California PPO

Bursau of Competit~on
FEDERAL TRADE COMMISSION
wnSnlNCTON, 0.C M W
March 	17, 	1986
Michael A. 	Duneheon, 	E a q ~ i r e
Han80nr Bridgett, 	Marcus, 	Vlahor 	& 	Stromberg
333 Market 	Street, Suite 	2300
San francisco, 	California 	94105
Rec 	Request 	for Advisory 	m i n i a n
you 	have 	requested 	an opinion 	latter 	Crm 	t h e 	rtrff 	of the
bureau 	of Competition 	concerning 	activities 	propred 	to bg 	under-
taken by 	yaur 	client, 	a preferred 	provider 	organization 	(PP6),
whose 	identity 	you 	have 	not 	dirclored 	in order 	to avoid gor#ibBe
competitive 	disadvantagee
I_--	-Specifically, 	you 	have 	asked 	whether 	propored 	action 	by 	the
PPO 	in 	negotiating 	contracts 	with 	third-party 	payers, 	which
establish 	the price 	at 	which 	health 	care 	services may 	be 	pur-
chased 	by 	such 	payers 	through 	the PPO, 	would 	conrtitute 	a 	er 	8e
violation 	of Section 	1 of 	the Sherman Act 	a8 	aprice-fixingE'r
In 	this 	regard, 	your 	client 	proporcd 	that 	its PPO providers 	agree
to accept 	as 	full payment, 	for 	health care 	services provided 	to
enrolled 	patients, 	prices 	that 	are 	negotiated 	by 	the PPO with
group 	purchasers 	who 	choose 	to do 	burine8s 	with 	it. 	There will
be 	no 	agreementh 	express 	or 	implied, 	among 	the participating
providers 	regarding 	the prices 	that 	the providers 	will 	charge 	to
any 	patients, 	beneficiarieh 	or 	purchasers 	not 	contracting
through 	the PPO.
According 	to 	the 	information 	you 	have 	provided, 	yoor 	client
is 	an 	incorporated 	joint 	venture 	of 	a 	limited 	number 	of 	hospitals
and 	physicians 	in 	two counties 	in California. 	You? 	client's 	board
of 	directors consists of 	equal 	numbers 	of 	hospital 	and 	physician
representatives. 	Its 	shareholders are 	16 	nonprofit 	hospitals 	and
16 phyrician 	organizations, 	called 	Physician 	Practice Group., 	or
ePPCr,m comprised 	of 	fee-for-service 	physicians 	who 	arc members
of 	the shareholder 	hospitals'rrcspective medical 	staffs. 	The 	16
Although 	the Commission 	does 	not 	enforce 	the Sherman Act,
conduct 	that 	violates 	the Act 	is 	an 	"unfair 	method 	of 	com-
petition," 	and 	can 	be 	prevented 	by 	the Commission 	under 	S 	5
of 	the Federal Trade 	Commission 	Act, 	15 U.S.C. 	S 	45 	(1982).
-	See 	FTC 	v , 	Cement 	Institute, 	333 	U.S. 	683, 	691 	(1948).	-

holders 	has purchased 	100 ahares of cornon 	stock 	in your 	client
at 	8 	cost 	per 	shareholder of 	f 10,000.00, 	in order 	to provide 	your
client 	with 	capital 	for organization and 	operation.
Each 	ahareholder 	hospital 	or 	PPC will 	enter 	into 8 partici-
pation 	agreement 	directly 	with 	your 	client. 	The 	lb 	shareholder
p p ~ lwill 	a1.o 	enter 	into participation 	aggeements with 	indivdd-
physicians. 	Zn addition. 	your 	client m y 	.Ire 	enter 	into
p.rticipation 	&gre.ments 	with 	cettain 	hoapitatr 	and 	profes8ion.l
practice 	group. 	that 	are not 	shareholderr 	in yeyour 	client.
neceraagy 	to achieve 	the desired 	geographical disprrion 	and
acces~ibility for 	the 	. 	.R8tworkeo 	Participating 	providers 	in
the network 	will 	not 	be 	prohibited 	f r w doing 	business with 	other
progrums.
Your 	client 	proposes 	to negotiate 	contract8 with 	group 	health 	=;
care purchasers 	or 	third-party 	payers, 	including 	in8urance em-
panics, 	self-insured 	employers, 	union 	trusts, 	health 	maintenance
organizations, 	and 	health 	care 	service 	plans, 	whereby 	your 	client
will 	provide 	a 	*'network' 	of 	health 	care 	services 	. . . accessible
over 	a 	broad 	geographic 	area 	and 	which 	includes 	both 	8 horpital
and 	a physician 	component.* 	These 	contracts will, 	in effect,
establish 	the 	prices 	at 	which 	such 	purchasers 	may 	purchase 	con-
tract health 	care 	services 	through your 	client 	from 	its partici-
pating 	hospitals 	and 	physicians, 	and 	will 	offer 	"preferreda rates
to such purchasers:
You 	state 	that-your client's 	.fundamental 	business 	purpose"
is 	to 	"compete 	successfully 	in 	the market 	for 	the 	sale 	and
delivery 	of health 	care 	services 	to group health 	care purchasers,@
and 	that 	the participating 	hospitals 	and 	physicians 	have 	"par-
tially 	integrated 	marketing, 	contracting, 	quality 	assurance, 	and
utilization 	review 	functions." 	You 	also 	state 	that 	your 	client's
participant. 	.will 	share 	the 	risk 	in marketing 	'preferred' 	health
care 	services on 	a 	contract 	basis 	to group 	health 	care purchasers
in competition with 	other 	PPOs, 	other 	hospital 	systems, 	and 	other
hospitals 	and 	physicians.* 	In 	addition, 	you 	state 	that your
client 	"will engage 	in 	competition 	with 	existing 	insurance com-
panies, 	health 	care 	service 	plans, 	and 	other 	alternative delivery
systems 	such 	as Health 	Maintenance 	Organizations 	. . . .I
After 	review 	of 	the proposed 	plan 	of operation 	for 	the PPO,
we 	have 	concluded 	that 	we 	cannot 	provide 	you 	w i t h 	an 	advisory
opinion 	with 	respect 	to whether 	your 	client's 	proposed 	neqotia-
tion 	over 	price 	on 	behalf 	of 	its 	participating 	providers 	would

Michael 	A. 	Dunchean, 	Esquire
Page 	3
conrtitute a violation of 	Section 	1 of 	the Sherman Act 	or 	of
Section 	5 of 	the Federal Trade ~ o ~ f s 8 i o n 	A8 	explained	Act.
be&-, 	certain 	factual determinations 	not 	appr~priataly'madein
the context 	of 	the advisory 	opinion 	process 	w u l d 	be 	necessary 	i n
order 	to make 	a determination 	as 	to whether 	or 	not 	the proposed
conduct 	would 	be 	-	r e 	illegal or 	would 	otherwise 	be 	likely 	to
be 	illegal.
It appears 	that at 	leaat 	8om.r 	and 	perhaps 	many, 	of your
clientsr patticipating 	providers 	are, 	and 	will 	continue 	to be,
competitors 	of 	one 	another. 	For 	example, 	each 	PPG comprises 	fee-
for-sezviee 	physicians 	who practice 	at 	the same bo~pital, 	Each
PPGI thereforer appears 	to be 	conrbination of 	compgtitorr,
Since your 	cli@nter p&rticipating 	providers 	are 	its sbarebolders
and 	apparently 	@elect 	its board 	of 	dlrwtarr 	it 	also appear8 	Lbrg
vour 	client 	is a 	form of 	horizontal 	cmbination 	moncr 	c a a p e t t ~	0 	- -
t 	o 9~ 	~ 	~ 	@ 	338 	0.5,-350 	e m 352-54
( 1 9 6 V ). 	S e e . 	,Enforcement P o l i q
Witb 	Respect 	to Physician Agreement8 	to Control H.dica% 	Prepay-
Horizontal 	agreements 	among 	competitor8 regarding 	the price
at 	which 	those competitors will 	sell 	their products 	or 	services
are 	inherently 	su8pect 	under 	the antitrust 	law8, 	and, 	as 	the
Supreme 	Court 	has 	noted, 	are 	*among 	those concerted 	activities
petitfvel and 	likely 	without 	'redeeming virtue.'" 	-	Id. 	at 	9.
Thus, 	while 	naked 	horizontal 	price 	restraints by 	competitors 	are
per -	se 	illegal, 	such 	treatment 	is not 	appropriate 	where, 	even
At 	one p i n t 	you 	rtate 	that your 	client's 	'pafticipating
providers 	operate 	for 	the moat 	part 	in discrete geographic
submatkets, 	and 	there 	is 	little 	actual competition between
then nowem 	We 	preaume 	this statement 	refers only 	to hospi-
tal participating 	providers 	since each 	PPG would 	comprise
physicians 	practicing 	independently 	at 	the 	same hospital,
Even 	with 	regard 	to participating 	hospitals, 	however, 	these
hosnitals 	were 	not 	specifically 	identified, 	and 	no data 	--	L
patient 	origin- information -- were 	provided 	in 	support
e 	h 	u 	r 	conclusory 	statement 	that 	there 	is 	little competi-
tion 	among 	them, 	Of 	course, 	if 	it were 	shown 	that none of
your 	cli entrs 	participating 	providers 	in 	fact competes with
any 	other, 	no 	substantial 	antitrust 	price-fixing 	issue would
be 	raised.

- -
Michael 	A * 	Duncheon, 	Esquire
Page 	4
-	though prices 	are 	literally 	tired 	among 	two or 	more 	competitor., >
the setting 	of 	prices 	is ancillary 	and 	reasonably 	relat.ed to an 	a
-ovarall procomp.titivr 	joint venturr 	or 	new 	enterprise, -
The 	upr re me 	Court 	applied 	thir prfnclple 	in 	the Broadcast a
nusic 	case where 	it declined 	to apply 	er 	treatme
1fC.nsing 	arrangement 	pursuant 	to whicfhn 	a880ciati
composerr, 	authors, 	and 	music 	producers 	eetablished 	prices 	at which
the m a m b e r s ~ u s i c a Pworks 	would 	be 	licensed, 	The Court 	found 	that
the particular 	nature of 	the prQduct 	-copyrightd 	muric 	-- and
the virtual 	imposribility of 	individual ure 	negotiation8 	or paLis-
ing 	of 	the unauthorized 	u8e of copyrighted 	mcrteriulr 	r.quired 	ur.
of a 	blanket 	licensing concept, 	encompassing 	an agreement 	ar 	to
prierr 	if 	there war 	to br 	market 	at 	a11 	tar 	%Re produce, 	s,at 	18-21, 	23, 	The Court 	concludd 	that the blanket 	lieenring
arrangement had 	@certain unique 	characteristicrrm and creatd,
@to 8oane extent, 	a 	different product.@ 	_rd, 	at 	22, 	Tbe Court
subsequently characterized 	its holding 	In 	that care a@ 	a 	Cindlrrql
that 	"a 	joint 	selling 	arrangement may be 	8o efficient 	that 	it
will 	increase 	sellers@aggregate output 	and 	thu8 k pr0~0mp.tf- 	z s
tive." 	National 	Colleqiate 	Athletic 	Association 	v. 	Board 	of 	..
Reqents 	of 	University 	of 	Oklahoma, 	104 S. %t. 	2948, 	2961 	(1984)
("NCAA")	- 	.
In 	the -	NCAA 	case, 	the Court 	found 	that per 	8e 	treatment war
not 	appropriate 	in 	a 	situation where 	some horizontal 	restraint was 	;
required 	if 	a product 	was 	to be 	available 	at 	all. 	NCAA, 	104 8 , 	Ct. 	I
at 	2960. 	In 	that case, 	the Court 	considered 	the lepilft~ of 	restrie-
tionr on price 	and 	output 	of 	televised 	college 	football gamer, 	found,
that 	the marketing 	and 	sale of 	league sports 	inherently 	required 	6
some 	horizontal 	agreement 	among 	competftors, 	and 	determfned 	that s
rule-of-reason 	analysis was 	appropriate 	to consider 	the legality 	4
of 	particular 	restraints. 	The Court 	noted 	that 	*a 	restraint 	in a 	t
limited 	aspect of 	a market 	may 	actually 	enhance 	marketwide 	com-
petition.' 	NCAA, 	104 S. 	Ct. 	at 	2961-62. 	The Court 	found, 	how-
ever, 	that 	the challenged 	restraints on price 	and 	~ u t p u twere 	not
iintegral 	to the legitimate 	and 	procompetitive 	goals 	of 	the N C M 	in ioffering 	televised 	colle e 	football, 	Under 	the 	rule of 	reason,
the Court 	rejected 	petit f oners'proferred 	justifications and
found 	the restraints 	illegal. 	While 	recognizing 	that a 	joint 	g
selling 	arrangement 	may 	possible 	a 	new 	product 	by 	reaping ;	-
i
1/ 	Once 	the Court 	found 	an 	agreement 	not 	to compete 	in 	terms of 	- -
Y "L
price 	or 	output, 	its 	"rule of 	reason" 	anal 	sis was 	limited -to consideration of 	the defendant's 	justif cations 	for 	the 	--a
challenged 	restraints. 	In 	the 	absence 	of 	a 	valid 	justifica- 	1
tion, 	the NCAA? 	conduct 	was 	deemed 	to 	be 	unlawful 	without
proof 	of 	its market 	power. 	NCAA, 	104 S . 	Ct: 	at 	2965, 	2967. -
-
*

Michael 	A. 	Duncheon, 	Esquire
otherwise 	una
bad 	f	.	i	l	.	d 	to
2967 	(quoting
332r 	365 	(196
Xn Arizona 	v. 	Maricopa 	County Medical 	Society, 	457 U . Q . 	332
(1902), the Supreme Court 	addressed 	the legality 	under 	the anti-
trurt 	law8 of 	an 	arrangement 	whereby 	a grouP of 	c o m ~ t i n gphysi-
cians had 	jointly agreed, 	through 	8 foundat on 	for medical 	care,
o n mximurn 	prices 	at which 	they 	would 	sell their 	services 	to r u b
.criberr 	of 	health 	insurance progr-8 	@approvede 	by 	the 	foundam
elon. 	T h 8 	foundation 	for medical 	car8 also 	reviewed 	the medical
nacersity 	and 	approprlat8n88r 	of 	t r e a m e n t 	r e n d e r d 	by 	I t s r e p
begs 	for 	ruch 	8ubrcriberrr and 	acted 	a8 an 	@inruranc@ 	adminirtga-
tor@ 	by 	drawing 	check8 on 	inruranca 	conpany 	aecountr 	to pay 	the
phy8ician8 	for 	covered 	services 	r e n d e r d 	to 8ubscrikrs. 	Tn
holding 	the 	price 	agreement 	re 	il%egaX, 	t h e Suprela8 Court
rpecif ically 	rejected 	the 	a 	nt 	that 	the 	foundation 	a r r a n g e
ment 	created 	a 	new 	product, 	a8 	in Broadcart Music, 	and 	therefore
should 	be 	evaluated 	under 	the 	rule of 	reason:
The members 	of 	the 	foundation8 sell
medical 	services. 	Their 	combination 	in 	the
form 	of 	the 	foundation 	doer 	not 	permit 	them
to 	sell 	any 	different product 	. . . . 	The
agreement 	under 	attack 	i8 an agreement 	among
. . . competing 	doctors 	concerning 	the price
at 	which 	each 	will 	offer 	his 	own 	rervices 	to
a 	substantial number 	of 	consumers 	. . . .[The] fee agreement8 	. . . fit 	squarely 	into
the 	horizontal 	price-fixing 	mold.
4 5 9 	U . S . 	at 	356-57 	(footnote omitted). 	The Court 	further 	found
that 	there was 	no 	reason 	to believe 	that 	any 	efficiency 	ravings
of 	the 	arrangement 	would 	be 	wsufficfently great 	to affect 	the
competitivenessa of 	foundation-approved 	insurance 	plans. 	The
Court 	stated 	that 	it was 	.entirely 	possible 	that 	the potential 	or
actual 	power 	of 	the 	foundations 	to dictate 	the 	terms of 	such
insurance plans 	may 	more 	than offset 	the 	theoretical 	efficiencies
upon 	which 	the 	respondents' 	defense 	ultimately 	rests.. 	_l[d. 	at
353-54. 	4	J
In 	this connection, 	the Court 	noted 	that 	the 	price-setting
arrangement 	involved 	a 	group 	of 	physicians 	with 	substantial
power 	in 	the 	market 	for rnedrcal 	servrces. 	457 U.S. 	at 	354
n.29. 	-
- - - #

8
Michael 	A . 	D u n c h e o n , 	Esquire
Page 	6
In determining 	that no 	new 	product 	was 	being 	sold 	through
the combinationr the Court 	rtressed 	that 	there war 	no meaningful
Integrationr ruch 	as 	ling of 	capital or 	sharing 	of 	risk 	of
l088, 	uaong 	the competing participants. 	Id, 	at 	356, 	Further,
the Court 	found 	that 	the 	fixing of pricerTy 	the com-ting 	physi-
cians was 	not 	necessary 	to 	the 	achievement 	of 	the purported 	goals
of 	the foundation. 	Id. at 	352-54, 	356. 	Rather, 	the 8UEe goals
eould 	be 	accoarplirhed 	if prices 	were 	determined 	other 	than 	by
rggeement 	umong 	the competing 	physicians,
he 	Court" 	hhodfngs 	in 	and 	in 	its other decisions
articulating 	appropriate 	antitrurt 	analy8ir 	of 	joint venturer 	of
comnpetitors dictate 	that e e r t a 1 ~fundamantal w@stionr 	regarding
your 	clienta. 	propscd 	conduct would 	have 	to br 	an8wer.d 	fa 	ordeg
t o determine 	whether 	the conduct 	would 	b. il%eg81e 4/ 	]It doe. 	not
appear 	that 	these question8 can 	be 	8nrwer.d 	adequately 	in the
context 	of 	the advisory opinion 	procear 	on 	the 	fact. 	availabl@,
and 	issuance of 	advieory 	opinion. 	ir 	not 	appropriate when 	un
informed 	opinion 	can 	be 	made 	only 	after 	extenrive 	investigation
or 	collateral 	inquiry. 	Commirrion Ruler 	of Practice 	5 	l,l(b)
First, 	you 	state 	that your 	client will 	be 	offering 	a 	#new
productg 	in 	that 	the PPO will 	"offer a guaranteed 	per-unit 	price
for 	health 	care 	services, 	coupled 	with 	procedures 	designed 	to
control 	the 	number 	of 	units 	to be 	utilized," 	It 	is not clear,
however, 	without 	additional 	fact-finding 	and 	rnaly8i8, 	that 	the
arrangement 	in 	fact 	involves 	a 	new produce 	or 	that 	it creates
efficiencies so great 	as 	to distinguish 	it 	from plan8 	like 	that
in Marico~a, 	As 	was 	discussed 	above, 	the Supreme Court 	found 	in
Maricopa 	that 	horizontal 	agreement 	by 	physician8 	a8 	to maximum
prices 	was per 	se 	illegal 	in 	the context 	of 	a program 	where 	the
physicians 	guaranteed 	that 	tho8e maximum 	prices 	would 	be 	accepted
as 	full payment 	by 	the physicians, 	and 	the program 	likewise pro-
vided 	utilization 	controls, 	You 	state 	that 	the providers 	in your
client's 	proposed 	PPO have, 	to a certain 	extent, 	integrated 	their
operations 	and 	that 	they 	will 	contribute 	financially 	to the
You 	have 	requested 	guidance 	with 	respect 	to whether your
client's 	proposed 	conduct 	would 	be p 	r 	se 	illegal, 	As 	the
foregoing discussion 	makes 	clear, 	conduct 	appearing on 	its
face 	to 	impose a 	restraint 	on 	price 	competition or 	output
can 	be 	summarily 	condemned 	under 	the 	rule 	of 	reason 	if 	no
valid 	justification 	for 	it 	exists, 	even 	when 	the context 	of
the practice 	makes per% 	treatment 	inappropriate. 	We 	have
attempted, 	therefore, 	to provide 	guidance 	on 	the appro 	ria6e
@ 	P	antitrust 	analysis 	of 	your 	c 1 i e n t ' ~proposed 	conduct 	w 	thout
regard 	to 	the 	label 	that m i g h t 	be 	applied 	in 	the course 	of
the 	analysis. -

Michael 	A . 	Duncheon, 	Esquire
' 	Page 	7
venture. 	Yet, 	they 	apparently 	will 	continue 	to be 	competitors
arch 	other 	in offering 	their servicesr except 	to 	the extent 	price
comptition 	m 	y 	be 	lessened. 	m i l e 	such 	Laetors 	as 	ahar'ing the
rirk 	of 	loss 	and 	poreneial 	for 	profit 	of 	a 	fign co~pating in a
market 	are 	important 	in determining 	whether 	a 	new product 	is
being 	offered, 	it 	is 	not 	clear, 	without 	mote, 	that 	the limited
*pooling of 	capital,@' 6
i joint narketing, 	and 	other 	claimed 	mani-
featations ot 	integrat on propored 	by 	your 	client would 	be 	suffi-
cient 	to dirtinguisb 	the proposed 	plan 	from one 	like 	that 	in
, where 	the Court 	found 	that 	no new product 	war 	offered,
Second, 	even 	if 	it 	were 	deterained 	that 	t h e 	proposal 	involved
new product 	or 	.	n 	exceptionally 	efficient 	joint 	@elling 	or markst
thr pr ice-reg-
a n i m 	the plan
could 	not 	o m r a t e 	effectively 	and 	therefore 	it 	i r 	necerrarg 	pare
of 	the plan, 	determination ot 	this 	irrue would 	reputre a more
thorough 	factual analysir 	than 	is porrible 	bared on 	the 	infoma-
tion 	contained 	in your 	request 	or 	available at 	thir 	tire. 	?or
example, 	other 	proposed 	PPOs 	that 	involve price 	setting 	through
some mechanism 	other 	than agreement 	among 	competing 	participating
aproviders 	apparently 	are 	being 	or 	have 	been 	formed, 	The existence
and 	feasibility 	of 	such 	plans 	could 	undercut 	your 	mnecessity' 	argu-
ment 	regarding 	this 	aspect of 	the plan. 	However, 	the Supreme Courte@
reasoning 	in 	the cases discussed 	above may 	permit 	you 	to seek 	to
demonstrate 	that 	the proposed 	price-aetting 	mechanism 	in 	fact
significantly 	enhance8 	efficiency, 	although 	other 	plans 	can
operate 	without 	suqh 	a mechanism,
y 	For 	example, 	the 	financial 	contribution 	to your 	client's
PPO, 	while 	$10,000 	for 	each 	shareholder, 	could 	represent 	a
contribution of 	less 	than 	$100 per 	individual-physician.
1/ J. 	Paul Mffirath, while 	Assistant 	Attorney 	General 	for 	the
Antitrust 	Division 	of 	the Department 	of Justice, 	stated 	that
in his 	view, 	efficiency-enhancing 	integration sufficient 	to
avoid 	Maricopa' s per 	se 	rule could 	flow 	from 	the 	following
aspects 	of 	a provider-sponsored 	PPO's 	operations, 	among others:
an 	agreement 	among 	the 	physicians 	to accept 	discount 	fees with
no 	balance-billing 	of patients; 	utilization 	review by 	the PPOr
joint marketing 	or 	PPO 	administration 	of 	claims; 	and 	an 	agree-
ment 	by 	a panel 	of 	limited 	size 	to bid 	for contracts against
other 	such groups. 	Remarks 	of 	J. 	Paul McGrath 	before 	the
American 	Bar 	Association 	Antitrust 	Spring 	Meeting 	7-8
(March 22, 	1985).

4 	-Michael A . 	D u n c h e o n , 	z s q u r r e
Page 	8
@
f n addition, if 	the proposed 	price-setting 	arrangement were
a vital part of an arrangement creating a new product or substan-
tial procompetitive efficiencies, a determination that .thc eon-
duct would 	be legal would 	@till require a finding under 	the rube
of 	reason that the new competition created by 	the venture out-
weighed 	the eompcgition among 	its participants necesrarily
restrained by 	the venture. 	In this respect, of course, your
claim that the plan would 	lack market power 	is particularly
relevant, _Zl/
In conclu@ionr for the reasons explained 	above, we lack
sufficient information to determine the degree of difference in
critical respects batween your plan and planr 	like that condemned
in 	or whether 	these diffarancas would 	ba 	rufficient to
prog>o@ed price-related 	agreewentr, 	Therefore, we r r e
unable to supply you with 	the requested advisory opinion, 	We
wish 	to emphasize that this conclusion should not bo 	interpreted
a determination that your client" 	pgropored conduct would 	be
illegal or 	that the Comission would 	likely challenge the conm
duct. 	Rather, this conclusion reflects aur 	inability to make 	a
determination, from the facts given or available, a8 to the
legality of 	the proposed 	conduct.
Sincerely,
% A (. &9CCi-C
M. 	Elizabeth Gee
Assistant Director
y 	An official of 	the Antitrust Division of 	the Department 08
Justice has 	indicated 	that a provider-sponsored 	PPO having
as 	members 	fewer 	than 20% of 	actively practicing physician*
in a market would 	be 	unlikely 	to raise antitrust 	issues
relating 	to foreclosure of competition from other ?POs. 	4. t
at 	3-9.