FOR IMMEDIATE RELEASE                                          AT
TUESDAY, JUNE 10, 1997                             (202) 616-2771
                                               TDD (202) 514-1888

       JUSTICE DEPARTMENT WILL NOT CHALLENGE JOINT VENTURE
               OF NEW MEXICO ORTHOPEDIC SPECIALISTS


     WASHINGTON, D.C. -- The Department of Justice said today
that it would not challenge a proposed joint venture among
orthopedic specialists in Albuquerque, New Mexico.

     In a Business Review Letter issued by the Department's
Antitrust Division, Joel I. Klein, Acting Assistant Attorney
General said, "the proposed joint venture of Southwest Orthopedic
Specialists (SOS) meets the safety zone criteria for non-
exclusive physician joint ventures, and thus will not be
challenged by the Department."

     Under the proposal, the risk-bearing joint venture would be
created among ten initial orthopedic specialists in Albuquerque. 
SOS would then recruit additional members to provide adequate
coverage for third party payers whose enrollees live throughout
the state of New Mexico.  At no time, however, would the group
exceed 30% of the orthopedic specialists in any relevant
geographic market.  SOS views Albuquerque as its primary market,
but notes that since Albuquerque is the only tertiary health care
center in New Mexico, specialists in Albuquerque essentially
serve a statewide population.

     Risk would be shared among group members either by accepting
"capitated rates" from third party insurers, or by offering
services under a discounted fee-for-service schedule with a 15%
"withhold held at risk" unless SOS as a group meets certain
efficiency and quality goals.  Information regarding each
member's charges and other competitively sensitive issues would
be collected by an independent agent, who would generate a fee
schedule and other proposed contract terms for approval by the
SOS Board of Directors.  If approved, the fee schedule and other
terms would be used as a basis for negotiating contracts with
managed care groups on behalf of the members of SOS.

     There are approximately 72 orthopedic specialists in the
Albuquerque metropolitan area, including one group of 14
orthopedists and one sports medicine/family practice specialist
that SOS believes holds a significant percentage of managed care
contracts in the Albuquerque area.  SOS would thus be providing a
competitive alternative to this group for payers with covered
lives in Albuquerque and New Mexico.

     Statement 8 of the Statements of Antitrust Enforcement
Policy in Health Care jointly issued by the Department of Justice
and the Federal Trade Commission states that, absent
extraordinary circumstances, the Department will not challenge a
non-exclusive physician network joint venture whose participants
share substantial financial risk and constitute 30% or fewer of
the physicians in a practice specialty in a relevant market.     

     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.  20004. 
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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