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Justice Negotiates Antitrust Deal With Cincinnati Ob-Gyns

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Federal officials are attacking what they say was an illegal effort by 120 Cincinnati-area obstetrician-gynecologists to work together to increase managed care payment rates.

Officials in the antitrust division at the U.S. Department of Justice have negotiated a proposed final judgment that could resolve the physician side of a civil suit they filed in June in the U.S. District Court in Cincinnati.

Although physicians can share a “messenger service” when communicating with provider networks about contract terms, the Federation of Physicians and Dentists, Tallahassee, Fla., played an illegally active role in efforts to coordinate negotiations for Cincinnati-area ob-gyns starting in 2002, the government says in its complaint.

The coordination effort forced 3 managed care companies to increase fees paid to obstetrician-gynecologists by about 60% to 75% over a 3-year period, and it led other carriers to raise their rates, the government says. Affected carriers, according to the government, include Aetna Inc., Hartford; Anthem Inc., Indianapolis; CIGNA Corp., Philadelphia; Humana Inc., Louisville, Ky.; Medical Mutual of Ohio, Cleveland; and UnitedHealth Group Inc., Minnetonka, Minn.

The proposed judgment would prohibit the 3 ob-gyns named as defendants==Drs. Michael Karram, Warren Metherd and James Wendel==from using the physician federation, which is an AFL-CIO affiliate, for any payer contract consulting or negotiating services. The proposed judgment also would prohibit the settling physicians from communicating with any competing physician concerning payer contract terms.

The ob-gyns and most of the managed care companies did not return telephone calls. A spokesman for CIGNA declined to comment, and a spokeswoman for Aetna says her company is still reviewing the case.

Jack Seddon, executive director of the Federation of Physicians and Dentists, which has denied the government’s allegations, says the Ohio suit is “just a typical Department of Justice move on physicians.” The federation merely offered union members individual contract reviews, and it played a role similar to that of a small-town lawyer who happens to represent many local physicians, Seddon says.

The real villain in the case is skyrocketing malpractice insurance costs, which have forced many gynecologists either to give up delivering babies or to retire altogether, Seddon says.


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