Nevada: Federal inquiry targets OB doctors re demanding more $$$ to deliver baby's

Home Health Columnist / Guide · Aug 17, 2002

Thursday, August 15, 2002

OB/GYN group's bargaining might violate anti-trust law

By JOELLE BABULA

REVIEW-JOURNAL

http://www.lvrj.com/lvrj_home/2002/Aug-15-Thu-2002/news/19417390.html

Federal officials are investigating a group of Clark County obstetricians to determine if they've been collectively demanding pay increases for delivering babies.

Dr. John Nowins, president of the Clark County OB/GYN Society, disclosed the investigation Wednesday, releasing a July 19 letter the Federal Trade Commission sent to the doctors' group.

"The Federal Trade Commission is conducting a non-public investigation to determine whether the Clark County OB/GYN Society and certain ob-gyns have engaged in an effort to restrain trade ... by collectively negotiating the prices and terms of third-party payer contracts, or by collectively refusing to deal with third party payers," the letter states.

The letter also states that, "This investigation should not be viewed as an accusation by the Federal Trade Commission or its staff of any wrongdoing."

By law, doctors are not allowed to collectively bargain for higher wages from managed care and other insurance companies. Acting as a group to negotiate increased pay violates federal anti-trust laws and is punishable by fines or by dissolving the group.

Nowins said the group and its members have done nothing wrong. The society represents approximately 100 obstetricians and gynecologists in Clark County.

"We have nothing to hide," Nowins said. "Yes, we're trying to get paid more, but we're not violating any anti-trust laws. We're negotiating individually."

Nowins said doctors have been asking for increased pay in order to stay in business and be available to deliver babies. Decreases in reimbursement rates over the years, coupled with quadrupling liability premiums, have forced more than 30 obstetricians to close their practices, retire early or stop delivering babies, Nowins said.

"The amount of premiums we're expected to pay compared to the amount we do get paid for delivering babies is just not a workable deal," he said. "We've got 23,000 babies to deliver this year and 33 of the 90 (obstetricians) leaving. We're not violating any laws, we're just trying to get the babies delivered in Clark County."

Officials with the Federal Trade Commission would neither confirm nor deny the existence of an investigation. However, they did say such investigations into medical societies or groups are not unusual.

In the mid-1990s, an orthopedic society in Northern Nevada was investigated by the commission and then fined and ordered to disband, according to Dr. Don Havins, chief executive officer and legal counsel for the Clark County Medical Society.

"This is not rare at all," Havins said. "Managed care companies usually file a complaint and that's how the FTC is notified."

In May, the majority of the doctors that deliver babies in Clark County stopped accepting newly pregnant patients because they said they could no longer afford to deliver more babies. The doctors recently began accepting new patients following the passage of new liability legislation in July.

The doctors say if medical malpractice premiums don't drop in price, the only way for them to stay in business is to increase their reimbursements for providing care.

"I'm very happy that we passed the tort reform, but I know we won't see premiums drop for two to three years," Nowins said. "In the meantime, we need to keep doctors here to deliver the babies. Why won't insurance companies increase our reimbursements?"

Assistant Vice President of Sierra Health Services, Jenny DesVaux Oakes, said the company constantly reviews reimbursement rates and raises them if it's appropriate.

Sierra Health Services is the parent company of Health Plan of Nevada, the largest HMO in the state.

"I don't have any comment on the (FTC) investigation, but we are certainly concerned about it," she said. "Our reimbursement rates are currently consistent with the market."

Nowins said the company's reimbursement rates are among the lowest in the industry, including Medicaid.

"We get approximately $1,200 for nine months of care and delivery," he said. "It's below Medicaid. Sierra Health is one of the lowest payers on the planet."

DesVaux Oakes said sometimes the company does pay less than Medicaid, but that the payments are negotiated and agreed upon by individual doctors. She declined to say how much the company pays for deliveries, saying the information is proprietary.