FYI: FTC Staff Advises Columbine Family Health Center Proposed Cost-Sharing Agreement with Other Hospital Does Not Appear To Violate Anitrust Laws.

The Federal Trade Commission staff has advised Columbine Family Health Center that its proposal to add a provision to an agreement to share certain costs of providing outpatient care with Provenant St. Anthony Hospital would not appear to violate the federal antitrust laws. According to the staff letter, the "patient sorting" provision -- an arrangement governing referral of patients for treatment and follow-up -- is supplementary to the main agreement, which, "...does not appear to restrict competition significantly."

Columbine is a rural health care clinic that provides medical care in Gilpin County, Colorado. It offers medical service to patients regardless of financial status and one of its primary purposes is to provide medical care to indigents. Provenant operates a regional acute care hospital in Denver. In 1993, Columbine and Provenant entered into an agreement to jointly operate a clinic offering primary, occupational and urgent medical care in Black Hawk, Colorado. The agreement has expired and is being renegotiated. Columbine would like to add the "patient sorting" provision governing the referral of patients for follow-up care, and providing that Columbine will provide all the primary medical care during its hours of operation and that Provenant will offer only occupational medicine and urgent care during those hours.

In a letter signed by David R. Pender, Acting Assistant Director for Healthcare in the FTC's Bureau of Competition, the staff analyzed the antitrust implications of the "patient sorting" agreement at the request of Columbine. According to the letter, "It appears that Columbine and Provenant have entered into an agreement to coordinate the operation of, and share some of the costs associated with, what are substantially separate operations undertaken from shared premises. The parties do not appear to be operating a single facility on a shared basis. However, the proposed agreement does not appear to restrict competition significantly, and any incidental restriction of competition between Columbine and Provenant flowing from the proposed "patient sorting" provision is ancillary to the joint undertaking," to offer comprehensive outpatient services during normal business hours without each party having to offer full-time coverage at the clinic.

According to the staff letter, Gilpin County and Clear Creek County have 11 physicians who provide primary, occupational, or urgent medical care services who do not work for either Columbine or Provenant. Moreover, Columbine estimates that over 74 percent of Gilpin County residents travel to Denver for primary and other medical care services.

"Given the narrow scope of the [patient-sorting] provision, the lack of any restriction on the ability of either party to offer services at other locations, and the availability of services from a number of other providers in the service area, the provision does not appear to limit competition in the market in any significant way," the staff letter states.

NOTE: This letter sets out the views of the staff of the FTC's Bureau of Competition, as authorized by the Commission's Rules of Practice. It has not been reviewed or approved by the Commission. As the Commission's rules explain, the staff's advice is rendered "without prejudice to the right of the Commission later to rescind the advice and, where appropriate, to commence an enforcement proceeding." Staff advice concerning issues covered by the Federal Trade Commission/Department of Justice Health Care Policy Statements will be given within 90 to 120 days (depending on the topic) after all necessary information is provided.

Copies of the staff letter and the original inquiry, as well as the DOJ/FTC Statements of Antitrust Enforcement Policy in the Health Care Area, are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC's World Wide Web site at: http://www.ftc.gov