FTC Resolves Pricing Issues with Alta Bates

In In the Matter of Alta Bates Medical Group Inc., the FTC resolved its price-fixing concerns that the company had 1) made, received, rejected and countered price offers to and from insurers without going back to its individual doctors to find out what price each would take for their services; 2) tried to limit the products Keiser Permanente Insurance Corp. could offer to consumers with the “sole purpose” of “impeding competition” for medical services in the region; and 3) did not sufficiently integrate individual practices that make up its membership either financially or clinically to allow the group to negotiate the fee-for-service contracts on a collective basis.  The proposed consent order the two sides settled on provides that while Alta Bates is still permitted to 1) continue to negotiate the capital payment contracts; and 2)  handle any negotiations required for it to take part in “qualified risk-sharing or “qualified clinically-integrated” joint arrangements, Alta Bates 1) is barred from fixing prices or engaging in future concerted refusals to deal with certain insurers; 2) must tell FTC before making certain types of contracts with insurers; and 3) must end some of its pre-existing contracts stemming from the illegal collective negotiations without incurring penalties. 

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