Monday, December 22, 2003

Capitalism & Law: Mountain Brief Filed

Today I filed my brief with the U.S. Court of Appeals for the Fourth Circuit in United States v. Mountain Health Care. For those of you new to the program, let me recap: Last December the Justice Department forced a group of 1,200 physicians and healthcare providers in North Carolina to disband. The DOJ said the group, Mountain Health Care, illegally adopted a common fee schedule for use in negotiating contracts with managed care purchasers. The DOJ considers any fee schedule illegal because when doctors agree to set their fees in concert, the DOJ claims it harms consumers. The government said Mountain’s fee schedule “artificially” raised prices and denied consumers the “benefits” of competition for physician services. The implication is clear: the government claims physicians have no real right to set their fees. Despite denying any wrongdoing, Mountain agreed to disband because they couldn’t afford the cost of fighting the DOJ.

During the public comment period on this “settlement,” I objected the to the total lack of factual context in the government’s complaint. Basically the DOJ argued Mountain raised prices, but no outside observer knew what those prices were or what the “correct” market prices were, because the DOJ wouldn’t release that information. When challenged, the DOJ said they had no obligation to provide any context, and that asking them to do so would unreasonably impair their ability to promptly settle antitrust cases. The district court overseeing the case couldn’t be bothered to deal with my objections, and the judge rubber stamped the settlement without comment.

Fortunately there’s a provision in the antitrust law that allows malcontents like me to intervene in the proceedings and ask for appellate review. This now brings us to the Fourth Circuit in Richmond. I’ve asked the Court to decide whether the DOJ must disclose Mountain’s allegedly “anticompetitive” fee schedule. Seeing as it’s the sole piece of evidence referred to in the DOJ’s complaint, the public (and the district court) should have a chance to examine it. The antitrust laws require disclosure of any “materials or documents which the United States considered determinative” in an antitrust settlement case. The DOJ always argues that provision doesn’t really mean anything. Now the Fourth Circuit will decide if that’s really the case. The DOJ will file its reply to my brief in January. I can’t wait to see what distortions and lies they come up with.

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