Professional Association Boycotts: Primer for a Frustrated
Member
In October 2002, then-ASA President Barry
M. Glazer, M.D., sent an e-mail to about 19,000 ASA
members, urging them to contact their Senators in
an effort to head off a projected 4.4-percent cut
in the Medicare conversion factor on January 1, 2003.
A significant number of members responded positively
to that request, but a few took the occasion to castigate
ASA for its failure to effect large-scale changes
in Medicare reimbursement levels. The following e-mail,
from which expletives have been deleted, was representative:
| “OK, so they are cutting us 4.4
percent, that is about 60 cents a unit, or 2.40
per hour. Why do we fight for these pennies?
Isn’t it time that we did something a
little more active? I for one am sick of writing
letters for pennies. How about no more services
for Medicare? That would get someone’s
attention. Even just calling for a specialty-wide
boycott would get attention. Anything is better
than getting bled to death. Why do we not see
some leadership from our leadership? Aren’t
you ashamed of where our letter writing has
gotten us?” |
The writer is, of course, absolutely correct: an ASA-led,
specialty-wide boycott
would get someone’s
attention. The problem is, however, that the very
first attentive observer would undoubtedly be the
Federal Trade Commission FTC), which is charged by
law with enforcing federal antitrust laws along with
the Justice Department. Among those activities condemned
by the antitrust laws, normally without inquiry as
to intended purpose or effect, are combinations or
conspiracies to fix prices or to boycott others in
pursuit of economic interests.
We have known since the 1940s that anticompetitive
activities by professional associations — as
distinct from business entities — were vulnerable
to antitrust action. It was not until 1974, however,
that the U.S. Supreme Court spoke on the issue when
it struck down a price-fixing scheme maintained by
an association of northern Virginia real estate dealers.
From that time on, legal advisers to professional
associations have cautioned their clients against
activities that, in the commercial world, would be
deemed illegal from an antitrust perspective.
ASA, having itself been involved in three antitrust-related
proceedings, is no less sensitive to these cautions
than any other associations of competitors or potential
competitors. The first of these was the lawsuit in
the late 1970s by the Justice Department against ASA,
alleging without inquiry as to purpose or effect that
ASA’s Relative Value Guide (RVG) represented
price-fixing that was illegal under antitrust laws.
ASA won that case in 1979, essentially by convincing
the court that the guide had been developed at the
request of third-party payers, that it contained abstract
relative values and no conversion factor was recommended,
that there were other guides in use by physicians
and insurers and that no ASA member was compelled
or even urged by ASA to use the RVG.
The Society’s second encounter, this time with
the FTC involved a requirement contained in ASA’s
“Guidelines for the Ethical Practice of Anesthesiology”
(which is binding on ASA members) that anesthesiologists
should be compensated only on a fee-for-service basis
and should not practice as a salaried employee of
a hospital. In essence, it was alleged that this provision
limited the ability of hospitals to negotiate freely
and conclude contracts with ASA members, thereby restraining
competition among anesthesiologists and depriving
consumers of the benefits of competition. After negotiating
its terms with the FTC, ASA entered into a 1979 consent
order requiring it to cease restraining anesthesiologists
from practicing other than on a fee-for-service basis
and from conditioning ASA membership on fee-for-service
practice.
Finally, at about the same time, the FTC — undoubtedly
at the initiative of nurse anesthetist interests —
opened a nonpublic investigation to determine whether
ASA had conspired with its members and others to bring
about the closing of nurse anesthesia schools. Documents
produced by ASA in response to the FTC’s discovery
request contained no evidence of such a conspiracy
(because none existed), and in time, the agency closed
its investigation without taking any action.
The common ingredient of these incidents, one involving
alleged price-fixing and two alleged boycott activities,
was the fact that they were predicated on the foundation
that ASA is an association of competitors or potential
competitors not economically linked to one another.
Thus, ASA represents by definition a conspiracy which,
through joint action of it and its members, could
engage in activities potentially in violation of the
antitrust laws. In 1982, the Supreme Court struck
down an agreement among physicians, under the aegis
of a county medical association, to fix the maximum
prices at which they would sell their service. In
1983, the FTC ordered a state medical association
to cease orchestrating the departicipation of its
members (read: boycott) from a third-party payer plan.
In short, any activity by ASA to encourage its members
to drop out of the Medicare program or to change from
participatory to nonparticipatory status is laden
with antitrust peril and cannot be expected to occur,
no matter how frustrated or angry some of ASA’s
members may be. What ASA
can do legally is
to point out, without recommendation, the options
available to individual members or economically integrated
groups of members with respect to the Medicare program.
One such initiative is contained in the October 31,
2002
President’s Update by James E.
Cottrell, M.D., urging ASA members to postpone their
respective decisions on Medicare participation until
all the facts are known about 2003 Medicare reimbursement
levels.
What ASA also can do legally and does do mainly through
its Washington Office is to lobby or, constitutionally
speaking, “petition the government for redress
of grievances” for improvement in Medicare legislation
and regulations. This right of free speech or association,
however anticompetitive the message may be, is protected
by the judicially recognized “Noerr-Pennington”
doctrine recognizing that constitutional activity
trumps the legislatively created antitrust laws. For
example, although some might argue that ASA’s
defense of the Medicare supervision rule could have
anticompetitive purpose or effect, ASA and its members
had a constitutional right to express their views
on the subject to Congress and the Centers for Medicare
& Medicaid Services.
Some ASA members may well believe that the ASA leadership
and the Washington Office have done a rotten job of
advocacy on their behalf, of which we should, as our
e-mail writer put it, “be ashamed.” Since
I have a vested interest in the answer to this question,
I am not really in a credible position to comment,
but I would like to offer one thought in closing.
The fact is that the demand and expected demand for
medical services far outstrips the willingness of
our citizens, through the government or otherwise,
to pay for them. If you were a politician or a regulator
who was responsible to politicians, what would you
prefer to do: 1) Ask those citizens who elected you
to pay more, 2) Seek by whatever opportunity possible
to restrain the costs either by enforcing competition
or by imposing regulation, or both? Your answer may
help you to measure the level of the ASA leadership’s
inability to do more.
Medicare
CFs Not Published
Traditionally, the December issue contains
a chart of anesthesia conversion factors
by Medicare payment area for the upcoming
year. As of press time, however, this
data for 2003 had not been published by
the Centers for Medicare and Medicaid
Services. When published, it will be promptly
placed on ASA’s Web site, and a
notifying e-mail will be sent to all members
for whom the Society has electronic addresses. |
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