Mission Statement
To Inform and Educate Eye MDs and provide Quality Eye Care for New Mexico

Policy Statement - Guidelines for the Avoidance of Inadvertent Anticompetitive Conduct

The New Mexico Ophthalmological Society (NMOS), with the advice of legal counsel, has adopted guidelines to help prevent inadvertent anticompetitive conduct. These guidelines apply to all of the NMOS fellows, members, trustees, officers, committee members, representatives, and employees.

Background:

Antitrust laws prohibit certain types of behavior and agreements, even among professionals and professional societies. NMOS members have dedicated years of study and effort to developing their skills and professional reputations, and NMOS does not want these tarnished by even the appearance of inappropriate behavior. Nor does NMOS want its members or the NMOS exposed to criminal penalties (for individuals, up to $350,000 and imprisonment up to three years for each offense, or up to $10,000,000 for organizations) or treble-damage civil lawsuits. These guidelines are intended to help you be aware of the basic rules and protect against the real risk that you, your practice group, or the NMOS could face needless litigation.

The exposure to antitrust litigation and expense – even if you and the NMOS ultimately prevail – is real. For example:

• In 1999 the U.S. Justice Department sued the Federation of Certified Surgeons and Specialists, Inc. and obtained a court order preventing it from negotiating with any payor on behalf of its physician members, and from facilitating any agreement or understanding between competing physicians about any competitively sensitive information.
• In 1996 the Federal Trade Commission sued the Montana Associated Physicians, Inc. and obtained an order preventing it from negotiating or refusing to deal with third-party payors; determining the terms upon which physicians deal with such payors; or raising, maintaining, or adjusting the fees charged for any physician’s services.
• AMA was reminded of the risks in 1990 when chiropractic prevailed in protracted and very expensive litigation. The court ruled that AMA had led an unlawful boycott of chiropractors and that AMA’s conduct could not be justified by patient-care concerns. The court ordered AMA to take specific steps so that physicians could freely decide whether to have professional relationships with chiropractors.

Guidelines:

New Mexico Ophthalmological Society members compete with one another in providing quality care to the public.[1] As competitors, there are certain types of agreements that NMOS members cannot lawfully make.

Members must not make any agreement to fix, raise, or stabilize prices or fees (or any element of prices or fees) or restrict services that a member can offer. Example: Dr. Ford and Dr. Callahan, who practice in the same community, run into one another at a social hour sponsored by a pharmaceutical company. After they discuss some recent developments in refractive surgery, their conversation turns to the rates that they charge LASIK patients. Dr. Ford says that he would like to raise his rates for such patients, but he needs to know what Dr. Callahan would do. Dr. Callahan says that it is “a great idea whose time has come.” Two weeks later, Dr. Ford raises his rates. The following week, Dr. Callahan likewise raises his rates.

§ Problem: From these facts a jury might conclude that the two members made an agreement to fix prices, which would be a clear violation of the antitrust laws. Although a price-fixing agreement is illegal whether or not it is effective, here the fact that one doctor specifically “needed” to know how the other would respond would probably make it easier to demonstrate that an illegal agreement had been made.

o Example: Dr. Freeport has decided to offer free screening for seniors in nursing homes. At the local Society meeting, several members sponsor a resolution condemning the practice of free screenings under penalty of expulsion or disciplinary action.

Problem: This resolution, if adopted, would constitute an illegal agreement to restrict service.

Members must not make any agreement to allocate or divide geographic or service markets, customers, or patients.
o Example: Dr. Harris and Dr. Wesley see one another at a lecture program at the medical school. Dr. Harris mentions that over the last several months, two patients have stopped seeing him and have gone to Dr. Wesley instead. Dr. Wesley says that he understands Dr. Harris’s point, and that he will not accept as new patients anyone who was seeing Dr. Harris, and that he knows Dr. Harris will extend the same courtesy, should it ever be needed.

· Problem: In addition to the ethical issues that this raises, it also appears to be an agreement to refrain from competing for patients – and thus a violation of the antitrust laws.

Members must not make any agreement to collectively refuse (or encourage others to refuse) to do business with a provider, a third-party payor, managed care organization, a supplier, a purchaser, a patient, or any groups of such persons or companies.

o Example: An insurance company announces that it will no longer pay for a certain procedure. The issue comes up at a meeting of the local Society, and during the cocktail hour several leading members announce that they will not accept patients whose coverage is provided by that insurance company. Others in the group say that this is a great idea, and they support it.

§ Problem: These members appear to have agreed to refuse to deal with the insurance company (and its patients). Although each member had the right to make a unilateral decision not to accept such patients, the collective agreement is a per se violation of the antitrust laws.

Members must not make any agreement to discourage entry into or competition in any segment of the health care market.

o Example: Dr. Greene and Dr. Waugh are busy LASIK surgeons in competing practices. In response to what they perceive to be improper demands from referring optometrists, Drs. Greene and Waugh agree that in the future they will not commonage with any optometrists.

§ Problem: Drs. Greene and Waugh have made an illegal agreement to refuse to deal with the optometrists. (Note that the problem here is the agreement – any individual member and any practice group can make unilateral decisions as for the conduct of their own practice, so long as they do not make an agreement with members outside their own practice group.)

· Members must not make any agreement to restrict, limit, or prohibit truthful advertising.

An “agreement” does not have to be formal or written in order to be unlawful; it does not even have to be explicit. In fact, what often matters is not whether there actually is an agreement, but whether others might perceive that there is an agreement based on what they see (or think they see). For this reason, NMOS members should avoid ambiguous situations. For example:

· Members should use caution in discussing whether the practices of a particular member or other person (that is, an actual or potential competitor) are “unethical” or “anticompetitive” – this might be perceived as an attempt to unlawfully exclude someone from providing health care services.

· Members should also be cautious in any group discussions about the safety, quality or efficacy of the products or services of other health care providers. This does not mean that members should avoid reasonable discussion and assessment of the safety or efficacy of technology, drugs, and devices – but the discussion should not sound like members will collectively refuse to refer business.

· Members should not discuss the benefits of jointly withholding business from some firm or group of people, or discouraging others from doing business with one or more people. This, too, can very easily be misconstrued as a group boycott.

All NMOS meetings should be conducted in a manner consistent with these guidelines. Moreover, care should be taken to be able to demonstrate that members followed these guidelines in their meetings. For example, all meetings should follow written outlines or an agenda, and minutes should be prepared and preserved. Except for matters protected by the attorney-client privilege, all discussions conducted and all decisions reached at those meetings should be reflected in the minutes of those meetings. NMOS representatives to other organizations should take reasonable steps to ensure that such organizations follow the same practice.

Statements made by individuals apparently acting on behalf of the NMOS are particularly dangerous. Such statements (e.g., issuing any statement on NMOS letterhead or speaking at a conference without stating that the views expressed are solely your own) may be construed as demonstrating an unlawful agreement when in fact no agreement exists at all. NMOS members should particularly refrain from statements suggesting they have agreed not to not to deal with a particular group of suppliers or competitors.

The antitrust laws do not prohibit the NMOS or its members from asking the legislature or other governmental bodies to establish rules affecting the profession, even if those rules when adopted may have some effects on competition – because petitioning the government is one of our fundamental rights and duties as citizens. But just because citizens can ask the government for something does not mean that they can “jump the gun” by agreeing to adopt the requested measure among themselves before the government acts. NMOS members should be careful to ensure that their discussions do not look like a prohibited form of private agreement. NMOS members should not use the NMOS name in connection with collective political action unless it has been approved by the NMOS Board or an appropriate Board committee.

NMOS members are strongly encouraged to consult with competent antitrust counsel before undertaking any collective activity that might have competitive implications. NMOS members, especially those in leadership positions, may also benefit from attending antitrust compliance programs.

[1] A contract, combination, or conspiracy can exist only if there are two or more separate economic entities acting together. Two ophthalmologists with competing, independent practices would each be considered a separate economic entity for this purpose. Those same two ophthalmologists, practicing together in one partnership or professional corporation, would be considered just one economic entity for this purpose. Thus, the two independent ophthalmologists could not agree with each other to fix their fees at specified levels for certain procedures, but the two ophthalmologists in partnership could agree on the prices that their partnership will charge, but they could not make any agreements with a third, independent ophthalmologist.

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