A physician-hospital organization's (PHO) proposal to clinically integrate its members' provision of health care services and contract jointly with health plans and other payers on a fee-for-service (FFS) basis to provide services to plan beneficiaries would be a legitimate joint venture and not stifle competition.
The PHO would participate as a single health network to provide beneficiaries with medical and other health care services, including hospital services, to person covered under health benefits programs offered by self-insured employers and other payers in the region. Central to the proposal would be the PHO's plan to implement a web-based health information technology system to help identify high risk and high cost patients and improve physicians' efficiencies. The PHO would monitor achievement of physician performance and make recommendations for both individual and group performance. Under the terms of the proposed arrangement, an open enrollment period would permit, for a limited time, other physicians in the region to join the PHO. The PHO would be contracting on behalf of the physician members who joined the program, including negotiating and agreeing to the prices to be charged for those physicians' services under the program. Physicians also would generally agree to refer patients to other PHO network physicians when medically appropriate.
The high degree of interdependence among the PHO participants also lent support to significant clinical integration. Imposing a time-limited offer to join the PHO, along with performance monitoring, would likely discourage providers not fully committed to the program from joining. In turn, this would assure those who chose to participate would be fully committed to the PHO's goals and requirements. Thus, the proposed program would likely not impede competition and would not be challenged by the FTC.
FTC Staff Letter Re: TriState Health Partners, Inc. Advisory Opinion, April 13, 2009, Health Care Compliance Reporter ¶660,054.
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