An Interview with Norman W. Hawker On Anti-Trust Issues

Professor Norman W. Hawker

Disclaimer: The views expressed by Professor Hawker in this interview are general comments and not to be considered legal advice. For specific legal questions one is advised to consult their own attorney.

Professor Hawker is interviewed by Dr. John Riolo

 

Questions and Answers:

Riolo: All our experts in this series have stated that violations of ant-trust are serious. However despite the cautions from experts some mental health practitioners have proclaimed that the risks are minimal and an “almost non-existent danger” or little more than a traffic violation if caught. Some laugh and call me an alarmist for raising these issues. Is there any thing you can say to mental health practitioners that would persuade them that ant-trust laws are something other than non existent dangers? Are there any specific cases involving mental health practitioners or the internet? 

Hawker: I can't give you legal advice, you need to consult your attorney for that, but I don't think you're an alarmist. An agreement between two or more competitors as to the prices they will charge or the terms on which they will do business is a felony under Section 1 of the Sherman Act as well as a violation of Section 5 of the Federal Trade Commission Act. Sometimes the government chooses to seek civil fines and injunctions instead of criminal penalties, but there are people in jail today for violating the antitrust laws.

I am not aware of a case that deals specifically with mental health practitioners, but antitrust laws do apply to medical and other professionals. For example, the Federal Trade Commission successfully prosecuted a group of trial lawyers in Washington, D.C., who agreed to stop doing court appointed work in an effort to force the courts to pay them higher fees in FTC v. Superior Court Trial Lawyers Assn.

Riolo: It is fairly clear from our experts that nonaffiliated providers cannot attempt to boycott managed care companies. However as Bryant Welch, one of our guests, said, “… our frustration with MCOs that often can get us in trouble” . Could you comment on calls for boycotts which seem to occur whenever some MCO announces a rate reduction? I am not sure that the rationale as to why such activity is illegal or harmful to the public has ever been made clear to mental health providers by their trade associations in a way they can understand. Could you attempt to provide some rationale?

Hawker: Again, I can't give you legal advice, but the situation sounds similar to the case of FTC v. Indiana Federation of Dentists, where the Federal Trade Commission successfully prosecuted a group of dentists who agreed to withhold certain records from their patients' insurance companies.

Congress enacted the antitrust laws to promote competition. Among other things, competition results in lower prices. In a competitive market, a mental health practitioner would lower fees in order to attract consumers away from his or her competitors. MCOs, not clients or patients, are the consumers in this market. 

What I can't help but wonder, and please understand that I am only speculating here, is whether your colleagues are victims of too little competition among MCOs. If so, the answer, as the dentists and trial lawyers found out, is NOT to enter into some sort of boycott, but rather to seek enforcement of the antitrust laws against the MCOs. Antitrust laws are enforced by the Antitrust Division of the Department of Justice and the Federal Trade Commission. State Attorneys General also have the power to enforce the antitrust laws. Finally, private parties can file lawsuits to enforce the antitrust laws on their own. If the private lawsuit is successful, the remedies include payment of treble damages.

Riolo: Concept of Agency- These discussions occur on internet listservs and discussion groups sponsored by Yahoo, MSN and other internet servers. In their “Terms of Use” Yahoo for example has a policy about intentionally or unintentionally violating any applicable local, state, national or international law. However if they do not enforce such provisions could they be held responsible? Or is merely making a disclaimer sufficient to protect them? What about the list owners and moderators who condone such behavior? Is a list owner who encourages such behavior responsible legally for the acts of their list members?

Hawker: I don't know the answers to these questions.

Riolo: Your candor is refreshing. Too often in the mental health field someone may be asked a question to which they have no informed answer. However not knowing what we are taking about has not always stopped some of us from expounding on a subject as if we were the final word. 

The next couple of questions relate to fee surveys both provider generated and those conducted by independent parties. When I interviewed an attorney from the DOJ he mentioned the guidelines that the FTC/DOJ put our regarding STATEMENT OF DEPARTMENT OF JUSTICE AND FEDERAL TRADE COMMISSION ENFORCEMENT POLICY ON PROVIDER PARTICIPATION IN EXCHANGES OF PRICE AND COST INFORMATION See http://www.usdoj.gov/atr/public/guidelines/0000.htm#CONTNUM_49

As I read these guidelines it reads as if all three conditions mentioned are required in order to be considered inside the safety zone. Is that correct? 

Also, what about provider generated fee surveys on internet discussion groups? Would you care to comment on whether they fall within the guidelines and what if any risks those conducting the survey are taking?

Hawker: These are exactly the type of question that should only be answered by your attorney. 

Riolo: I understand that those questions might require specific legal advice. Therefore I would assume and hope that anyone considering conducting a fee survey would obtain legal consultation before and not after the fact.

Summary ( by J.Riolo):

Professor Hawker, I want to thank you once again for taking the time to share your thoughts on these difficult and complex matters. It is my hope that this series will provide mental health practitioners with a better understanding of antitrust laws and how they are designed to protect the public. Also, it is my hope that consumers though a better understanding of antitrust laws can assure that the fees they pay for mental health treatment are based on fair competition and not anti-competitive behavior.

As I try to synthesize your comments I conclude the following:

Anti-trust laws are serious and it is not advisable for anyone including solo mental health practitioners to treat them as minor infractions or dismiss them as non existent dangers.

Rather than risking being involved in anti-trust behaviors with its civil and criminal penalties in our dealings with managed care companies, mental health practitioners might want to explore using the antitrust laws against the MCOs wherever possible.

And, obtaining legal advice is essential when in doubt. Failure to do so can be costly.

Norman W. Hawker is a Senior Research Fellow with the American Antitrust Institute and an Associate Professor in the Haworth College of Business at Western Michigan University. A lawyer with experience in private practice and as an Assistant Attorney General in Michigan, Professor Hawker earned his business and law degrees from the University of Michigan. 

The American Antitrust Institute is an independent Washington-based non-profit education, research, and advocacy organization. Our mission is to increase the role of competition, assure that competition works in the interests of consumers, and challenge abuses of concentrated economic power in the American and world economy. We are, broadly, post-Chicago centrists dedicated to the vigorous use of antitrust as a vital component of national and international competition policy.