By Lindsey Dunn | February 08, 2010

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Tags: FTC | price fixing | settlement

A Colorado physicians' group has settled allegations by the Federal Trade Commission that the group participated in price-fixing, according to a news release by the FTC.

Roaring Fork Valley Physicians, which represents about 80 percent of physicians in Garfield County, Colo., allegedly violated the FTC Act by orchestrating agreements among its members to set higher prices for medical services and to refuse to deal with insurers that did not meet its demands for higher rates, according to the report.

The FTC alleges that between 2003 and 2006 the group's physicians used the agreements to demand that contracts with insurers include a cost-of-living adjustment that automatically raised reimbursement rates every year. The group's physicians also allegedly used the agreements to ban a cost-lowering provision commonly used by insurers that links reimbursement rates to Medicare rates. The group also allegedly discouraged its members from entering into individual contracts directly with insurers, the FTC charged, in order to enhance the bargaining power of the IPA. At the same time, Roaring Fork would accept contracts only if at least 80 percent of its primary care physicians and 50 percent of its specialty doctors accepted the proposed contracts.

According to the agency, 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 FTC settlement bars Roaring Fork doctors group from engaging in collective price negotiations and collectively refusing to deal with insurers. In addition, the group must:

• Terminate any contracts with insurers that were reached using price-fixing tactics;
• Notify the FTC before acting as an agent communicating contract offers and counter-offers between doctors and insurers; and
• Notify the FTC before participating in any collaborative arrangement with doctors and allow the agency to review and approve the details before implementing any such arrangement.

Read the FTC's release on Roaring Fork Valley Physicians.