JUSTICE DEPARTMENT APPROVES MERGER OF TWO NEW MEXICO PULMONARY PHYSICIAN GROUPS

WASHINGTON, D.C. -- The Department of Justice today approved the proposed merger of two New Mexico physician groups who treat pulmonary patients in the Albuquerque area after the Antitrust Division concluded the merged group, which will contain about 10 physicians, would not gain market power. More than 100 physicians offer similar services in the Albuquerque metropolitan area.

Pulmonary Associates Ltd. and Albuquerque Pulmonary Consultants P.A. are specialty physician groups that treat patients primarily in the Albuquerque area for allergies, asthma, and lung infections; perform bronchoscopies and thoracentesis; and place critically-ill patients on ventilators.

The two groups will employ eight full-time and two part-time pulmonologists.

The Department's position was stated in a business review letter from Anne K. Bingaman, Assistant Attorney General in charge of the Antitrust Division, to counsel for the two physician groups.

Bingaman said, "The Department concluded that the combination of the two groups would not create an entity that has market power--the power to raise prices and affect the availability of certain specialized surgical services."

Under the Department's business review procedure, a person or organization may submit a proposed action to the Antitrust Division and receive a statement as to whether the Division will challenge the activity under the antitrust laws.

A file containing the business review request and the Department's response may be examined in the Legal Procedure Unit of the Antitrust Division, Room 3233, Department of Justice, Washington, D.C. 20530. After a 30-day waiting period, the documents supporting the business review request will be added to the file.

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	U.S. Department of Justice Antitrust Division
Office of the Assistant Attorney General	Washington, DC 20530

OCT 3 1 1994

James M. Parker, Esquire
Modrall, Sperling, Roehl, Harris
   & Sisk, P.A. 500
Fourth Street, N.W.
Sunwest Building
Suite 1000
Post Office Box 2168
Albuquerque, New Mexico 87103-2168

Dear Mr. Parker:

This letter responds to your request on behalf of Pulmonary Associates, Ltd. (Associates) and Albuquerque Pulmonary Consultants, P.A. (Consultants) for the issuance of a business review letter pursuant to the Department of Justice's business review procedure, 28 C.F.R. § 50.6. You have requested a statement of the Department's current enforcement intentions with respect to the proposed combination of Associates and Consultants. For the reasons explained below, the Department currently does not intend to bring suit to block the proposed combination if Associates and Consultants go forward with their merger.

The facts, as we understand them, based on communications with you, Associates, Consultants, and other sources are as follows.

Associates and Consultants are pulmonary specialist physician groups in Albuquerque, New Mexico. Each employs five pulmonologists, four full time and one part time. Pulmonology is a major specialization recognized by the medical profession. Among other procedures, pulmonologists perform bronchoscopies and thoracentesis, place critically-ill patients on oxygen delivery systems, including ventilators and respirators, and perform more routine procedures such as treating allergies, asthma and infections affecting the lungs.

Based on our investigation of this matter, however, it appears that board-certified pulmonologists are not the exclusive providers of these medical procedures or treatments in the Albuquerque area. For example, general surgeons and cardiac surgeons place patients on ventilators; thoracic surgeons and internists perform thoracentesis; and family physicians and other primary care physicians treat patients for asthma, allergies, and lung infections. More than 100 physicians from various specialties were identified in the Albuquerque metropolitan area as providing each of these pulmonology-type services.

The health maintenance organizations and other third-party payors in Albuquerque currently employ, contract with or reimburse many nonpulmonologists to provide the same care and services as that provided by pulmonologists. The Medicare and Medicaid programs also allow and reimburse nonpulmonologists to provide pulmonology-type care and services.

In the geographic area of Albuquerque, New Mexico, in addition to Associates and Consultants, seven staff pulmonologists are employed by the University Hospital at the University of New Mexico and five pulmonologists are employed by the Lovelace Medical Center. Associates and Consultants admit and treat patients at the two major independent Albuquerque hospitals, Presbyterian Healthcare Services and St. Joseph Healthcare System. The staffs at both the Presbyterian and St. Joseph hospital facilities are open, and privileges for performing all types of pulmonary care, including the most complex pulmonary treatments, such as initiating the use of ventilators, have been awarded to many nonpulmonologists. At St. Joseph hospital, for example, 72 non-pulmonologists have ventilator privileges.

On the basis of our investigation, including interviews with third party payers in the Albuquerque area, it does not appear that the proposed combination would enable the members of the combined groups to exercise market power. The Department of Justice, therefore, does not intend to challenge the proposed combination of Consultants and Associates if the parties decide to proceed. In accord with our normal practice, however, the Department remains free to bring whatever action or proceeding it subsequently concludes is required by the public interest if the merger proves anticompetitive in purpose or effect.