Maine Attorney General Settles Fee-Fixing Case with Maine Health Alliance
The Maine Attorney General's Office has settled State antitrust claims against the Maine Health Alliance, the Office announced in a press release late last week. The State alleged that the Alliance and its members entered into impermissible collective pricing agreements and refused to deal with health care purchasers except on collectively agreed terms.
The Alliance had done its health plan contracting under what it believed to be legally permissible and common practices and to the extent the settlement changes what had previously been understood by health lawyers as acceptable practices, it could have a very significant impact on all providers in Maine. As soon as more details are released, MMA will provide more direction and information to its members.
The Alliance is a network of eleven hospitals and approximately 325 physicians in five northern and eastern counties. It contracts with health insurers and self-funded employers to provide health services to their enrollees. It is one of the largest Physician-Hospital Organizations (PHO's) in the State.
The State alleged that the Alliance's joint contracting activities resulted in higher fees that the Alliance's physician and hospital members would otherwise have been able to negotiate, causing purchasers of health care services to pay more for health care. The settlement, which has been approved by the Superior Court, contains an order designed to prevent recurrence of the concerted actions that the State believes violated antitrust laws.
While some collective actions are permissible where the joint activities of the providers have a real potential to increase quality of care and reduce cost, and where the joint contracting appears reasonably necessary for the achievement of those benefits to patients and consumers, the state concluded that the Alliance activities did not meet the necessary legal threshold. The state did, however, acknowledge that the Alliance had some commendable programs in place aimed at increasing quality of care, but went on to state that these programs did not require joint pricing to be successful. The State also alleged that the Alliance and its members collectively agreed not to deal with payors except through the Alliance.
The Federal Trade Commission has reached a similar agreement with the Alliance and the lawyers and the staffs of the two agencies worked closely together on the case.
While not directly related to this settlement, recent pronouncements by the antitrust enforcement agencies have led to wide-spread speculation about the future also of the so-called "messenger model" of contracting. It is now apparent that the authorities have begun interpreting the model differently than in the past and this change could also have enormous implications for provider contracting in Maine. We will continue to bring to the attention of MMA members and staffs the latest thoughts on this important topic, both in this e-mail weekly publication and in the printed monthly version of Maine Medicine.
The Maine Health Alliance was established in 1995 Members include St. Joseph Hospital in Bangor and hospitals in Calais, Caribou, Machias, Houlton, Dover-Foxcroft, Millinocket, Bar Harbor, Fort Kent, Lincoln and Ellsworth. [return to top]