Wednesday, September 24, 2003

Antitrust News: Climbing the Mountain

On Tuesday afternoon, I filed a motion with the U.S. district court overseeing the Justice Department "settlement" with the now-defunct Mountain Health Care (MHC). The motion asked for permission to add me as a party to the case so I can appeal part of the district judge's order signing off on the settlement. That part deals with whether the DOJ disclosed all of the documents they were legally required to. For more than six months now, I've argued to the court that the DOJ intentionally withheld material information about MHC's operations and activities. At every turn, the DOJ has resisted calls to release even basic information about their investigation of MHC--an investigation that led to a coerced "settlement" that forced MHC to dissolve before the court even had an opportunity to examine the government's case.

MHC is part of the Bush administration's ongoing campaign to eliminate the free market for physician services. For nearly a decade, MHC was a physician-owned healthcare network that provided reliable service to customers in western North Carolina. Managed care groups, i.e. HMOs, were unhappy with MHC's popularity in the marketplace. So they whined to the DOJ, which launched a two-year investigation of MHC in a scavenger hunt for "antitrust" violations. The result was a broad charge that MHC engaged in illegal "price fixing" by maintaining a voluntary fee schedule that all member physicians adhered to in dealing with managed care payors.

This fee schedule may or may not exist. The DOJ won't disclose it, and my discussions with MHC officials indicate there was never any mandatory price list--individual physicians were free to set their own prices for many services--and that MHC was complying with all DOJ antitrust requirements in their operations.

The DOJ says MHC's very existence raise prices for physician services above "competitive" levels. Yet the DOJ never explains how the "competitive" price level for the market is determined, or even how far above this level MHC's alleged fee schedule was. When this issue was raised by me during the public comment period, the DOJ arrogantly asserted that I had no knowledge of the market and was motivated solely by ideological opposition to antitrust. While they're correct about my ideology, it's irrelevant to whether the DOJ disclosed required documents related to the settlement. The point of the statutory process is to allow the public opportunity to analyze whether a proposed antitrust settlement will remedy allegedly anticompetitive actions. How can one determine the effects of a settlement, however, if one is not told the precise nature of the problem being remedied?

The law requires the DOJ disclose any document that was "determinative" in formulating a proposed settlement. In almost every antitrust settlement that's been subject to review, however, the DOJ claims there are no "determinative" documents. The DOJ admits they take a very narrow view of the disclosure requirement. They argue that if they were forced to disclose documents such as the ones I describe, it would bring the entire antitrust settlement process to a halt. The DOJ claims it's an unreasonable hardship to expect the Government to actually prove what it's saying is true. But in this case at least, I only asked the DOJ to disclose documents that were already in their possession. If the line between settling a case and costly litigation is the inability to make photocopies, then we're dealing with a DOJ that's lazy as well as morally corrupt.

This, then, is what my appeal to the U.S. Court of Appeals for the Fourth Circuit will focus on. I won't seek to overturn the actual judgment--after all, MHC is out of business--but I will seek a definite answer from the courts on what exactly the scope of "determinative" is under the law. There is precious little case law on this question, largely because no organization or individual has taken up the cause of fighting antitrust on a consistent, principled basis. Since I'm the resident Village Idiot, I might as well be the trailblazer.

Incidentally, I'm laying out my own money to fight this appeal, so a donation to CAC to defray my costs would be much appreciated right now. Considering the number of people who allegedly give money to self-absorbed bloggers (I'm looking in your direction, Mr. Sullivan), I'm hoping a few people can spare a buck or two to fight for the principles we presumably share.

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