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While price-fixing is generally prohibited, the government allows competitors to collaborate if it improves patient care. Learn the three permissible mechanisms for joint collaboration. This is the third of seven sections in the Guide to Innovative Practice Models.

The nation's antitrust regulations were originally designed to keep giant oil companies and railroads from becoming monopolies. But the rules also apply to solo practitioners and small practices: Competitors can't negotiate jointly because that would mean price-fixing.

The government recognizes, however, that sometimes joint negotiation is good for consumers. That ability to jointly negotiate contracts is one of the advantages of certain innovative practice models, such as independent practice associations and management services organizations.

There are two basic approaches for joint negotiation that minimize the risk of antitrust problems:

  • Messenger model. With this approach, one person agrees to serve as a conduit for price information between a payer and a network of providers. The process begins with asking providers privately what fee they would be willing to accept for a given service. The messenger finds a optimum price point of $100. The messenger then brings that information to the payer, saying, for example, “If you pay $100, I can offer you a network of 200 providers.” If the payer counters with a lower number, the messenger simply consults the list of providers to see how many would be willing to accept that lower rate. The messenger can then either tell the payer, “OK, I can offer you a network of 150 providers at that rate,” or can go back to those 50 providers to see if they’d be willing to accept the lower rate in order to stay in the network.
    This model is easy to set up. The downside? It can be difficult for the messenger to avoid the temptation of directly negotiating with the payer, which is strictly forbidden.
  • Financial or clinical integration. Most psychologists aren't interested in financial integration, which entails sharing financial risks through capitation arrangements or risk pools. Clinical integration is more attractive because it helps practices improve care, lower costs and enhance patient satisfaction while avoiding antitrust problems. To achieve clinical integration, a practice should have most or all of the 11 elements outlined at antitrust-issues . The practice must have measurable goals for monitoring utilization and treatment quality, for example. There must also be a process for disciplining or even terminating practitioners who can't meet those goals.

Clinical integration can be hard to set up. An attorney with expertise in antitrust for innovative practice models should review your plans. The upside? That investment will pay off because the elements of clinical integration are beneficial.

Don't ask what the bare minimum is you should do to avoid legal trouble. Instead, ask how you can use integration to improve patient care. By doing so, you'll be making your services more marketable to consumers and payers. Plus, you'll have data you can take to a hospital system or payer to show the results you're achieving with your patients.

Risk Management, Antitrust, and Other Legal Issues for Alternative Practice Models: Alan Nessman

Avoiding Antitrust Problems  

The APA Practice Organization gratefully acknowledges the assistance of Jana Martin, PhD; Kevin Ryan, JD; Alan Nessman, JD; Karen Dale, RN; Geoffrey Kanter, PhD; and Vincent J. Bellwoar, PhD, in developing this material

Innovative Practice Models (IPM), formerly referred to as Alternative Practice Models, is now being used to avoid confusion with Alternative Payment Models.

Please note:  Legal issues are complex and highly fact specific and laws vary by jurisdiction. APA Practice Organization staff, consultants and speakers cannot provide legal advice. The information provided in this toolkit is an abbreviated compilation of several workshops and does not constitute legal advice. It should not be used as a substitute for obtaining personal legal advice prior to making personal decisions. Those needing legal advice should contact an experienced attorney licensed in your jurisdiction.

Date created: June 2017