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Life Health > Long-Term Care Planning

Justice Department To Settle With Cincinnati Ob-Gyns

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Federal antitrust lawyers are attacking what they say was an illegal effort by Cincinnati-area obstetrician-gynecologists to work together to increase managed care reimbursement rates.[@@]

Officials in the antitrust division at the U.S. Department of Justice have negotiated a proposed final judgment that would prohibit 3 ob-gyns from using the Federation of Physicians and Dentists, Tallahassee, Fla., for any financial, legal, consulting or negotiating service concerning any payer contract or contract term.

The proposed judgment also would prohibit the settling physicians from communicating with any competing physician concerning any payer contract term.

The proposed judgment would not affect the settling physicians’ ability to talk to other physicians about the treatment of specific patients, participate in medical societies or shape public policy.

The Justice Department published a copy of the proposed final judgment and the government’s complaint today in the Federal Register. Members of the public have 60 days to comment on the proposal, which would resolve a civil suit that the Justice Department filed in June in the U.S. District Court in Cincinnati.

Federal antitrust law treats physicians in private practice as service vendors rather than employees, and it prohibits them from joining together to win rate increases from managed care companies.

The Justice Department did agree in 2002 to a consent decree involving the Federation of Physicians and Dentists that allowed the federation to provide a “messenger service” for physicians and dentists wanting to communicate with managed care provider networks, but the consent decree prohibited the federation from giving competing physicians recommendations about provider contract terms.

The government has accused 3 Cincinnati-area ob-gyns of using the Federation of Physicians and Dentists, a union for physicians, to help them and 120 other Cincinnati-area ob-gyns coordinate provider contract negotiations with 6 major managed care companies starting in 2002. That coordination effort forced 3 managed care companies to increase fees paid to obstetrician-gynecologists by about 15% to 20% starting in July 2003, by about 20% to 25% starting in January 2004, and by 25% to 30% starting in January 2005, the government says.

“The settling physician defendants’ and their conspirators’ conduct also caused other insurers to raise the fees they paid to federation member ob-gyns,” the government says in the complaint.

But 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 made no effort to coordinate contract negotiations, Seddon says.

Seddon adds that the federation played a role similar to that of a health care lawyer in a town with only one experienced health care lawyer, who might end up representing most of the physicians in the community.

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.

The Justice Department notice about the proposed final judgment appears on the Web at


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