North Texas Chapter of the American College of Surgeons

Bureau sfCompelition
FEDERAL TRAOE COMMISSION
WASMCNGPBN, B.C.205@se,
December 	L.2, 	1985
8, Ward 	Lane, 	M,D,
Pzesident
Nocth 	Texas Chapter
h e r i e a n 	College s f 	Surgeons
3606 	Gaston Avenuep S u i t e 	994
Dallas, T X 75246
Dear 	Dr, Lane:
T h i s 	is in resmwse 	to y o u 	letter 	of October"21, 1985
zega~dingt b c 	a n t i t o w e 	implications sf v a r i o u s 	Qtowded*uses of
an alseady 	cmpletad 	fee s u r v e y 	condwted 	by 	t h e 	M w t k Texas
Chapter 	of 	t h e Mexican 	College of 	Surgeons 	(.AcS').According
to youn 	letters 	and OUE 	telephone 	csnversatisrrs, 	t h e 	XS,Loas
conducted a 	s w v e y of 	fees c h a ~ g e dby 	its 	6 5 8 member 	suogeaas,
~epresentingapproximately 50 	percent 	sf 	the surgeans 	p r a c t i c i n g
i n 	northern 	Texas, 	The 	purpose 	sf 	the 	s u r v e y 	is to pfovlde
infoemaeion to interested 	persons, 	s u c h 	as ACS m a b e o s , 	i n s u r e r s ,
MOa, 	hospitals, govarmental 	agencies, and 	i e n t s , 	regarding
the range 	of 	fees changed 	for 	the 	t e n most 	c 	on surgical.
procedures 	i n 	each srrrgicsll speciality, 	One anticipated 	use of
t h e 	s u r v e y 	is to faellitate i n d i v i d u a l 	negotiations 	between
surgeons 	and 	thied-party 	payers 	i n 	establishing reimbursement
levels, 	A l t h o u g h 	the WCS 	h a s 	n o t 	y e t 	decided 	e x a c t l y 	how 	to
d i s t r i b u t e 	car 	make a v a i l a b l e 	t h e 	s u r v e y , 	you mentioned 	t h a t 	one
inethod 	m i g n t 	be 	to send 	Lettecs 	to the 	v a r i o u s 	i n t e r e s t e d
p a r r i e s , 	s u c h 	as 	t h i e d - p a r t y 	p u r c h a s e r s 	and 	t h e 	member
s u r g e o n s . 	Ansther method 	m i g h t 	be 	to arrange 	for 	an 	article 	to
be - p q b l i shed 	i n 	Local 	newspapess ,
aased 	on 	the 	information 	p r o v i d e d 	in 	y o u r 	l e t t e r ,
distribution of 	t h e 	fee s u r v e y 	does not appear 	to 	r a i s e
significant a n e i e r w t 	issues. 	As 	1 discussed 	in my 	e a r l i e r
Letter, t h e 	antitrust L a w s 	f o r b i d 	agzeements 	among 	competitors o r
t h e i r 	agents 	that 	E i x , 	Eocauiate 	or 	i n t e r f e r e 	w i t h 	prices, 	fees,
0 s 	athemwise 	unreasonably 	r e s t r i c t 	terms 	sf 	trade. 	Depending on
the 	purpose and effect, t h e 	co%bectisn and 	exchange of 	price
information by 	an organization 	sf competitors 	can constitute or
facilitate an 	unlawful agreement 	t~ 	set or 	regulate 	p r i c e s . 	F r o a
y o u r 	deser i p t i o n 	of 	the ACS 	survey, 	its d i s t r ibutisn nay 	enhance,
r a t n e r 	t h a n 	r e s t r i c t , 	competition, 	F i r s t , 	the 	s t a t e d

p u m p s e 	for conducting a s u r v e y 	-- 	to enhance
bargaining between 	sur $eons and 	third-par ty pa 	v i d i n g 	a
data 	sase eon 	all parties 	-- 	is Legitimate and 	may 	pramate pe ice
cmpetition 	s u r g e o n s . 	S e a n d , 	certain 	aspects 	of 	the
s u r v e y 	and 	y o u r 	plans 	for 	i t s 	d i s t r i b u r i o n make 'it u n l i k e l y 	that
pgice 	~ L f a r n i t yis i n t e n d e d 	or anticipated, 	T h e 	s u r v e y 	r e s u l t s ,
by 	refLectPng 	a 	pang@ of 	fees, ace 	n o t 	as Likely 	t o 	serve 	as 	a
guide 	for 	m i f s e w 	p r i c i n g 	as w o u l d 	one 	spccifie p%iee, 	Also, 	t h e
survey's 	availability 	to b u y e r s 	and sellers 	is 	consistent w i t h
enhancing 	t h e 	procompetitive benefits of data skrari'ng,
Additionally, 	the s w v e y 	appears to 	impose 	a0 c
no one is expect
aegisn as a r e s a &of 	t k r 	ey 	findingsD 	Given 	these facts,
and 	in l i g h t of 	t h e 	stated 	pri~gpseand 	t h e 	g e n e e a l l y
mmfcancearteate n a t u r e 	oE SU;~QICBII 	the distribution of	matkets
the s w v a y does n o t 	appear 	likely to violate 	the Federal Trade
tssion A c t ,
Continued care s h a u l d 	be exercised 	to 	insme 	t h p t 	the
s u v e y ' s 	pwpse 	~ m a f n sl e g i t b a t e 	and 	t h a t 	it dms 	n o t 	produce
a n t i c m p c t i t i v e 	effects, 	For 	e x a p l e , 	a n t i t r u t 	concerns would
be raised i f 	it appeased t h a t 	t h e 	s u v e y was 	being 	wed 	far'
collectively affirming 	the " L e g i t h a c y ' 	o f 	fees t h a t 	f a l l w i t h i n
a partleular ranger 	which cslrLd suggesk 	e s l l u i o n 	m o n g 	t h e ACS
menbers, 	S l m i l a ~ L y , i f 	t h e 	s u r v e y 	r e s u L t s 	ware 	used 	to create
callacl;fve 	pressume 	an 	third-party 	payers 	to reiraburse 	at certain
levels; 	a La@ 	v i a l a t i o n 	might 	h 	fomd, 	I n 	this regaad, 	the ACS
s b U d 	be partieuLarly 	careferL s h a u l d 	it 	chmsa 	ts provide
information d i r e c t l y 	to 	third-party 	payers 	at 	the request of
i n d i v i d u a l 	surgeons, 	Such &onduct caul8 	mdes 	c e r t a i n
ciremstanees, 	indicate t h a t 	the AGS 	is a c t i n g 	as 	t h e
representative of 	i t s members 	i n 	defining 	fee l e v e l s ,
I n s m I 	a l t h o u g h 	t h e ACS" 	scanduct 	does n o t 	appear 	to raise
any 	serious 	a n t i t ~ u s tconcerns, 	t h e 	B u r e a u of Competition r e t a i n s
the r i g b t 	to reconsider 	the questions 	i n v o l v e d , 	and, w i t h 	notice
to ACS, 	to rescind 	or 	revoke 	its o p i n i o n 	iE 	t h e 	s u e v e y 	r e s u l t s 	i n
substantial anticompetitive 	effects, if 	the s u r v e y 	is used 	E O P
imprapee 	purposes, 	or 	if 	it w o u l d 	be 	i n 	the p u b l i c 	i n t e r e s t 	to do
so, 	Finally, 	t h e 	above 	l e g a l 	advise 	is t h a t 	sf 	t h e 	B u r e a u 	of
Competition 	o n l y , 	Under 	the Camission* 	R u l e s 	sf 	Practice,
S e c t i o n 	L , 3 ( c ) 	the Commission 	is 	n o t 	bound 	by 	t h i s 	a d v i c e 	a n d
eeserves the right 	to 	rescind 	it 	at a 	Later 	time,
Very 	t r u l y 	y o u r s ,
Nina 	8, 3aie
Attorney