Antitrust Law Daily Wrap Up, ANTITRUST—NDOkla: Consent Decree Approved in U.S. Action Against Oklahoma Chiropractor Association over Joint Negotiation of Fees, (May 28, 2013)

By Jeffrey May, J.D.

The federal district court in Tulsa last week approved a consent decree resolving a Department of Justice Antitrust Division civil action against 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 (U.S. v. Oklahoma State Chiropractic Independent Physicians Assn., May 21, 2013, Kern, T.).

In January, the Antitrust Division filed a complaint against the association of approximately 350 chiropractors and the group's executive director. According to the allegations, the group negotiated at least seven contracts with payors that set prices for chiropractic services on behalf of OSCIPA’s members between 2004 and 2011. The executive director signed several of those contracts on OSCIPA’s behalf.

Upon joining OSCIPA, a chiropractor allegedly gave contracting authority to OSCIPA and immediately charged the price set by the association for its several contracts, even if the chiropractor already had an individually negotiated contract with that payor. The government contended that the association's practice of negotiating contracts on behalf of OSCIPA’s members increased prices for chiropractic services in Oklahoma.

The consent order prohibits OSCIPA and its director from establishing prices or terms for chiropractic services or from negotiating with insurers on behalf of competing chiropractors. It also prohibits them from attempting to facilitate joint negotiations and from communicating with chiropractors about any aspect of pricing or contracting. With limited exceptions, the consent decree requires the defendants to terminate payor contracts at the request of payors or within three months of entry of the decree (if later than the earliest termination date or renewal date). The consent decree will expire in ten years.

The OSCIPA action is not the only recent Antitrust Division case challenging joint fee negotiations by chiropractor organizations. Shortly after the Antitrust Division filed its action against OSCIPA, the government brought a civil antitrust suit against Chiropractic Associates Ltd. of South Dakota (CASD) for jointly negotiating rates and price-related terms on contracts with insurers on behalf of CASD members. CASD is an association comprising approximately 80 percent of all practicing chiropractors in South Dakota. The Antitrust Division filed a complaint and proposed consent decree in the federal district court in Sioux Falls in April. The consent decree in that action is still awaiting court approval.

This is Case 4:13-cv-00021-TCK-TLW.

Attorneys: Cathryn D. McClanahan, Assistant U.S. Attorney, for plaintiff. Robert B. Sartin (Barrow & Grimm PC) for Oklahoma State Chiropractic Independent Physicians Assn.

Companies: Oklahoma State Chiropractic Independent Physicians Assn.

Cases: Antitrust AntitrustDivisionNews OklahomaNews