Michael T. Berkley, D.C, et al.

9910278

UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION

Commissioners:: Robert Pitofsky, Chairman; Sheila F. Anthony; Mozelle W. Thompson; Orson Swindle; Thomas B. Leary

In the Matter of

MICHAEL T. BERKLEY, D.C., and
MARK A. CASSELLIUS, D.C.

Docket No. C-3936

Decision and Order

The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondents named in the caption hereof, and the respondents having been furnished thereafter with a copy of a draft of complaint which the Midwest Region proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondents with violations of the Federal Trade Commission Act; and

The respondents, their attorneys, and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondents of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondents that the law has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission's Rules; and

The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondents have violated the said Act, and that a complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of thirty (30) days, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following order:

1. Respondent Michael T. Berkley, D.C., is a chiropractor licensed and doing business under and by virtue of the laws of the State of Wisconsin, with his principal place of business located at 322 Cameron Avenue, La Crosse, Wisconsin 54601.

2. Respondent Mark A. Cassellius, D.C., is a chiropractor licensed and doing business under and by virtue of the laws of the State of Wisconsin, with his principal place of business located at 2045 32nd Street South, La Crosse, Wisconsin 54601.

3. The Federal Trade Commission has jurisdiction of the subject matter in this proceeding and of the respondents, and the proceeding is in the public interest.

ORDER

IT IS ORDERED that, for the purposes of this order, the following definitions shall apply:

A. "Payer" means any person that purchases, reimburses for, or otherwise pays for all or part of any health care services for itself or for any other person. "Payer" includes, but is not limited to, any health insurance company; preferred provider organization; prepaid hospital, medical, or other health service plan; health maintenance organization; government health benefits program; employer or other person providing or administering self-insured health benefits programs; and patients who purchase health care for themselves.

B "Person" means both natural persons and artificial persons, including, but not limited to, corporations, unincorporated entities, partnerships, and governments.

C. "Provider" means any person that supplies health care services to any other person, including, but not limited to, chiropractors, physicians, hospitals, and clinics.

D. "Reimbursement" means any payment, whether cash or non-cash, or other benefit received for the provision of chiropractic goods and services.

E. "Qualified risk-sharing joint arrangement" means an arrangement to provide physician services in which: (1) all physicians participating in the arrangement share substantial financial risk from their participation in the arrangement through: (a) the provision of services to payers at a capitated rate, (b) the provision of services for a predetermined percentage of premium or revenue from payers, (c) the use of significant financial incentives (e.g., substantial withholds) for its participating physicians, as a group, to achieve specified cost-containment goals, or (d) the provision of a complex or extended course of treatment that requires the substantial coordination of care by physicians in different specialties offering a complementary mix of services, for a fixed, predetermined payment, where the costs of that course of treatment for any individual patient can vary greatly due to the individual patient's condition, the choice, complexity, or length of treatment, or other factors; (2) any agreement on prices or terms of reimbursement entered into by the arrangement is reasonably necessary to obtain significant efficiencies through the joint arrangement; and (3) the arrangement does not restrict the ability, or facilitate the refusal, of physicians participating in the arrangement to deal with payers individually or through any other arrangement.

F. "Qualified clinically integrated joint arrangement" means an arrangement to provide physician services in which: (1) all physicians participating in the arrangement participate in active and ongoing programs of the arrangement to evaluate and modify the practice patterns of, and create a high degree of interdependence and cooperation among, the physicians participating in the arrangement, in order to control costs and ensure quality of the services provided through the arrangement; (2) any agreement on prices or terms of reimbursement entered into by the arrangement is reasonably necessary to obtain significant efficiencies through the joint arrangement; and (3) the arrangement does not restrict the ability, or facilitate the refusal, of physicians participating in the arrangement to deal with payers individually or through any other arrangement.

II.

IT IS FURTHER ORDERED that each respondent, directly or indirectly, or through any corporate or other device, in connection with the provision of chiropractic goods and services in or affecting commerce, as "commerce" is defined in Section 4 of the Federal Trade Commission Act, 15 U.S.C. § 44, forthwith cease and desist from:

A. Entering into, adhering to, participating in, maintaining, organizing, implementing, enforcing, or otherwise facilitating any combination, conspiracy, agreement, or understanding, express or implied, with any person or among any persons, to fix, establish, raise, stabilize, maintain, adjust, or tamper with any fee, fee schedule, price, pricing formula, discount, or other aspect or term of the fees charged or to be charged for any chiropractic goods or services.

B. Entering into, adhering to, participating in, maintaining, organizing, implementing, enforcing, or otherwise facilitating any combination, conspiracy, agreement, or understanding to:

1. Negotiate on behalf of any other chiropractor with any payer or provider;

2. Deal or refuse to deal with, boycott or threaten to boycott, any payer or provider; or

3. Determine any terms, conditions, or requirements upon which chiropractors deal with any payer or provider, including, but not limited to, terms of reimbursement.

C. Encouraging, advising, pressuring, inducing, or attempting to induce any person to engage in any action that would be prohibited if the person were subject to this order.

PROVIDED that nothing in this order shall be construed to prohibit any agreement or conduct by any respondent that is reasonably necessary to form, facilitate, manage, operate, or participate in:

(a) A qualified risk-sharing joint arrangement; or

(b) A qualified clinically integrated joint arrangement, if the applicable respondent has provided the prior notification(s) as required by this paragraph (b). Such prior notification must be filed with the Secretary of the Commission at least thirty (30) days prior to forming; facilitating; managing; operating; participating in; or taking any action, other than planning, in furtherance of any joint arrangement requiring such notice ("first waiting period"), and shall include for such arrangement the identity of each participant, the location or area of operation, a copy of the agreement and any supporting organizational documents, a description of its purpose or function, a description of the nature and extent of the integration expected to be achieved and the anticipated resulting efficiencies, an explanation of the relationship of any agreement on reimbursement to furthering the integration and achieving the expected efficiencies, and a description of any procedures proposed to be implemented to limit possible anticompetitive effects resulting from such agreement(s). If, within the first waiting period, a representative of the Commission makes a written request for additional information, the applicable respondent shall not form; facilitate; manage; operate; participate in; or take any action, other than planning, in furtherance of such joint arrangement until thirty (30) days after substantially complying with such request for additional information or shorter waiting period as may be granted by letter from the Bureau of Competition.

III.

IT IS FURTHER ORDERED that each respondent shall:

A. Within thirty (30) days after the date this order becomes final, distribute a dated and signed notification letter in the form set forth in Appendix A to this order along with a copy of the complaint and order in this matter to each current agent, representative, or employee of the respondent whose activities are affected by this order, or who has responsibilities with respect to the subject matter of this order.

B. For a period of five (5) years after the date this order becomes final, and within thirty (30) days of the date the person assumes such position, distribute a dated and signed notification letter in the form set forth in Appendix A to this order along with a copy of the complaint and order in this matter to each new agent, representative, or employee of the respondent whose activities are affected by this order, or who has responsibilities with respect to the subject matter of this order.

IV.

IT IS FURTHER ORDERED that each respondent shall, for a period of ten (10) years after the date this order becomes final:

A. Notify the Commission within thirty (30) days of the discontinuance of his present business or employment and of each affiliation with a new business or employment. Each notice of affiliation with any new business or employment shall include his new business address and telephone number, current home address, and a statement describing the nature of the business or employment and the duties and responsibilities.

B. Provide a copy of the complaint and order in this matter to each new employer within seven (7) days of his employment where the duties and responsibilities of such employment are subject to the provisions of this order.

IT IS FURTHER ORDERED that each respondent shall, within thirty (30) days after the date on which this order becomes final, distribute by first-class mail a copy of this order and the accompanying complaint to each payer or provider who, at any time since January 1, 1997, has communicated any desire, willingness, or interest in contracting for chiropractic goods and services with the respondent.

VI.

IT IS FURTHER ORDERED that:

A. Within sixty (60) days after the date this order becomes final, each respondent shall submit to the Commission a verified written report setting forth in detail the manner and form in which he intends to comply, is complying, and has complied with Paragraphs II, III and V of this order.

B. One (1) year from the date this order becomes final, annually for the next five (5) years on the anniversary of the date this order becomes final, and at other times as the Commission may require, each respondent shall file a verified written report with the Commission setting forth in detail the manner and form in which he has complied and is complying with Paragraphs II through IV of this order.

VII.

IT IS FURTHER ORDERED that, for the purpose of determining or securing compliance with this order, upon written request, each respondent shall permit any duly authorized representative of the Commission:

A. Access, during normal office hours and in the presence of counsel, to inspect and copy all books, ledgers, accounts, correspondence, memoranda, calendars, and other records and documents in the possession or under the control of respondent relating to any matter contained in this order.

B. Upon five business days' notice to a respondent, and without restraint or interference from that respondent, to interview that respondent or any employee or representative of that respondent.

VIII.

IT IS FURTHER ORDERED that this order shall terminate on April 11, 2020.

By the Commission.

Donald S. Clark
Secretary

SEAL:

ISSUED: April 11, 2000

Appendix A

[Michael T. Berkley, D.C./Mark A. Cassellius, D.C., Letterhead]

Dear Agent, Representative, Employee, or Third Party Payer:

[Michael T. Berkley, D.C./Mark A. Cassellius, D.C.] has entered into an agreement with the Federal Trade Commission to settle charges that he and other unnamed persons conspired to fix prices for chiropractic services and to conduct a boycott of the Gundersen Lutheran Health Plan to obtain higher reimbursement for chiropractic manipulation services. As part of the settlement agreement, Dr. [Berkley/Cassellius] is required to send this notification letter and a copy of the complaint and order to each of his agents, representatives, and employees who have responsibilities with respect to the subject matter of the order, and to each third-party payer who, at any time since January 1, 1997, has communicated any desire, willingness, or interest in contracting for chiropractic goods and services with Dr. [Berkley/Cassellius]. The agreement is for settlement purposes only and does not constitute an admission by Dr. [Berkley/Cassellius] that the law has been violated as alleged in the complaint, or that the facts as alleged in the complaint, other than jurisdictional facts, are true.

Under the terms of the order, Dr. [Berkley/Cassellius] is prohibited from:

Fixing prices or encouraging others to fix prices for any chiropractic goods and services.

Organizing, participating in, or enforcing any agreement (1) to negotiate on behalf of any chiropractor with any payer or provider; (2) to deal or refuse to deal with, boycott or threaten to boycott, any payer or provider; and (3) to determine the terms or conditions upon which chiropractors will deal with any payer or provider.

Encouraging or assisting any person to take any action that, if taken by Dr. [Berkley/Cassellius], would violate the order.

A copy of the complaint and order is enclosed.

/s/

[Michael T. Berkley, D.C./Mark A. Cassellius, D.C.]

Enclosures