Antitrust Law Daily Wrap Up, ANTITRUST NEWS: South Dakota Chiropractors Agree to Resolve U.S. Challenge to Joint Contracting, (Apr 9, 2013)

By Jeffrey May, J.D.

Chiropractic Associates, Ltd. of South Dakota (CASD), an association of approximately 300 chiropractors representing approximately 80 percent of all chiropractors practicing in the state, has agreed to settle a civil suit brought by the Department of Justice Antitrust Division. Yesterday, the Antitrust Division filed a complaint and proposed consent decree in the federal district court in Sioux Falls (U.S. v. Chiropractic Associates, Ltd. of South Dakota, Case 4:13-cv-04030-LLP).

The Antitrust Division alleges a violation of Sec. 1 of the Sherman Act. 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 alleges that CASD's practice of negotiating contracts on behalf of its members has increased prices for chiropractic services in South Dakota.

Under the proposed consent decree, if approved by the court, CASD would be enjoined 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 would not enjoin CASD from providing credentialing services--recognizing that a physician is qualified and competent—and utilization review services—establishing cost-control and quality-control mechanisms. CASD does not admit liability.

"Chiropractic Associates Ltd. of South Dakota negotiated contracts on behalf of all its members, including competing providers, resulting in increased prices for chiropractic services in South Dakota," said Bill Baer, Assistant Attorney General in charge of the Antitrust Division. "Today’s settlement promotes competition among health care providers and prevents collective action that harms consumers and violates the antitrust laws."

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

News: Antitrust AntitrustDivisionNews