A Medical Device Daily

The U.S. Department of Justice reported reaching a settlement with the Federation of Physicians and Dentists (Federation; Tallahassee, Florida) and one of its employees that would prevent the federation from coordinating members' negotiations for fees and terms that resulted in increased fees among Cincinnati-area ob-gyns.

The DoJ said that the settlement resolves its antitrust concerns and ensures that ob-gyn patients receive the benefits of competition for their healthcare needs.

On June 24, 2005, the DoJ filed the lawsuit in U.S. District Court in Cincinnati against the Federation, one of its employees and three physicians, alleging that their actions caused Cincinnati-area healthcare insurers to raise fees paid to the federation's ob-gyn members above the levels that the ob-gyns likely would have obtained if they had negotiated competitively with those insurers. The three physicians — Michael Karram, MD, Warren Metherd, MD, and James Wendel, MD — settled the charges against them at the time the complaint was filed.

This proposed settlement — still subject to court approval — would resolve the lawsuit against the federation and its employee, Lynda Odenkirk.

The DoJ's complaint alleged that the federation unlawfully coordinated its approximately 120 Cincinnati-area ob-gyn member physicians, who constitute a large percentage of Cincinnati-area ob-gyns, to negotiate or renegotiate higher fees in their contracts with Cincinnati-area healthcare insurers. The federation, with assistance from the physicians named in the original lawsuit, allegedly helped implement its members' concerted demands to insurers for higher fees and more favorable related terms, demands which were accompanied by threats of contract terminations.

The settlement prohibits the federation and Odenkirk from, among other things, being involved anywhere in the country in negotiating or contracting with payers for healthcare services provided by the federation's private-practice members.

"This settlement confirms the Antitrust Division's determination to stop illegal conduct that harms the public by increasing the prices that consumers and their employers pay for healthcare," said Thomas Barnett, assistant attorney general in charge of the DoJ's Antitrust Division.