FOR IMMEDIATE RELEASE                                          AT
WEDNESDAY, JULY 30, 1997                           (202) 616-2771
                                               TDD (202) 514-1888

   JUSTICE DEPARTMENT WILL NOT CHALLENGE PROPOSAL BY A GROUP OF
          PHYSICIANS IN VERMONT TO FORM A JOINT VENTURE


     WASHINGTON, D.C. -- The Department of Justice said today
that it would not challenge a proposal by a group of physicians
from various medical specialties in the Rutland, Vermont area to
join together to offer their services as a group to third-party
payers. 

     The Department said that the proposed activities of the
Vermont Physicians Clinic are not likely to lessen competition
substantially in physician services in the Rutland area.   
 
     Under the proposal, approximately 40 physicians from
multiple specialties in the Rutland, Vermont area would operate a
joint venture known as the Vermont Physicians Clinic.  The Clinic
will negotiate risk contracts with third-party payers, provide
utilization review, quality improvement and administrative
services to produce significant efficiencies that would benefit
third-party payers and their subscribers. 
 
     The joint venture is to include no more than 30 percent of
the physicians in most physician specialties in the Rutland area. 
In those specialties in which the Vermont Physicians Clinic will
include more than 30 percent of the physicians, the Department
concluded the venture was not likely to lessen competition
substantially.

     The Department said that managed care plans and other third-
party payers had expressed no concern that Vermont Physicians
Clinic would cause substantial anticompetitive effects, but were
enthusiastic at the prospect of a joint venture because they
believe that the Clinic will provide competition to the managed
care panel of physicians formed by the only hospital in the
Rutland area.

     The Department said that it would be concerned if a
significant number of the physicians in the Vermont Physicians
Clinic terminated their existing contracts with third-party
payers or refused to negotiate individually with them in the
future.  The Clinic has stated that this is not the intention of
participating physicians.

     The Department's position was stated in a business review
letter issued by Joel I. Klein, Assistant Attorney General in
charge of the Antitrust Division. 

     Under the Department's business review procedure, an
organization may submit a proposed action to the Antitrust
Division and receive a statement as to whether the Division will
challenge the action 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, Suite 215 Liberty Place, 325 7th
Street, N.W., 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 a basis for
their exclusion for reasons of confidentiality has been
established pursuant to Paragraph 10(c) of the Business Review
Procedure.
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