Don't shoot the messenger: Independent physicians and joint payment contracting using the messenger model

University of Memphis Law Review, The, Summer 2002 by Clemons, Miriam L

Nevertheless, the court agreed with the order, which allowed WHO to restructure as a valid messenger model, as long as it did not "coordinate individual providers' responses to a particular proposal, disseminate to physicians the messenger's or other physicians' views or intention concerning the proposal, act as an agent for collective negotiation and agreement, or otherwise serve to facilitate collusive behavior."136

The Antitrust Procedures and Penalties Act,137 in order to ensure that the settlement is in the public interest, requires the United States to solicit and publish public comments on a proposed settlement prior to its entry by the federal court as a final judgment. The United States is required to respond to each comment and address the issues prior to the entry of the final judgment. The court must give deference to the DOJ's assessment of the potential competitive consequences raised by the commentators, and may reject it only if it has exceptional confidence that the adverse antitrust consequences will result-- perhaps akin to the confidence that would justify a court in overturning the predictive judgments of an administrative agency.138 The comments made on proposed health care antitrust settlements mirror the concerns that the parties have expressed before. The MCO's object to allowing non-integrated providers any latitude to jointly negotiate. Their greatest fear is that the messenger will, by tacit complicity with the members, leverage the joint negotiating power of the provider group to the detriment of the MCO. Providers raise concerns that the relative disparity in bargaining power leaves them vulnerable to a disadvantageous contract.

comments, to which the DOJ Antitrust Division responded in detail.139 GHI was concerned that the number of participants allowed into the WPHO messenger model was unlimited.140 An opportunity for unlimited enrollment, it contended, gives the providers too much power in the marketplace and may lead to refusal to deal with some MCO's, or even to boycotts. Instead, GHI proposed limiting enrollment in the messenger model to only thirty percent of the market, claiming this would prevent boycotts and also ensure that the network's compliance can be easily monitored.141 The DOJ found these limits to be inappropriate for a properly operating messenger model.142

The critical feature of a properly devised and operated messenger model . . . is that individual physicians make their own separate decisions about whether to accept or reject a purchaser's proposal, independent of the other physicians' decisions and without any influence from the messenger. Thus, the messenger model ... already contains adequate safeguards against its being used as a vehicle for organizing a physician boycott.143

the conduct remedy was justified, but objecting to the structural element of the order.152 Its objection did not center on the lack of any structural requirement in the Statements. Rather, it focused on the anomalies that may arise in trying to limit enrollment in a relatively small market such as Fairbanks, Alaska.153 AHN hoped that the public comment period would provide guidance from "the bar, the medical community, and the public at large, both with respect to the general appropriations of structural measures in 'conduct' cases and with regard to whether such measures make sense in a thinly populated market such as Fairbanks."54