U.S. Supreme Court declines to review practice price-fixing case

March 2, 2009

The U.S. Supreme Court declined to review February 23 a Fifth Circuit decision upholding the Federal Trade Commission's finding that North Texas Specialty Physicians illegally fixed prices in its negotiations with payors and its conduct was unrelated to procompetitive efficiencies.

This material originally appeared in the February 27, 2009, issue of Health Lawyers Weekly, a publication of the American Health Lawyers Association (www.healthlawyers.org).

The U.S. Supreme Court declined to review February 23 a Fifth Circuit decision upholding the Federal Trade Commission's (FTC's) finding that North Texas Specialty Physicians (NTSP) illegally fixed prices in its negotiations with payors and its conduct was unrelated to procompetitive efficiencies. 

The Fifth Circuit issued its decision in May 2008, affirming the FTC’s unanimous, November 2005 administrative opinion that, in negotiating its non-risk sharing contracts, NTSP engaged in conduct designed to enhance the collective bargaining power of its members and inhibit independent negotiations by individual physicians, which “amount[ed] to unlawful horizontal price fixing.” 

The FTC’s order required NTSP to cease and desist from engaging in unlawful price fixing and prohibited exchanging, or facilitating the exchange or transfer, of any information among physicians concerning their willingness, or lack thereof, to deal with or not deal with a payor, and prohibited any attempts to engage in such conduct. 

The Fifth Circuit did conclude, however, that one aspect of the FTC’s remedial order prohibiting the independent practice organization from dealing or refusing to deal with any payor was overly broad. 

North Texas Specialty Physicians v. Federal Trade Comm’n, No. 08-515 (U.S., cert. denied Feb. 23, 2009).