Similar to prior actions it has taken against independent physicians, the Federal Trade Commission (FTC) recently settled a matter against a group of Colorado physicians after alleging that the physicians violated Section 5 of the FTC Act by coordinating agreements among its members to set higher prices for medical services and refusing to deal with insurers that didn't meet its demands. In the Matter of Roaring Fork Valley Physicians I.P.A., Inc., FTC, File No. 061 0172 (Feb. 3, 2010).

Roaring Fork Valley Physicians I.P.A., Inc., which represented about 80 percent of the doctors in Garfield County, Colorado, allegedly demanded that contracts with insurers include a cost-of-living adjustment that automatically raised reimbursement rates every year and banned a provision linking reimbursement to Medicare rates. Additionally, the group allegedly discouraged its members from entering into individual contracts directly with insurers in order to enhance the independent practice association's (IPA) bargaining power while accepting contracts only if at least 80 percent of the IPA's primary care physicians and 50 percent of its specialty doctors accepted the proposed contracts.

Notably, the FTC believed that the agreements raised the cost of physician services in Garfield County, without making the doctors' practices more efficient in any way or improving the quality of care that patients received.

The proposed settlement follows a long line of settlements involving improper bargaining by otherwise independent physicians. There is a wide gap between these settlements and the few rulings that have permitted collective bargaining because independent entities are clinically integrated. With or without comprehensive healthcare reform, payment models are changing to facilitate accountable care organizations, medical homes and other types of global billing arrangements. For these to work with both employed and independent physicians, changes to antitrust and fraud and abuse laws will be needed so that delivery systems can develop.