Antitrust Law Daily Wrap Up, ANTITRUST—D. S.D.: U.S. consent decree approved in suit against South Dakota chiropractic association over collective contract negotiations, (Sep 6, 2013)

By Jeffrey May, J.D.

The federal district court in Sioux Falls, South Dakota, has approved a U.S. consent decree, resolving a civil suit brought by the Department of Justice Antitrust Division against Chiropractic Associates, Ltd. of South Dakota (CASD) (U.S. v. Chiropractic Associates, Ltd. of South Dakota, September 3, 2013, Piersol, L.).

In April, the Justice Department filed a complaint against CASD, an association of approximately 300 chiropractors representing approximately 80 percent of all chiropractors practicing in the state. At the same time, the government filed a proposed consent decree resolving the allegations.

According to the complaint, since 1997, CASD collectively negotiated the rates and price-related terms for at least seven contracts with insurers on behalf of CASD’s members. Except for members who were part of the same practice groups, CASD’s members were not clinically or financially integrated, and CASD’s actions were not necessary to achieve any benefits for consumers. The government alleged that CASD’s practice of negotiating contracts on behalf of its members increased prices for chiropractic services in South Dakota.

The consent decree prohibits CASD from contracting with payers on behalf of chiropractors and from facilitating joint contracting among chiropractors in South Dakota, North Dakota, Minnesota, and Iowa. It would require CASD to terminate its current payer contracts at various specified times, but no later than three months after the court’s entry of the settlement. The consent decree does not enjoin CASD from providing credentialing services—recognizing that a physician is qualified and competent—or utilization review services—establishing cost-control and quality-control mechanisms. CASD is required to provide copies of the consent decree to members and certain employees in an effort to facilitate compliance.

CASD does not admit liability. The consent decree expires in ten years.

The approval of the consent decree with CASD follows approval of a consent decree earlier this year in another Antitrust Division action against a chiropractor association. In May, the federal district court in Tulsa approved a consent decree with the Oklahoma State Chiropractic Independent Physicians Association (OSCIPA) and its executive director. The suit alleged that OSCIPA and its director violated Sec. 1 of the Sherman Act by jointly negotiating fees on behalf of competing chiropractors.

This is Case 4:13-cv-04030-LLP.

Attorneys: Richard Mosier, Department of Justice, for plaintiff. Mark A. Jacobson (Lindquist & Vennum LLP) for Chiropractic Associates, Ltd.

Companies: Chiropractic Associates, Ltd. of South Dakota; Oklahoma State Chiropractic Independent Physicians Assn.

Cases: Antitrust AntitrustDivisionNews DistrictofColumbiaNews