Dr. Divis Seeks Clarity from WSDA on Antitrust Laws
I believe it would be appropriate for WSDA’s legal counsil to cite the law with specific references to the extent to which dentist may speak to one another and (or) with practice consultants regarding fees and fee structures. In this instance misunderstanding of the law could result in prosecution or alternatively a major change in the practice of dentistry as we know it. I don’t understand how simply speaking about ones fee structure to a college could violate anti-trust law. That sounds like freedom of speech to me, not necsicarily price fixing. Some clarity from our leadership would be appreciated.
-Dr. John R. Divis, DDS
The blog entry of Dr. Divis asks that I clarify the antitrust law rules which could apply when dentists speak with one another, or with practice consultants, concerning fees. Dr. Divis’ central question is:
“I don’t understand how simply speaking about one’s fee structure to a colleague could violate antitrust law. That sound like freedom of speech to me…”
The two potential violations of antitrust law which should concern us are:
1. An agreement between or among competitors which is found to be a conspiracy in restraint of trade; and,
2. If separate competitors act together collectively in refusing to deal with a third party (such as an insurance company), that action may be found to be concerted action by competitors which amounts to a group boycott.
Statutory rules about free trade and fair competition are written in a very few words. But the experience of the law and application of legal doctrine to particular cases usually depends upon the facts and circumstances. For example, an agreement may be found under these statutes based on inferences from conduct or speech which would not amount to a contract in the usual sense.
Dentists and other professionals have the right to post or advertise their fees and prices. This is a recognized exercise of commercial speech rights. With some limitations for ads which are false or potentially misleading in some way, this right has been recognized since the 1970s. It is a logical part of free competition.
So if you post your practice fee schedule in your office window or lobby, or if you provide it to patients in a brochure or advertisement, that is likely to be protected speech.
Restraint of Trade.
The concern arises if, and this depends on the circumstances, there is some aspect of the speech which could support an inference of some agreement among or between competitors to restrain free competition. However it is established or expressed, an agreement between competitors to restrain trade would be regulated as conduct and would not be protected as free speech.
It is the possibility of such an inference, either as to pricing or concerted action, which causes lawyers to advise professionals against direct discussions between competing professionals about their intentions with respect to specific fees to be charged in the future.
Debating the issues and changes which pertain to the dental industry seems to me to be appropriate. Expressing a personal opinion generally should be OK, but I would advise you against urging other dentists to take a particular course of action or to have particular fees or prices.
Independent competitors (which dentists in separate practices in a particular market are) need to make independent decisions about the plans in which to participate and where to set their prices and fees.
In the context of Dr. Divis’ question, I can see the possibility that a discussion of fee information between dentists might be inconsequential. Perhaps they are not competitors. Or, there is no intent to influence each other or to reach any form of agreement. But there is no assurance on this point. Discussions between competing dentists about fee intentions, or about joining forces in opposition to an insurance plan, should be regarded as high risk. Remember that the existence of a possible explanation or defensive argument does not mean the professional is certain to prevail. And in any event where there is a legal challenge, the practitioners are likely to incur large expenses for legal fees (even if they prevail).
Professionals may participate in surveys of information which include historical pricing and similar information. Typically, such surveys are conducted by third parties (such as a consulting or account firm) and the identity of participant data is summarized by category or size, rather than name. The undertaking of such a survey should be taken with care. The survey should be designed to comply with federal guidelines on the subject. For example, such a survey should focus on past events and not ask participants to predict future fees, wages, etc.
Inside Discussion; Consulting.
Note that practitioners within a single integrated practice are of course free to set their fees and business strategies collectively. The professionals within an integrated enterprise are not regarded as competing with each other.
The same reasoning extends to conversations with your practice’s lawyer, accountant, or business consultant. The conversations with non-lawyers are not privileged in the sense of attorney-client privilege. The consultants and accountants are regarded as agents of your practice, not as your competitor.
The antitrust laws are applied based on actual facts and circumstances. There are good reasons to be cautious in any discussion of fees or business structures with your competing professionals.
More information is available. In August, 1996, the Federal Trade Commission and the Department of Justice published “Statements of Antitrust Enforcement Policy in Health Care,” see http://www.justice.gov/atr/public/guidelines/0000.htm.