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1
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DECISION AND ORDER
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EXTRACTED KEY WORDS
PHYSICIAN CONTRACT RESPONDENT CPA ARRANGEMENT PHYSICIAN SERVICES COMMISSION PAYOR PROVISION CARLSBAD BUSINESS PARAGRAPH MEMBER AGREEMENT RESPONDENT MOORE PRACTICE CONTRACT COMMITTEE JOINT ARRANGEMENT COMPLAINT WEST PIERCE DISSOLUTION COMPLYING PARTICIPATING MEDICAL GROUP PRACTICE AGENT EMPLOYEES TERMINATE MEDICINE REPRESENTATIVES DIRECTORS |
031 0002
UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
COMMISSIONERS: Timothy J. Muris, Chairman
Sheila F. Anthony
Mozelle W. Thompson
Orson Swindle
Thomas B. Leary
____________________________________
)
)
In the Matter of )
) Docket No. C-_________
CARLSBAD PHYSICIAN )
ASSOCIATION, INC., )
a corporation, )
)
and )
)
WILLIAM J. BAGGS, M.D., )
SRICHAND S. DARA, M.D., )
GLEN MOORE, )
JAMES J. PURPURA, D.O., )
DEBORAH J. SCHENCK, M.D., )
CHARLES L. SECORA, M.D., )
MAJID A. SYED, M.D., )
and RICHARD L. ZIZZA, M.D., )
individually. )
____________________________________ )
DECISION AND ORDER
The Federal Trade Commission ("Commission"), having initiated an investigation
of certain acts and practices of the Carlsbad Physician Association, Inc. ("CPA"), William J. Baggs,
M.D., Srichand S. Dara, M.D., Glen Moore, James J. Purpura, D.O., Deborah J. Schenck, M.D.,
Charles L. Secora, M.D., Majid A. Syed, M.D., and Richard L. Zizza, M.D., hereinafter sometimes
referred to as "Respondents," and Respondents having been furnished thereafter with a copy of the
draft of Complaint that the counsel for the Commission proposed to present to the Commission for its
consideration and which, if issued, would charge Respondents with violations of Section 5 of the
Page
Federal Trade Commission Act, as amended, 15 U.S.C. § 45; and
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2
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COMPLAINT
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EXTRACTED KEY WORDS
PAYORS PRICES CARLSBAD RESPONDENTS MOORE CONTRACT CPA MEMBERS MEXICO PLANS HEALTH CARE SECORA TRADE COMMISSION ACT FEDERAL TRADE COMMISSION CONTRACT COMMITTEE NEGOTIATIONS BLUE CROSS COMPETITION PHYSICIAN SERVICES GENERAL MEMBERSHIP MEETINGS RBRVS GENERAL MEMBERSHIP GLEN MOORE PRESBYTERIAN SURGICAL CODES RESPECT THEREOF CARLSBAD PHYSICIAN ASSOCIATION WEST PIERCE |
031
UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
)
In the Matter of )
)
CARLSBAD PHYSICIAN ) Docket No. C-
ASSOCIATION, INC., a corporation, )
)
and )
)
WILLIAM J. BAGGS, M.D., )
SRICHAND S. DARA, M.D., )
GLEN MOORE, )
JAMES J. PURPURA, D.O., )
DEBORAH J. SCHENCK, M.D., )
CHARLES L. SECORA, M.D., )
MAJID A. SYED, M.D., )
and RICHARD L. ZIZZA, M.D., )
individually. )
____________________________________ )
COMPLAINT
Pursuant to the provisions of the Federal Trade Commission Act, as amended, 15 U.S.C. §
et seq., and by virtue of the authority vested in it by said Act, the Federal Trade Commission,
reason to believe that the Carlsbad Physician Association, Inc. ("CPA"), William J. Baggs, M.D.,
Srichand S. Dara, M.D., Glen Moore, James J. Purpura, D.O., Deborah J. Schenck, M.D., Charles L.
Secora, M.D., Majid A. Syed, M.D., and Richard L. Zizza, M.D., hereinafter collectively referred to
as "Respondents," have violated Section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45, and
it appearing to the Commission that a proceeding by it in respect thereof would be in the public
hereby issues this Complaint stating its charges in that respect as follows:
I. NATURE OF THE CASE
1. This matter concerns horizontal agreements among competing physicians who
constitute most of the physicians in the Carlsbad, New Mexico, area, to fix prices charged to health
care plans and other third-party payors ("payors"), and to refuse to deal with payors except on
collectively agreed-upon terms. The physicians orchestrated these price-fixing agreements and
concerted refusals to deal through CPA, and their conduct had the purpose and effect of raising the
prices of physician services in the Carlsbad area.
II. RESPONDENTS
2. CPA is a for-profit corporation, organized, existing, and doing business under
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3
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ANALYSIS OF AGREEMENT
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EXTRACTED KEY WORDS
CPA CONTRACTING RESPONDENTS HEALTH PLANS AGREEMENT MEMBERS PROPOSED ORDER PARAGRAPH ARRANGEMENT PAYORS NEGOTIATIONS CONSENT ORDER JOINT ARRANGEMENT FACILITATE COMMISSION COMPLAINT ORCHESTRATING QUALIFIED RISK-SHARING AGENT PROHIBITIONS FEES PRACTICE CARE COLLECTIVE BARGAINING COMPETING PHYSICIANS CHARGES CARLSBAD BARS RELIEF |
031 0002
ANALYSIS OF AGREEMENT CONTAINING
CONSENT ORDER TO AID PUBLIC COMMENT
The Federal Trade Commission has accepted, subject to final approval, an agreement
containing a proposed consent order with the Carlsbad Physician Association (CPA), its executive
director, and seven physicians. The agreement settles charges that these parties violated Section
the Federal Trade Commission Act, 15 U.S.C. § 45, by orchestrating and implementing agreements
among members of CPA to fix prices and other terms on which they would deal with health plans, and
to refuse to deal with such purchasers except on collectively-determined terms. The proposed
order has been placed on the public record for 30 days to receive comments from interested persons.
Comments received during this period will become part of the public record. After 30 days, the
Commission will review the agreement and the comments received, and will decide whether it should
withdraw from the agreement or make the proposed order final.
The purpose of this analysis is to facilitate public comment on the proposed order. The
is not intended to constitute an official interpretation of the agreement and proposed order, or to
their terms in any way. Further, the proposed consent order has been entered into for settlement
purposes only and does not constitute an admission by any respondent that said respondent violated
law or that the facts alleged in the complaint (other than jurisdictional facts) are true.
The Complaint Allegations
CPA was organized in 1998-1999 to be a vehicle for competing physicians to bargain
collectively with health plans, in order to obtain "favorable reimbursement" for its members. Its
physician members represent 76 percent of all physicians and 83 percent of the primary care
practicing in the Carlsbad area, which is located in southeastern New Mexico.
CPA members have refused to deal with health plans on an individual basis. Instead, CPA's
executive director (Glen Moore), its five-member Board of Directors, and a "Contract Committee"
consisting of Board members and additional physician members of CPA negotiate with health plans that
desire to contract with CPA members. Each of the named physician respondents is or has been a
member of CPA's Board of Directors and Contract Committee and actively participated in negotiations
with payors.
Contracts that the CPA leadership negotiates are presented to the general membership, and
members vote on whether CPA should accept the contract. The Board signs contracts that a majority
of CPA members vote to accept. In accordance with this model, respondents have orchestrated
collective agreements on fees and other terms of dealing with health plans, have carried out
negotiations with several health plans, and have orchestrated refusals to
deal and threats to refuse to deal with health plans that resisted respondents' desired terms.
CPA purported to operate as a "messenger" -- that is, an arrangement that does not facilitate
agreements on price -- it engaged in various actions that reflected or orchestrated such
Since its inception, CPA has operated solely to exert the collective bargaining power of its
members. It engages in no activities or functions other than health plan contracting. Further, in
connection with health plan contracting, its members do not engage in any cooperative activities to
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4
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AGREEMENT CONTAINING CONSENT
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EXTRACTED KEY WORDS
CONSENT AGREEMENT COMMISSION COMPLAINT CARLSBAD DRAFT WEST PIERCE SUITE FEDERAL TRADE COMMISSION ACCEPTANCE FACTS LAW ZIZZA RICHARD PRACTICES CONTEMPLATES CPA MAJID SECORA CHARLES SCHENCK DEBORAH PURPURA JAMES DARA SRICHAND BAGGS WILLIAM ACTS PROCEEDING |
UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
____________________________________
)
)
In the Matter of )
) File No. 031 0002
CARLSBAD PHYSICIAN )
ASSOCIATION, INC., )
a corporation, )
)
and )
)
WILLIAM J. BAGGS, M.D., )
SRICHAND S. DARA, M.D., )
GLEN MOORE, )
JAMES J. PURPURA, D.O., )
DEBORAH J. SCHENCK, M.D., )
CHARLES L. SECORA, M.D., )
MAJID A. SYED, M.D., )
and RICHARD L. ZIZZA, M.D., )
individually. )
____________________________________ )
AGREEMENT CONTAINING CONSENT ORDER TO CEASE AND DESIST
The Federal Trade Commission ("Commission"), having initiated an investigation of
certain acts and practices of the Carlsbad Physician Association, Inc. ("CPA"), William J. Baggs,
M.D., Srichand S. Dara, M.D., Glen Moore, James J. Purpura, D.O., Deborah J. Schenck, M.D.,
Charles L. Secora, M.D., Majid A. Syed, M.D., and Richard L. Zizza, M.D., hereinafter collectively
referred to as "Proposed Respondents," and it now appearing that Proposed Respondents are willing
to enter into an Agreement Containing Consent Order to Cease and Desist ("Consent Agreement")
from certain acts and practices, and providing for other relief,
IT IS HEREBY AGREED by and between Proposed Respondents and their attorneys, and
counsel for the Commission that:
1. Proposed Respondent CPA is a for-profit corporation, organized, existing, and doing business
under and by virtue of the laws of the State of New Mexico, with its principal address at
West Pierce St., Suite 100, Carlsbad, NM 88220.
2. Proposed Respondent Glen Moore is the Executive Director of CPA. His principal address is
P.O. Box 381, Benton, MS 39039.
3. Proposed Respondents William J. Baggs, M.D., Srichand S. Dara, M.D., James J. Purpura,
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