us-ftc-advisory-opinions-aaeec71af0bd203ac73ee9a52253b34f•American Podiatry Association
American Podiatry Association
us-ftc-advisory-opinions-aaeec71af0bd203ac73ee9a52253b34fAmerican Podiatry AssociationGuidance
re: Concerning peer review of fees, utilization, and quality of care.
Norman Kl k b e r s , DPM
E x e c u t i v e D i r e c t o r
h e r i ecan Podi a8 r y Associ a t I on
2 0 Chevp C h a s e Ci scl e
Was h i n g l o n , D,C, 2 0 0 3 5
J o h n G r a d , E s q ,
G e n e r a l Counsel
P o d i e t r y S s e i e t y of I q r g i r a i a
P o s t O f f i c e Box 1 2 2 6
A f e x a n d r i a , VA 22313
Dear Dr, Klmbers a n d M r , GFIsCJ:
T h i s l e t t e r r e s p o n d s t o t i l e request of t h e m e r i e l a n P o d i a t r y
AssscS a t i o n (eABAw) a n d t h e Podi & t r y Soei e t y of Vf r g i n l a ("PSV"),
a n APA e o ~ o n e w t s n e i e t p , f o r B C i s s i o n a d v i s o r y o p i n i o n
e o n c e r n f ng a p r o p o s e d psogr8m f o r peer r e v i e w of g o d i a t r l s t s 8
f e e s , uiilizstionI a n d q u a 1 i l y of c a r e , by APA a n d Its' component
podistric s o e i e t i e r . l e t t e r of Mereh 2 2 , 1983, APA a s k e d
w h e t h e r t h e r e i s s u a n c e of i t s P e e r R e v i e w G u i d e l i n e s and
n o c e d u r e s M a n u a l ( " G u i de1 i n e s R ) and t h e adoption &;PIC
implementetian of %!wee G u i d e 3 i n e y A esmpsnenl socletles
w o u l d vf c l l a t e t h e F e d e r a l T r a d e i s s i o n A c t , By l e t t e r of
J u n e 2 1 , 3 9 8 3 , PSV j o i n e d i n t h i s r e q u e s t , a n d e x p r e s s e d i t s
d e s i r e $ 0 a d o p t a n d i m p l m e n l t h e p r o p o s e d Guieelines. M A arid
PSV h a v b o t h a d v i s e d me t h a t , l o e x p e d i t e a r e s p o n s e t o t h e i r
r e q u e s t , they w o u l d t e s a t i s f i e d w i t h an advisory o p i n i o n l e t t e r
f r o m t h e B u r e a u of C m p e t i t i o n (mBureau"), p u r s u a n t t o Sect isrr
I , l ( b ) sf t h e C o m i s s i a n 3 R u l e s of Praelice.
1 I n t h e p a s t , Al.>A hrsls i s s u e d guidklLirres f o r u s c s ' b y i t s
eompanent s o e i e t ! PS, Foll l o w i n g t h e Supreme Court's d e e i s i o n
i n U n i o n Labor L i f e I n s . G o , V , Birena, -U I S . 102 S ,
C t , 3002 (1982), :{*kicR h e l d t h a t t h e p r o f e s s i o n a l peer r e v i e w
aetivltles i n I O I L ~ ~ e ~ s ewere n o t e x m p t f r m t h e a n t i t r u s t
laws a s p e r t of t h e " b u s i n e s s of i n s u r r s n e e , " " ABA r e c o r n e n d e d
l o I t s emponent jtocietf es t h e % t h e y I n d e f i n i t e l y s u s p e n d 6 ; ;
peer review 8eIivIties. APA now p r o p o s e s t o r e e o m e ; ~ d t o
component s o c i i e t ~ e s t h a t t h e y a g a i n eonduel p e e r review
a c t i v i l i e s i n a e e o r d a n e e w i t k APA8s Gui d e l i ncs.
~ o a m a hK l m b e r s , DPM a n d J o h n G r a d , E s q * Page 2 Adcording t o t h e f nfosmation you h a v e p r o v i d e d , M A i s a r o l l t . c~kporation existing as a confedera$6on o f fifty-two esmponenl sseielfes, w i f R cr t o t a l m m b e r s h i ? 0 3 . s l p p ~ o x l m a t c l y 8,2063 doctors of podilnlrf c medIeDrre l o c a t e d throughout % h e U ~ i l e d S l a t e s , PSV h a s approximately 1 2 5 m m b e n s , A l t h o u g h M A prepanred i t s Guidelines f o r use by t h e eomponenl s o c i e t y p e e r r e v i e w conmitlees, t h e y w i l l n o t be b I w d 3 n g ow c m p o n e n t b s c i e I : I e s a n d may be adopted w i t h modifieatiows. Tkf s advisory o p i n i o n , of c o u r s e r % B l i m f t e d t o t h e p r o p o s e d p r o g r m d e s c r i b e d i n M A 9 sad B P S V " ss u b i s s i o n , 1 understand t h a t APA's p u r p o s e i n re-eslab1Ishing i t s peer r e v i e w p r o g r m is t a p r o v i d e er mechanism l o r d e V o B u n t e r y r e s o l u t i o n of disputer r e g a r d i n g podi a t r i e s e r v i c e s ? A c c o r d i n g t o t h e p r o p o s e d G u i delines, patients, t h i k Q - p a r t y p a y e r s ( s u c h as i n s u r e r s ) , or p ~ d i ~ t r i s f s may r e q u e s t e?smpone~,ts s e i e t l e s t peer i t t e e s (10 r e v i e w t h e i r p a r t i e l a l a s disputes, The? m a t t e r s rev3 ewed. wii 1 1 i n c l u d e d i s p u k e s over padialaie f e e l e v e l s or over t h e q u a l i t y or n e c e s s i t y of c a r c e 3 The p a r t i e s t o a 8 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ - - ~ - - - - - - - - ~ - - - ~ - ~e a: sstlsted p u r p o s e of mC31scharg[ilrlgl a p a r t O E t h e g r ~ f e s s i o n ~ s r&pohsiibI11ly lo t h e 5 u b l I c lay a s s u r i n g t h a t Pees & r e i n a c c o r d wf l h t h e r a n g e o f u s u a l , e u s t m a r y , and r e a s o n a b l e c h a r g e s i n t h e p a r t icu18r eonmunf t y w c o u l d be i n t e r p r e t e d as e x p r e s s i n g an intention t h a t c m p o n e n b s o c i e t y peer r e v i e w comit"lees ~ c t on t h e i r own Ica p r e v e n t p o d i r a t r j s t s I r a , c h a r g i n g f e e s t h a t a r e n o t " i n r a e e ~ r d * ~ w i t h t h e eomunf t y a s u s u a l , customary, and r e a s o n a b l e c h a r g e s . S u c M j o i n t golieing of f e e s might m o u n t t o price-fixing. M A , however, h a s i n d i c a t e d t o u s t h a t t h e p s o g r m i s meant 6 0 s e r v e an i n f o r n a t i o n a l a n d m e d i e t a r y f u n ~ t i o n a n d t o ogeraste s o l e l y w h e n t h e p a r t i e s lo a d i s p u t e v c o B u n l a r I l y request a R e a r i n g ; f u r t h e r , I h e Association does n o t i n t e n d i t s s t a l e d p u r p o s e t o be r e a d or interpreted as i n v i t i n g o r c o n d o n i n g p r i c e - f i x i n g by members, The d e s i g n of t h e p r o g r m i s esnsistent w i t h t h i s representation. 3 A s I u n d e r s t a n d y o u r p r o p o s a l , t h e peer r e v i e w c wlI1 normally d ~ t e r n r i i n e whether a d f s p u t t d f e e is P"usraa19@o m e u s f m a ~ y , m O P m r e a ~ ~ ~ a b l e w by a p p l y i n g t h e definitions sf t h o s e terms t h a t a p p e a r i n t h e G u i d e l i n e s , P a r %i e u l a r t h i r d - p a r t y p a y e r s m a y d e f i n e t h o s e terms differently I n d e l i n e e l i n g t h e s c o p e sf t h e i r c o v e r a g e . Y o u have e x p l a i n e d , 8 however, t h a t a l l p e r t i c i p e t i n g p a y e r s w i l l be made awere s f t h e d e f i n i t i o n s t h e r e v i e w cornnitlees a p p l y . 11 a p a r t i c u l a r p a y e r p r e f e r s lo h a v e i t s own definition applied in t"n p e e r (Conl i n u e d )
Norman K l m b e r s , DBM e n d - - J o h n G r a d , E s q , Page 3 d i s p u t e m u s t volunta?ily a g r e e t o partleipate i n t h e peer r e v i e w proeegs, I n addition, peer r e v i e w determinatlsns wf 11 be rdvisory I n n a t u r e , unless t h e prca'rtfes Rave f r e e l y agreed m o n g , t h e r r r s t l v c s t o be bound, Y o u h v c f u r t h e r e x p l a i n e d , t h a t M A ' s . ecrqsnent s o e i e t i c s or t h e i r p e e r r e v i e w e o m i t t e e s w i l l n o t be I n v o l v e d I n t h e decfsicsn by t h e p a r t i t s w h e t h e r t o choose t o be bound by t h e r e s u l t s sf t h e p e e r review p r o c e s s , The p r o g r m described ir; t h e Guidelines copntrins o t h e r no"BbB e aspects, For e x m p l e, dc'd I b e r a t f sws anf d e e l s i sns try a n y f t t e e a r e C O D P S ~ d e b e d eomlidentf 11 c uniealiows, t c be r e l e a s e d o n l y t o t h e t h i r d - p a r t y p a y e r , t h e podiatrist b e i n g reviewed, a n d , when appropriate, l o t h e p a t i e n t , u n l e s s t h e law otherwise requires, Moreover, r e v i e w cornittee d e l i b e r a t i o n s a n d d e c i s i o n s a r e limited 4 0 %Re p a r t i c u l a r l e e o r u s e s f s e r v i c e s i n question* Parties dIssatisIIed w t h e decisions sf a p e e r r e v $ew c o m i t t e e a p p e a l t h e i t t e e 9 ddeeision I s the Regi onal Appeal s' i t t e e , w h i e k a11 t h e powers of r e v i e w t h e s t a t e c o m i possesses, P a r t i e s d i s s a t l s l i e d w i t h Reg'l o n a l A p p e a l s Connli t t e e d c e i s ji o n s rnay a p p e a l t o the 1 nsusance 8 Cornittee of " 2 e M A B o a r d of T r u s t e e s , but t h e Insurance i t t e e .crhalI gteeept Fee d i s p u t e s f o r a g p e e l o n l y w h e n t h e i s s u e i s u n u s u a l l l y important, As q s u k n o w , t h e a n t i t r u s t laws I r e a t p e e r r e v i e w sponsored by a professional assseiatisn as c o n c e r t e d a c t i v i t y of t h e members of t h e a s s o c i ~ t t i o n . S u c h j o i n t a c t i o n v i o l a t e s t h e F e d e r a l T r a d e C i s s i o n A e t a n d I h e o t h e r a n t i t r u s t news i f i t * u n r e a s o n a b l y r e s t r a i n s e o m p e t i l i o n , The m a j o r esmpetilive concern peer r e v i e w 001 f e e s e r e a l e s is t h a t i t may t h r e a t e n i n d e p e n a n t p r i c i n g by t h e a s s a e i a l i o n Q s a b e r s and dampen t h e e o s t - e o n t r o k g l l o r t s of t h i r d - p a r t y p a y e r s , r c s u l l i n g i n h i g h e r bees, Similarly, p e e r review i n v o l v i n g t h e n e c e s s i t y , o r q u a l i t y , of c a r e c a n i n j u r e e m p e l i t i o n i f u s e d t o diseourege o r PI i n d c r i n n o v a t i v e - p r a e l i ee t e c h n i q u e s O P c o s t - c o n t r o l a r r a n g m e n l s , T h e s e a n l i e m p e l i t i v e r e s u l t s wou:d, of c o u r s e , be most l i k e l y l a a e e u r i f t h e sponsoring organization h a s m a r k e t power or i n t e n d s s u c h resu11s, a n d f b p a t i e n t s , p a y e r s , o r g r a e t l t i o n e r s a r c coereed i n t o u s i n g t h e p e e r r e v i e w process a n d a b i d i n g by i t s deeisicns, ....................................... review p r o c e s s , i t m a y s o r e q u e s t , 1 1 t h a t request i s not 8 h o n o r e d , t h e p a y e r rnay, o f e o u r s e , choose e i t h e r n o t t o s o l h i t i t s elaitr? l o t h e peer r e v i e w cornitlee o r not l o follow t h e r e c o r n e n d e l i o n t h e c o r n i t l e e nnede,
Norman 'Klm b e r s , BPM r ~ n d J o h n G r a d , E s q , Page I On considering t h e request sumi t t e d by APA and PSY, t h e Bureau has reviewed b o t h t h e C " s s i o n 8 s a d v i s o r y opinion on f e e review issued April 8, 1982, h e Iowa D e n t a l Association, a n d . % s s l o n B s a d v i s o r y o p i n i o n ran utilization a n d , q u a l i t y (sf . lew issued May 9 , 8983, t o t h e RRode I s l nd Professional S t a n d a r d s R e v i e w Organizetion (eopi er The Bureau i s of t h e o p i n i o n t h a t operation sf t h e p r o p o s e d pees r e v i e w p r o g r m , as described, w o u l d not v i o l a t e S e c t i o n S of t h e F e d e r a l i s s i o n A c t , $ 5 U-S,C, S 4 5 , T h i s conclusion i s based on s e v e r a l elmewts, Pibast, M A u s i n t e n t i n designing t h e proposed program or f n recornending t h a t c m p o n e n t soei e t i ts r e c o m e n e e peer r e v i ew a e l i v i t i es does n o t a p p e a r t o be antieompetitive, Moreover, t h e v o l u n t a r y and a d v i s o r y $ n a t u r e of t h e p r o g r m m a k e s i t unlikely t h a t t h e p e e r r e v i e w p r o c e s s , i f o p e . r a t e d as proposed, c o u l d be used e i t h e r ( a ) l o c o e r c e t h e p a r t i e s i n t o cirdoptirrg t h e policies of M A o r i i s component societies o r ( b ) t o f e e i l i l a t e p r l e e - - f i x i n g , boycotts, or o t h e r a n t i e m p e t i t i ve eonspi r a c i e s . F u r t h e r , t h e p r o c e d u r a l 8 saf e g u a h d s d e s c r i b e d above s k o u l cJ 1 i m i I t h e d i s s m i n a l i on of i n f o m a t i a n eoneerning t h e matters u n d e r r e v i e w a n d t k e i r results, lms o b v i a t i n g a n y f e a r s t h a t t h e p r o c e s s m i g h t i n f l u e n c e p r a e l f e e s i n a whole c u n i t y or s t a l e , I t t h e r e f o r e a p p e a r s u n l i k e l y lhrnl t h e proposed progrclrn w i l l c a u s e s i g n i i f i c a n l antiempctibive e f f e c t s i n m a r k e t s f o r t h e f i n a n c i n g or p r o v i s i o n of podi a t r i c s e r v i e e s . me----w----*------------------------------ 8 W e h a v e a l s o reviewed t h e S u p r e m e C o u r t ' s d e c i s i o n i n O n i o n ~ a b d r~ i f e ~ n s u r a r i e eC O , v , ~ i r e s a o , U ~ S - 1 0 2 S. er, 3 0 0 2 ( 1 9 8 2 1 , The P i r e n o d e c i s i o n d i d not d e c i d e w h e t h e r p e e r revi*ew p r o g r m s v i o l a t e t h e a n t i t r u s t laws, h e a d o n l y t h a t peer review does not c o n s t i t u t e t h e ""business s f i n s u r a n c e m a n d t l l e r e f u r c : is s u b j e c t t o a n t i t r u s t s e r u l i n y , and no o t h e r c a s e has a d d r e s s e d t h e lcgelity u n d e r t h e a n t i t r u s t laws of p e p ? r e v i e w p r o g s m s , ' As discussed a b o v e , t h e p r o g r a m APA p r o p o s e s i s a d v i r o r v unless t h e p e r t i c?s l o a d i s p u t e i n d e p e n d e n t l y clgyee l o b e bound by t h e r e s u I t s f t h e p e e r r e v i e w p r o e e s s , Beecluse n e i t h e r MA nor I t s l o c a l components will p a r t l e i p a l e i n t h e p a a r l I e s 9 independent a g r e e m e n t l a a b i d e by Ifre decisicsrr of t h e p e e r r e v i e w process, nor a t t e m p t l o a s s u r e s u c i 8 eompl i a n c e , t h e s p o n s o r i n g s o e i e t y e a n n o l coerce o r put u n d u e p r e s s u r e o n t h e p s r l i e i p e i n t r c n..3o ehoose l o be bound.
Norman X l m b e s s , DBM &!PC J o h n G r a d , Esq. Page 5 I n f a e l , imp"aemew~ation of t h e proposed p a s g r m may benefit empc"l hit isn, t h e r e b y benefi t i n g e o n s m e ~ s . As I k e $: s l a t e d l n I t s a d v i s o r y o p i n i o n t o t h e RRode I s l a a d Professionel . S t a n d a r d s Revf e w Organization, p e e r r e v %aw p r s g r m s p r a v i d e esntr81eting i n s u r e r s , emp1sytrs, and e s n s m e r s wi t h @ e x p e r t w o m i n d e c i d i n g w h e t h e r t o pay f o r m e d i c a l @ a r e i n p a r t i c u l a r i n s t a n c e s . Beeause p e e r r e v i e w can h e l p p a r t i c i p a t i n g h e a l t h c a r e p l a n s redtree c o s t s , i t may I n c r e a s e t h e c m p e a i t i v e incentives f o r o t h e r Bhi sd-pbr t y p a y e r s t o part i c i g a t e i n e f f e c t i v e cost-con%&$ ranera6 p r o g r m s . P e e r r e v $cw p s o g b m s may a l s o c a u s e market-wide p r e s s u r e on prov"rde:rs t o preetice i n a c o s t - c o n s c i o u s m a n n e r , a n d g i v e t h m greater Incentives to do s o - I n Implementing t h e p r o p o s e d p r o g s m , c a n " l n n 4 d a r e a n d vigilance s h o u l d be exercised 6s i n s u r e t h a t t h e p r o g r ~ r n " p u r p o s e remains legitimate a n d t h a t i t does n o t p r o d u c e significant a n t i e m p e t i t i v e e f f e c t s and t h e r e b y v i o l a t e t h e antitrust laws. T h e B u r e a u r e t a i n s t h e r i g h t t o r e c o n s i d e r t h e questions i n v o l v e d a n d , w i t h n o t i c e t o t h e r e q u e s t i n g p a r t y , t o 8 r e s c i n d or revoke i t s o p i n i o n i f implementdntican of libre p r o p o s e d peer r e v i e w p r o g r a n : r e s u l l s i n s u b s t a n t i a l a n t i e m p e l i t i v e c f l e e t s , i f t h e p r o g r . m is u s e d f o r improper p u r p o s e s , o r I f i t w o u l d be i n t h e p u b l i e i n t e r e s t I o do s o , F i n a l l y , as my s t a f f h a s s d v i s e d y o u , t h e above l e g a l a d v i c e is; t h a t of t h e B u r e a u of C m p e t i t i o n o n l y . U n d e r I h e issisn" R u l e s sf P r c a e t i e e SI.3(e), t h e G i s s i o n i s Isor bound by t h i s a d v i c e a n d r e s e r v e s t h e r i g h t t o r e s c i n d . i t a t as l a t e a "ime. ~i rectbr /B u r e a u of C m p e t i l i o n
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