Dangers of a Messenger Model IPA

The dangers of a messenger model IPA were demonstrated as the FTC settled charges with a 600-physician IPA over its use of a "messenger model".
The dangers of a messenger model IPA were highlighted when the FTC today announced that it has entered into a consent agreement with Alta Bates Medical Group, Inc., a 600-physician multi-specialty IPA serving Berkeley and Oakland, California, to settle charges that Alta Bates fixed prices charged to health care insurers and refused to deal with insurers on other than a collective basis.  According to the FTC, the IPA did not employ a lawful messenger model, but instead collectively negotiated on behalf of its physicians (1) by making proposals and counter-proposals, as well as rejecting or accepting offers, without consulting with its individual physician members regarding the prices they unilaterally would accept; and (2) without transmitting the payors’ offers to its individual physicians until Alta Bates had approved the negotiated prices. 
In addition, the complaint alleged that Alta Bates engaged in a concerted refusal to deal to impede competition with Permanente Medical Group by refusing to serve Kaiser fee-for-service enrollees. 
This action shows that the dangers of a messenger model can outweigh its potential usefulness as a vehicle to integrate physicians.
  
Materials regarding this consent are available at http://www.ftc.gov/os/caselist/0510260/index.shtm
You may also be interested in my posts about physician-only CINs and alliances between physician payers.
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Dennis Hursh

Dennis Hursh

Dennis Hursh has been providing healthcare legal services in Pennsylvania since 1982. Since 1992, he has been a physician's lawyer serving as Managing Partner of Physician Agreements Health Law, the first law firm in the country to focus exclusively on physician employment agreements. Dennis has devoted his life to serving physicians and medical practices. He is the author of the definitive book on physician contracts "The Final Hurdle - a Physician's Guide to Negotiating a Fair Employment Agreement, and a frequent lecturer on physician employment agreements.

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