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The Aftermath of Maricopa

Published online by Cambridge University Press:  27 April 2021

Harry Philip Cohen  and
Linda V. Tiano
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Extract

An individual practice association (IPA) is a corporation or a partnership composed of physicians which contracts with health maintenance organizations (HMOs) to provide medical services to HMO subscribers. Since physicians typically practice independently, any agreement or arrangement among them may be perceived as an agreement of competitors. Hence, IPAs run the risk of challenge under the antitrust laws for activities such as price-fixing and the exclusion of physicians from membership.

Prior to the recent Supreme Court decision in Arizona v. Maricopa County Medical Society, it appeared that courts were willing to consider a variety of factors that distinguished antitrust cases concerning health care providers from antitrust cases in the commercial marketplace, and to find that conduct by providers did not constitute antitrust offenses. Indeed, an earlier article appearing in Law, Medicine & Health Care analyzed the lower court's decision in Maricopa and discussed the development of this trend.

Type
Article
Information
Law, Medicine and Healthcare , Volume 10 , Issue 4 , December 1982 , pp. 248 - 253
Copyright
Copyright © American Society of Law, Medicine and Ethics 1982

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References

Arizona v. Maricopa County Medical Soc'y, 102 S. Ct. 2466 (1982) [hereinafter referred to as Maricopa].Google Scholar
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While it may initially appear that an agreement between an HMO and an IPA would not be an agreement between competitors subject to challenge under the antitrust laws, recent decisions suggest that a court may ignore the existence of the IPA as a separate entity, and determine that the IPA is simply a group of competitors. In these cases, courts held that where a cooperative marketing entity, or a manufacturer, if substantially controlled by its members or licensees, imposes price restraints on such members or licensees, the underlying agreement is viewed as price-fixing by competitors. United States v. Sealy, Inc., 388 U.S. 350 (1967); United States v. Serta Assocs., Inc., 296 F. Supp. 1121 (N.D. Ill. 1968), aff'd, 393 U.S. 534 (1969). Under this analysis, the agreement between an HMO and an IPA may be viewed, not as an agreement between two non-competing entities, but as an agreement between a single entity and a group of competing providers. Hence, an exclusive dealing arrangement could be construed as a boycott. This possibility increases if the IPA controls the HMO.Google Scholar
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