Michael P. Connair, M.D.
12 Village Street, Suite 8
North Haven, CT 06473
Phone: (203) 777-2044 Fax: (203) 773-3641
| ||September 7, 2007|
|Joseph Miller., Esq., Acting Chief
United States Department of Justice
1401 H Street, N.W., Suite 4000
Washington, D.C. 20530
Via Federal Express
Dear Attorney Miller:
The "Plaintiffs Competitive Impact Statement Concerning the Proposed Final Judgment as to
the Federation of Physicians & Dentists and Lynda Odenkirk" (Case No. 1:05-CV-431 filed on
7-2-07) is inaccurate in several respects and harmful not only to the Federation, but to any
physician who must contract with a managed care insurer and chooses to use the third-party
messenger system to negotiate a fair deal.
Here are the problems with the Competitive Impact Statement:
- The Statement ignores the fact that physicians were forced to react to
anti-competitive behaviors by Cincinnati insurers because the Department of Justice
did not enforce antitrust principles against those insurers. The DOJ allowed a
monopsony of insurers to impose unrealistic contract terms on obstetricians and to fix
prices below fair value. These insurers had driven prices to below Medicare levels,
which created an unsustainable financial loss for those doctors. Most physicians
charge at least 2-3 times Medicare rates as a fair price.
- The actions of the doctors are inaccurately described as a".. conspiracy
to artificially raise fees by healthcare insurers to Federation members in
the Cincinnati area...". The doctors were.actually trying to partially
reverse the artificial depression of fees resulting from the concerted,
unopposed and unwarranted fee depression by the insurance monopsony
- The Statement ignores the consequences of not resisting the artificial
depression of fees by insurers in Cincinnati. Financial hardship caused by
unfair reimbursement would have caused many Cincinnati obstetricians to
stop practicing there, compromising patient access to a critical specialty.
This is an example of price fixing by insurers resulting secondarily in harm
to the public; this anticompetitive pricing by insurers has not been addressed by
the DOJ, typical of DOJ enforcement policy in general.
- The prosecution of doctors in Cincinnati is not an isolated case of the DOJ
attacking physicians for alleged antitrust activity while ignoring the
anticompetitive activities of insurers that triggered the physician actions.
The AMA has cited more than twenty (20) antitrust cases against
physicians in the last few years and not a single example of the DOJ
prosecuting an insurance company for predatory contracting practices.
The cases usually settle by consent decree because of the threat of huge
defense costs. The cost to defend such cases properly is punitive, not
within the reach of small physician organizations or a non-profit Union like
the Federation of Physicians & Dentists. The cost to defend the orthopedic
surgeons in Delaware from similar antitrust charges was $1.5 million.
The one-sided antitrust enforcement policy of the DOJ and the political
motivations for that policy are therefore not exposed publicly in court.
- The consent decree is supposed to"... eliminate a substantial restraint on
price competition among competing ob-gyns..." The only real effect of the
consent decree will be to eliminate physician resistance to the downward
unopposed coordinated pressure on fees by insurers.
- Neutralizing the Federation will eliminate a strong proponent for the proper
use of the third-party messenger system. The Federation has educated
physicians in many states in its proper use, often preventing the misuse of
the technique. Without an experienced nonprofit organization like the
Federation, doctors will be less willing to use the third-party messenger
system for fear of making errors resulting in DOJ prosecution.
- The insurers have the ear of the DOJ and the DOJ responds to requests
from insurers to initiate the investigation and prosecution of physician
organizations that resist unfair contracts and fee schedules. It is the
experience of the Federation that the DOJ does not respond to similar
physician requests for help against anti-competitive insurance company
behavior including price fixing. Mr. Kramer has stated that the DOJ will
prosecute insurers for price fixing. I ask that your department provide me
with some examples of such investigations and/or prosecution of insurers.
- The one-sided DOJ enforcement policy against physicians and in favor of
insurers perverts the intent of the Sherman Act. Antitrust rules are
supposed to prevent huge corporations from taking advantage of
consumers (patients) and small businesses (doctor offices). The large
insurers in this case and similar cases use the DOJ as a weapon against
physician resistance to unfair contracts to increase insurer profits.
This Competitive Impact Statement reflects a misguided DOJ enforcement policy that ignores antitrust
principles and that encourages anticompetitive behavior by insurers. The enforcement
policy interferes with the ability of physicians to manage a medical practice and to
continue to provide the best care for their patients.
Michael P. Connair, M.D.
Past President, Connecticut Orthopaedic Society
Vice President, National Union of Hospital of Healthcare Employees
Vice President, Federation of
Physicians and Dentists
Provided oral and written
testimony to House Committee
the Judiciary for
Campbell Bill 1998, and written
testimony for the
Campbell/Conyers Bill 1999