NU Online News Service, March 12, 12:55 p.m. — Washington

Insurance companies and physicians are squaring off over legislation that could modify antitrust laws and allow physicians to form cooperatives that would jointly negotiate fees and other contract terms with health plans.

The legislation, H.R. 3897, says that efforts by physician cooperatives to negotiate terms on behalf of their members should not be deemed illegal per se, as is currently the case under the Clayton Antitrust Act.

Rather, the legislation says, legality of the arrangement should be judged on the basis of “reasonableness,” considering such factors as patient access to health care, the quality of health care and the proposed contract terms.

The legislation, which was introduced by Reps. Bob Barr, R-Ga., and John Conyers, D-Mich., says the antitrust protection is necessary because of the “concentration and exertion of market and economic power” exercised by health plans using such mechanisms as medical necessity determinations and delaying payments.

The American Medical Association, Chicago, is strongly supporting the legislation.

“When large health plans dominate a market, physicians have little choice but to accept blatantly unfair contract terms that often have important patient care implications,” says Donald J. Palmisano, AMA’s secretary-treasurer.

Health insurers, however, blasted the legislation.

“The American public should be concerned with legislation that would provide physicians with unprecedented authority to essentially for cartels that would reduce competition, increase costs to both public and private health care programs and force consumers to pay more for their health care,” says Donald Young, president of the Health Insurance Association of America, Washington.

Karen Ignagni, president of the American Association of Health Plans, Washington, called the legislation anti-competitive and anti-consumer.

“At a time when health care costs are rising at the fastest rate since 1992, and consumers are struggling to afford the health care they need, it is irresponsible to pursue legislation that would raise their costs heigher and negatively impact the quality of health care,” she says.

Ignagni says that the legislation would allow doctors to set prices while embarking on a series of other activities, including strikes, that could seriously disrupt the quality and availability of care to consumers.