Specialty health care practices outside major metropolitan areas can easily constitute a large share of the relevant geographic market for services they provide, raising antitrust concerns. In Urology of Central Pennsylvania, No. 11-cv-1625, Final Order (M.D. Pa. Sept. 1, 2011), the only five independent urology practices in Harrisburg Pennsylvania merged into a single entity, Urology of Central Pennsylvania, Inc. (UCPA), to provide ancillary services, including radiation therapy for prostate cancer and imaging, to patients in the Harrisburg area. Shortly after the merger, UCPA opened the Prostate Cancer Center (PCC) to provide intensity modulated radiation therapy (IMRT) treatment to patients, one of two most popular radiation treatments for prostate cancer. UCPA then referred the majority of its prostate cancer patients to the PCC.
On August 30, 2011, Pennsylvania’s Attorney General filed a complaint against UCPA alleging the consolidation violated state and federal antitrust law. The Attorney General asserted that the relevant geographic market for urology and radiation oncology services for prostate cancer was the greater Harrisburg Metropolitan Area, which has a twenty mile radius. This was based in part on the older age of the relevant patient population and the fact that the primary treatment for prostate cancer offered at the PCC—IMRT—requires sessions five days a week for eight to nine weeks—both factors that make long distance travel for treatment unlikely. According to the Attorney General, the merger that created UCPA had anti-competitive effects within the relevant geographic market.
UCPA and the Attorney General of Pennsylvania, however, ultimately entered into a consent order that resolved antitrust concerns while acknowledging that that the consolidation may provide patients with important benefits. The consent order permits UCPA to continue as a single entity, to retain control of the PCC, and to continue joint rate negotiation for urology and radiation oncology services. Interestingly, while traditional antitrust remedies would normally include divestiture or at least a requirement that the physicians cease joint rate negotiations, this consent order instead includes a number of “conduct” remedies. These remedies include a provision for “last best offer” arbitration to resolve pricing disputes with health plans, a prohibition on most-favored-nation provisions with health care providers in certain circumstances, and provisions to regulate the UCPA’s referral process. The consent order expires on July 1, 2015, or potentially upon the sale of UCPA, and also includes the standard monitoring provision in the form of an annual compliance report. The consent order in Urology of Central Pennsylvania is a noteworthy development in state enforcement of antitrust law against specialty health care providers in small markets and may serve as a model for future enforcement actions.