FOR IMMEDIATE RELEASE                                          AT
FRIDAY, JUNE 28, 1996                              (202) 616-2771
                                               TDD (202) 514-1888
               

         JUSTICE DEPARTMENT WILL NOT CHALLENGE FORMATION
            OF PLASTIC SURGEON NETWORK IN CONNECTICUT

     WASHINGTON, D.C. -- The Department of Justice said today
that it would not challenge a proposal by eight Connecticut
plastic surgeons to form a network to contract with managed care
plans and other third-party payers.

     The Department's Antitrust Division said the proposed
network, to be called the Plastic Surgery Associates of
Connecticut LLC, falls within the safety zone for non-exclusive
physician network joint ventures that share significant financial
risk, as described in the Statements of Enforcement Policy and
Analytical Principles Relating to Health Care and Antitrust.  The
policy statements were issued jointly by the Department and the
FTC in 1994.  

     The Department also said that the proposed network may
provide efficiency-based benefits, including lower prices for
plastic surgery services to health care payers and consumers, and
foster increased competition in the delivery of plastic surgery
services.

     The Department's position was stated in a business review
letter from Anne K. Bingaman, Assistant Attorney General for the
Antitrust Division, to counsel for the plastic surgeons.

     The network would be formed by eight initial members, and
would contract through a managing director on behalf of its
members using either a discounted fee-for-service or a capitated
fee structure.  When contracting on a fee-for-service basis, a
substantial percentage, probably 20 percent, of fees paid will be
withheld and forfeited to payers unless Plastic Surgery

Associates meets cost containment goals mutually agreed to by
Plastic Surgery Associates and individual payers.  

     The network intends to create efficiencies through
integrated management and claims processing systems, and to bring
down plastic surgery costs through implementation of protocols
for high volume plastic surgery procedures.  Its members will be
permitted to contract individually with third-party payers or
other health care provider networks in competition with Plastic
Surgery Associates.

     The network plans to market its services in an area
corresponding to those Connecticut towns and cities currently
served by its members.  Payers agree that there are adequate
numbers of other plastic surgeons available as substitutes should
Plastic Surgery Associates attempt to raise prices or restrict
output of plastic surgery services.  Within any reasonably
configured geographic market, it appears that Plastic Surgery
Associates accounts for well under 30 percent of the available
plastic surgeons, the Department said.  

     Under the Department's Business Review Procedure, an
organization may submit a proposed course of 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 215 North, Liberty Place,
Department of Justice, Washington, D.C. 20530.  After a 30-day
waiting period, the documents supporting the business review will
be added to the file, unless confidentiality had been requested
pursuant to paragraph 10(c) of the Business Review Procedure.
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