1. Home
  2. |Insights
  3. |Federation of Physicians and Dentists Consents to Judgment in Delaware Sherman Act Case

Federation of Physicians and Dentists Consents to Judgment in Delaware Sherman Act Case

Client Alert | 1 min read | 10.23.01

On October 22, 2001, the Department of Justice submitted a proposed final judgment settling its antitrust suit against the Federation of Physicians and Dentists. The Government had alleged that the Federation violated the Sherman Act by coordinating and negotiating third party payer contract pricing on behalf of member orthopedic surgeons in Delaware. CA 98-475 D.Del.

The Federation and its member physicians allegedly coordinated a response to attempts by Delaware insurance payers to bring physician fees in line with those paid in neighboring regions. According tot he Government, this coordination included agreements by the physicians to deal with payers exclusively through the Federation and concerted efforts to resist negotiation with payers, eventually leading to the cancellation of service contracts by many member physicians.

The Final Judgment requires the Federation to limit its dealings with payers nationally on behalf of member physicians to true "messenger model" activity: communicating factual information about proposed payer contracts to individual physicians. The Federation and its member physicians may not facilitate agreements designed to set uniform contract provisions or fees; nor may they facilitate the sharing of competitively sensitive information between competing physicians. For the first five years following the Judgment, the Federation must notify physicians and insurance payers that 1) they are permitted to bargain without using the Federation as a messenger and 2) it is prohibited from negotiating contracts on behalf of physicians. The Judgment contains provisions protecting both the Federation's activities organizing employee physicians and the bargaining practices of physicians belonging to bona fide risk sharing arrangements.

Crowell & Moring attorneys have worked on behalf of managed care company clients in a number of states that have encountered questionable activities by the Federation.

Insights

Client Alert | 1 min read | 07.08.26

CAS Board Publishes Final Rule Rescinding CAS 404, 408, 409, and 4117

As part of its ongoing effort to conform the Cost Accounting Standards (“CAS”) to generally accepted accounting principles (“GAAP”), the CAS Board published a final rule rescinding CAS 408 (Accounting for costs of compensated personal absence) and CAS 411 (Accounting for acquisition costs of material).  The CAS Board also rescinded CAS 404 (Capitalization of tangible assets) and CAS 409 (Depreciation of tangible capital assets) but retained certain requirements of CAS 404 and 409, which will be located in new paragraphs of CAS 405 (Accounting for unallowable costs).  Specifically, the CAS Board retained the requirements currently located at CAS 404-50(d)(1), CAS 409-50(e)(5), CAS 409-50(j)(1), and CAS 409-50(j)(4), which the CAS Board explained are necessary to protect the Government’s interests.  Otherwise, the CAS Board determined that the requirements of CAS 404, 408, 409, and 411 overlapped with GAAP such that GAAP “may be applied reasonably as a substitute for CAS to support contract cost and pricing.”...

View All Insights