: a b a h c c 9m m k r s h f p anreng the mfaaJor specialties and t h e h s s p i t s l b d i c a l Staffs, ( 0 ) Yo k a:-kr aC t h e 3ud4clal Crznrmitbe, one must k an aestve wmkr un p o d standlng for a t least Flve (5) flara, ( E l No offfcer o r LrusQe of t h f s SecBaty s h a l l serw as a mkr of the Judicial G m b the, (F] Bke presfdent may appoint u@ t o two (2) non-pRpicOans f o r a tern 0% one (I) p a r , Such a mmkr may k.m-agpa i n t e d For a period n o t t o exceed f ib e (51 years total,
( A ) n e J u d i cia1 Cmmittee shaVl m e t as soon after the Annual Meeting as is I convenient for t k purp~seo f ~ P ~ I U I I ; Z Z ~ ~ ~ O R , it %ball wet: nereafter, as often as may be necessary t o transact T t s business, a t the call of the cboaSrgersan,. or a t t h e request BC any Fdve (5) OF" tgO mmkrs, Five (51 m k r s shau constitute a quarw, I (8) A chairpersopi, agpdlnteaf by t h e prasfdanrt For a t a m sf one (19 mar, s h a l l presi& a t a l l m e t f a g s of the Juddcdal C m i t t e e , The cbadvesson shal7 be selected Qrmthe w k r s h l p of the c m l t t e e and shall have b t h a vojce i n a l l &ilkratiarro and the r i g h t favo-, (C) ne Execrrt iva Dbaector aF t h f s Sefaty, a r a sLaQf person &sf gnated by t h e GmiLbebs chaiversan, %ha13serve as secretary Lo the Judfcfa1 C m l t t e e far t h e purpose of a c t l ~ t ga s Ib agenee R l s person shall n o t k a mkr 1 not w e , T& swsctary shall k present Buri n q It- md) shral l hays a w fee h e n &me4 mproprtate by tk clrafrlperson,, - -----__ _ _ _ _ _ _ _ -3 ([3) me Judtcfal Cnrrranfttee shaDl Fuac%Llsrr I n canfomity wS&R the: s t i p c r l a t i ~ n s s e t fortla fn these Bylam, t b a m Rules*arrd Regula"tions, and elre Rules a ~ l d Wagulatfons,pracrlgated by me Sud$daB Ca;unc-% o f th &d"ical OQcte%y o f +- --. 9 9. Mew Jersw- - - - - .- - ?.- =eZr - (f) m e drr6feSa3 Crndtbe shall k giufded fn I t s & l " l r a t ? ~ n s by: . L) t h e G~nst4Lutian&ad8yla- OF t h e Passalc County &d"ieaB Socfety; 2) the C c n s t i b t l o n and Bylaw of the h d i c a l Society o f #ew Jersey; " 3) the ectieal SocDety a f New the @I;rr$ons af t h e Judicftrl Goaras;il @I: Jersey; 4) the @toions o f t h e Judtcfal Come41 o f the h r i c a r r e d i c a l Assoei ation; 3) the Cad af.~ & ~ ~ " : c s +can k d f c a l Assocfattsn; 06 t h e 6) lam, Rules and RequOattans grwutgated by civil gsvernwnt* The d u t i e s s f the Juddcial Comitae shall k as Ccllows: 13 t o i n k r p r e t and rule upon a01 questlono of an ethical nature t h a t shall confront %hemmbership or any c a m i t t e e at ather e n t i t y of t h i s Society; v 2! t o ~ d j u d i c a t ea l l BFspuees o r contrsversfes arising withfn Lnis Society;
3 ) ta r e ~ @ $ inqu.lries from any source ve c o ~ 1 a i s l t s 1aceusatfans or ~ n c e r n 4 n gthe prenfessfonal conduct o r ethfca'd deparment of m b e r s o f t h i s Sacdety; 41t; t o carry out the Rules and Regulatfons prmulgated by the ~bdicial :Council o f the Wdfcal Society of New Jersey, %c"eon 5, Powers i A ) % n pursuance of i t s investigatory and judicial functlsns, the Judicial C m i t t e e shall have- autkorrty to:-" 1) mawst IIIPQ~~QIc)I)QP hestirnay frm rill m k r s , WO "BlfuH Fat lure U emperate w l t h tk e m i t b e OFB th p a r t of any makr may be consfdered as a basfs f o r disclpllnary aetfon by the c s m i t b e agsSnst SU& @ah$; -D n& s ress'lutfont my mtmt sub1t b c l t o t h e c m t t b e , Fallurn o f any mmkr @ sbf& b y t h e &cisIon a$ t h e ccxnrrrrDtLee shall k greunds for dfscdglfnsry action; n a. m&krt a *pew k f a * tk e m i t * * Faflure of a s ta respond b s as, w f tlrout s reason acceptable t o the: cmilge?eshall k grounds fir dtsclpllnary actdon; 4) censure, suspmd or a p e 1 any mbr Far just cause; 5 ) report by witten e m l a l r r t Lo LA& Jliadtcf a%Courrcl l of the &dl cal %cJety of Nw Jersey any reasanable grounds o r ev9dene of a I n~attercrsgnfrable by the? M& Jersey State Board of He Ieal . . Qmfniro as a gmund f a r rewcst"lan or suspensfon sf'a ltcense t o practlee mdicine and s u r p r y , (8.1 ~ n eJudicial f Etee '~Doa%l haee let? 8~11thariLy i t s mandate t o P u l f i l l ds stated f n t h i s Bylaw and wdthSn the gui&lines &taf l e d i n Section 3 ( E l and shall k free of review by any other b d y jn t h i s Society except Qstthe @peals Prseess as established by the JudfcTaB Counci 1 o f . t h e Medical Society of New Jersey,
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