Federal Trade Comission

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In the given case, the Federal Trade Commission claimed that Texas Surgeons Independent Practice Association(IPA) of 26 general surgeons in the Austin, Texas and six competing medical practice groups who are the members of this association (the respondents), Texas Surgeons P.A. ("Texas Surgeons"), Austin Surgeons, P.L.L.C. ("AS"), Austin Surgical Clinic Association, P.A. ("ASCA"), Bruce McDonald & Associates, P.L.L.C. ("BM&A"), Capital Surgeons Group, P.L.L.C. ("CSG"), Central Texas Surgical Associates, P.A. ("CTSA"), and Surgical Associates of Austin, P.A. ("SAA"), violated Section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45 by engaging in unlawful act of price fixing.

FTC alleged complaint that the IPA organized collective refused to deal with two health plans, Blue cross Blue Shield and United Health Care of Texas, terminated the contract with Blue Cross Blue Shield and threatened to terminate contracts with the United Health Care of Texas if the payer refuse to agree with their demand of raising reimbursement rate. As per demand, both plans increased their rates. Blue Cross accepted a rate agreement with the respondents in early 1998 after facing problems getting an emergency room patient treated by a general surgeon. The respondents collectively secured rate agreement resulted nearly 30% above the April 1997 level.

In this case, the practices of the respondents went against the welfare of the public, constitute unfair methods of competition and antitrust actions. This anti competitive action cost health plan, employers and patients, more than $1,000,000 for surgical services in 1998 and 1999 in the Austin, Texas area. In the mid-1970, the FTC formed a section within the Bureau of Competition to investigate potential anti trust violations involving healthcare. In the health care area, as in the case of any other field, the antitrust laws are enforced so check not only possible competitive harm but also the potential for pro...
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