Physician Antitrust Exemption Legislation

Contact: Rebecca Sullivan Julianne Lamay (617) 638-8491

PHYSICIAN ANTITRUST EXEMPTION LEGISLATION COULD INCREASE PHYSICIANS' NEGOTIATING POWER

Boston, MA- Physician antitrust exemption legislation recently proposed at both the state and federal levels could impact health care costs and considerably alter the relationship between physicians and managed health care plans. Researchers from Boston University School of Public Health (BUSPH) and the Agency for Health Care Research and Quality recently published their analysis of this significant legislative development in the July 3rd issue of the Journal of the American Medical Association (JAMA).

Under current antitrust law, physicians are largely prohibited from joining together and negotiating fees with managed care plans. Antitrust policy supports the principle that competition within the marketplace promotes consumer welfare. When competing entities join together and agree on fees or prices, it can be viewed as price fixing by antitrust officials. Fee negotiations by groups of physicians from different practices with managed care plans, therefore, are often in violation of antitrust policy.

Physicians claim that current antitrust policy places them at a competitive disadvantage in their negotiations with managed care plans. They contend that while most physicians belong to practices that treat a small proportion of the population in their market, the consolidation among health plans has given the managed care plans substantial market power. Critics of the legislation claim that the law would enhance the economic power of physicians and increase health care costs, making health care less affordable for consumers. In the District of Columbia, where physician antitrust exemption legislation passed, the financial control board blocked implementation of the law due to concerns about its impact on cost of care. In many of the states where this legislation has been proposed, the new law if passed, would likely impose significant limits on physicians' ability to collectively negotiate fees. However, a federal bill proposed last year would have provided almost all physicians the opportunity to join together to negotiate fees. The federal bill was intended to give physicians union-like status for purposes of negotiating with managed care plans.

"While it is unlikely legislation at the state level would noticeably alter the balance of power between physicians and managed care plans, federal legislation would considerably change the physician/managed care plan relationship, shifting the power towards the physician," said Gary Young, PhD, JD, associate professor of health services at BUSPH, and co-author of the JAMA article. "Unfortunately, there is little research about the potential impact of such legislation on health care costs to guide policy makers."

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