9710117

UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION

Commissioners:

Robert Pitofsky

Sheila F. Anthony

Mozelle W. Thompson

Orson Swindle

Thomas B. Leary

In the Matter of

THE WISCONSIN CHIROPRACTIC ASSOCIATION, a corporation, and RUSSELL A. LEONARD.

Docket No. C-3943

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, and having duly considered the comment filed thereafter by an interested person pursuant to §2.34 of its Rules, now in further conformity with the procedures prescribed in § 2.34 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following order:

1. Respondent Wisconsin Chiropractic Association is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Wisconsin, with its principal office and place of business located at 521 E. Washington Avenue, Madison, Wisconsin 53703.

 

2. Respondent Russell A. Leonard is the Executive Director of the WCA. His principal office or place of business is the same as that of respondent WCA.

 

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

I.

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

A. "Wisconsin Chiropractic Association" or "WCA" means Wisconsin Chiropractic Association, its directors, officers, employees, agents and representatives, predecessors, successors, and assigns; its subsidiaries, divisions, groups, and affiliates, controlled by WCA, and the respective directors, officers, employees, agents and representatives, successors, and assigns of each.

 

B. "Russell A. Leonard" or "Leonard" means Russell A. Leonard, his representatives, agents, and employees.

 

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

 

D. "Payer" means any person that purchases, reimburses for, or otherwise pays for all or part of any health care services, including, but not limited to, chiropractic 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.

 

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

 

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

 

G. "Chiropractor" means a person licensed to engage in the practice of chiropractic.

 

H. "Participation agreement" means any agreement between a payer and a provider in which the payer agrees to pay the provider for the provision of health care services, and in which the provider agrees to accept payment from the payer for the provision of health care services.

II.

IT IS FURTHER ORDERED that respondent WCA, directly or indirectly, or through any corporation or other device, 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. Requesting, proposing, urging, advising, recommending, advocating, or attempting to persuade in any way any person to fix, establish, raise, stabilize, maintain, adjust, or tamper with any fee, fee schedule, price, pricing formula, discount, conversion factor, or other aspect or term or condition of the fees charged or to be charged for any chiropractic goods or services.

 

B. Creating, formulating, suggesting, encouraging adherence to, endorsing, or authorizing any list or schedule of fees for any health care goods or services, including, but not limited to, suggested fees, proposed fees, fee guidelines, discounts, discounted fees, standard fees, recommended fees, or conversion factors.

 

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

 

1. To negotiate on behalf of any chiropractor or group of chiropractors regarding any term, condition, or requirement of dealing with any payer or provider; or

 

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

 

D. Requesting, proposing, urging, advising, recommending, advocating, or attempting to persuade in any way any chiropractor to accept or not accept any aspect, term, or condition of any existing or proposed participation agreement, including, but not limited to, the price to be paid for chiropractic goods or services.

 

E. Soliciting from, or communicating to, any chiropractor any information concerning any other chiropractor's intention or decision with respect to entering into, refusing to enter into, threatening to refuse to enter into, participating in, threatening to withdraw from, or withdrawing from any existing or proposed participation agreement.

 

F. 1. Organizing, sponsoring, facilitating or participating in any meeting or discussion that respondent WCA expects or reasonably should expect will facilitate communications concerning one or more chiropractors' intentions or decisions with respect to entering into, refusing to enter into, threatening to refuse to enter into, participating in, threatening to withdraw from, or withdrawing from any existing or proposed participation agreement; or

 

2. Continuing a meeting or discussion where respondent WCA knows or reasonably should know that a person makes communications concerning one or more chiropractors' intentions or decisions with respect to entering into, refusing to enter into, threatening to refuse to enter into, participating in, threatening to withdraw from, or withdrawing from any existing or proposed participation agreement, and respondent WCA fails to eject such person from the meeting or discussion; or

 

3. Continuing a meeting or discussion where respondent WCA knows or reasonably should know that two or more persons make communications concerning one or more chiropractors' intentions or decisions with respect to entering into, refusing to enter into, threatening to refuse to enter into, participating in, threatening to withdraw from, or withdrawing from any existing or proposed participation agreement.

 

G. For a period of two (2) years after the date that this order becomes final, or until December 31, 2001, whichever is earlier, initiating, originating, developing, publishing, or circulating the whole or any part of any proposed or existing fee survey for any health care goods or services.

 

H. For a period of five (5) years beginning at the expiration of the period in Paragraph II G of this order, initiating, originating, developing, publishing, or circulating the whole or any part of any proposed or existing fee survey for any health care goods or services unless (1) the data collection and analysis are managed by a third party; (2) the raw fee survey data is retained by the third party and not made available to respondent WCA; (3) any information that is shared among or is available to providers is more than three months old; and (4) there are at least five providers reporting data upon which each disseminated statistic is based, no individual provider's data represents more than 25 percent on a weighted basis of that statistic, and any information disseminated is sufficiently aggregated such that it would not allow respondent or any other recipients to identify the prices charged or compensation paid by any particular provider.

 

I. Inducing, suggesting, urging, encouraging, or assisting any person to take any action that, if taken by respondent WCA, would violate this order.

Provided, however, that nothing contained in this order shall be construed to prohibit respondent WCA from petitioning any federal or state government executive agency or legislative body concerning legislation, rules, or procedures, or to participate in any federal or state administrative or judicial proceeding, in so far as such activity is protected by the Noerr-Pennington doctrine.

III.

IT IS FURTHER ORDERED that respondent Leonard, directly or indirectly, or through any corporation or other device, 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. Requesting, proposing, urging, advising, recommending, advocating, or attempting to persuade in any way any person to fix, establish, raise, stabilize, maintain, adjust, or tamper with any fee, fee schedule, price, pricing formula, discount, conversion factor, or other aspect or term or condition of the fees charged or to be charged for any health care goods or services.

 

B. Creating, formulating, suggesting, encouraging adherence to, endorsing, or authorizing any list or schedule of fees for any health care goods or services, including, but not limited to, suggested fees, proposed fees, fee guidelines, discounts, discounted fees, standard fees, recommended fees or conversion factors.

 

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

 

1. To negotiate on behalf of any health care provider or group of health care providers regarding any term, condition, or requirement of dealing with any payer or provider; or

 

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

 

D. Requesting, proposing, urging, advising, recommending, advocating, or attempting to persuade in any way any health care provider to accept or not accept any aspect, term, or condition of any existing or proposed participation agreement, including, but not limited to, the price to be paid for any health care goods or services.

 

E. Soliciting from, or communicating to, any health care provider any information concerning any other health care provider's intention or decision with respect to entering into, refusing to enter into, threatening to refuse to enter into, participating in, threatening to withdraw from, or withdrawing from any existing or proposed participation agreement.

 

F. 1. Organizing, sponsoring, facilitating or participating in any meeting or discussion that respondent Leonard expects or reasonably should expect will facilitate communications concerning one or more health care providers' intentions or decisions with respect to entering into, refusing to enter into, threatening to refuse to enter into, participating in, threatening to withdraw from, or withdrawing from any existing or proposed participation agreement; or

 

2. Continuing a meeting or discussion where respondent Leonard knows or reasonably should know that a person makes communications concerning one or more health care providers' intentions or decisions with respect to entering into, refusing to enter into, threatening to refuse to enter into, participating in, threatening to withdraw from, or withdrawing from any existing or proposed participation agreement, and respondent Leonard fails to eject such person from the meeting or discussion; or

 

3. Continuing a meeting or discussion where respondent Leonard knows or reasonably should know that two or more persons make communications concerning one or more health care providers' intentions or decisions with respect to entering into, refusing to enter into, threatening to refuse to enter into, participating in, threatening to withdraw from, or withdrawing from any existing or proposed participation agreement.

 

G. For a period of two (2) years after the date that this order becomes final, or until December 31, 2001, whichever is earlier, initiating, originating, developing, publishing, or circulating the whole or any part of any proposed or existing fee survey for any health care goods or services.

 

H. For a period of five (5) years beginning at the expiration of the period in Paragraph III G of this order, initiating, originating, developing, publishing, or circulating the whole or any part of any proposed or existing fee survey for any health care goods or services unless (1) the data collection and analysis are managed by a third party; (2) the raw fee survey data is retained by the third party and not made available to respondent Leonard; (3) any information that is shared among or is available to providers is more than three months old; and (4) there are at least five providers reporting data upon which each disseminated statistic is based, no individual provider's data represents more than 25 percent on a weighted basis of that statistic, and any information disseminated is sufficiently aggregated such that it would not allow respondent or any other recipients to identify the prices charged or compensation paid by any particular provider.

 

I. Inducing, suggesting, urging, encouraging, or assisting any person to take any action that, if taken by respondent Leonard, would violate this order.

Provided, however, that nothing contained in this order shall be construed to prohibit respondent Leonard from petitioning any federal or state government executive agency or legislative body concerning legislation, rules, or procedures, or to participate in any federal or state administrative or judicial proceeding, in so far as such activity is protected by the Noerr-Pennington doctrine.

Provided further that nothing contained in Paragraph III of this order shall prohibit respondent Leonard, acting as an agent, employee or representative exclusively for a single provider or payer, from providing comments or advice on any matter to such single provider or payer, or determining or negotiating any terms, conditions, or requirements, including the price to be paid for any health care goods or services, upon which such single provider or payer will deal with any person.

IV.

IT IS FURTHER ORDERED that for a period of five (5) years from the date that this order becomes final, respondent WCA shall:

A. Maintain a copy of each document distributed at each meeting of the WCA's board of directors, WCA district meeting, or seminar or training session sponsored in whole or in part by the WCA for a period of five (5) years from the date of distribution, along with records showing the date of the meeting or seminar at which the document was distributed.

 

B. Maintain a copy of each fee survey, or part thereof, distributed to any WCA member or members for a period of five (5) years from the last date of its distribution, along with records showing the date(s) of distribution and each person to whom the fee survey, or part thereof, was distributed.

 

C. Maintain a copy of each document relating to any subject that is covered by any provision of this order and which is distributed to any WCA member or members for a period of five (5) years from the last date of its distribution, along with records showing the date(s) of distribution and each person to whom the document was distributed.

V.

IT IS FURTHER ORDERED that respondent WCA shall:

A. Within thirty (30) days after the date that this order becomes final, distribute a dated and signed notification letter in the form set forth in Appendix A of this order along with a copy of the complaint and order in this matter: (1) to each of its current officers and directors, and to each other agent, representative, or employee of the WCA whose activities are affected by this order, or who has responsibilities with respect to the subject matter of this order; (2) to each of its current members; and (3) to the designated registered agent on file with the Wisconsin Office of the Commissioner of Insurance for each payer set forth in Appendix B of this order. The notification letter, complaint and order shall be delivered in a format that does not include any additional communication from respondent WCA or any other person.

 

B. For a period of five (5) years after the date that this order becomes final, and within thirty (30) days of the date that the person assumes such position, distribute a dated and signed notification letter in the form set forth in Appendix A of this order, along with a copy of the complaint and order in this matter, to each new officer and director of the WCA, and to each other new agent, representative, or employee of the WCA whose activities are affected by this order, or who has responsibilities with respect to the subject matter of this order. The notification letter, complaint and order shall be delivered in a format that does not include any additional communication from respondent WCA or any other person.

 

C. For a period of five (5) years after the date that this order becomes final, provide each new member with a dated and signed notification letter in the form set forth in Appendix A of this order, along with a copy of the complaint and order in this matter, within thirty (30) days of the new member's admission to the WCA. The notification letter, complaint and order shall be delivered in a format that does not include any additional communication from respondent WCA or any other person.

 

D. Publish a notification letter in the form set forth in Appendix A of this order, along with a copy of this order and the complaint, in an issue of The Wisconsin Chiropractor published no later than 60 days after the date that this order becomes final, and annually each year thereafter for a period of five (5) years. The notification letter, order and the complaint shall be published with such prominence as is given to regularly featured articles in The Wisconsin Chiropractor.

VI.

IT IS FURTHER ORDERED that respondent WCA shall notify the Commission at least thirty (30) days prior to any proposed change in the respondent, such as dissolution, assignment, sale resulting in the emergence of a successor corporation, or the creation or dissolution of subsidiaries or any other change in the respondent that may affect compliance obligations arising under this order.

VII.

IT IS FURTHER ORDERED that respondent Leonard shall, for a period of five (5) years after the date that 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 where the duties and responsibilities of such employment are subject to the provisions of this order. Each such 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.

VIII.

IT IS FURTHER ORDERED that:

A. Within sixty (60) days after the date that 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 the respondent intends to comply, is complying, and has complied with Paragraphs II through VII of this order.

 

B. One (1) year from the date that this order becomes final, annually for the next five (5) years on the anniversary of the date that 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 the respondent has complied and is complying with Paragraphs II through VII of this order.

IX.

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

A. To obtain 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; and

 

B. To interview that respondent or any employee or representative of that respondent in the presence of counsel and without restraint or interference from that respondent.

X.

IT IS FURTHER ORDERED that this order shall terminate on May 18, 2020.

By the Commission.

Donald S. Clark
Secretary

SEAL:

ISSUED: May 18, 2000

APPENDIX A

[Wisconsin Chiropractic Association Letterhead]

Dear Officer, Director, Agent, Representative, Employee, Member or Third Party Payer:

The Wisconsin Chiropractic Association ("WCA") and its executive director, Russell A. Leonard, have entered into an agreement with the Federal Trade Commission to settle charges that the WCA, acting through its executive director, violated the antitrust laws by, among other things, conspiring with at least some of the WCA's members and others to fix or to increase prices paid for chiropractic manipulation services and to boycott third-party payers to raise reimbursement rates for chiropractic manipulation services. As part of the settlement agreement, the WCA is required to send this notification letter and a copy of the complaint and order to each of its officers and directors, its agents, representatives, and employees who have responsibilities with respect to the subject matter of the order, its members, and third-party payers.

Under the terms of the order, the WCA and Russell A. Leonard are prohibited from:

• Fixing prices or encouraging others to fix prices for any chiropractic good or service (or, in the case of Mr. Leonard, any health care goods or services);

• Creating, suggesting, or endorsing any list or schedule of fees to be charged for any health care good or service;

• Organizing, participating in, or enforcing any agreement (1) to negotiate on behalf of any chiropractor or group of chiropractors (or, in the case of Mr. Leonard, any health care provider or group of health care providers) regarding any term, condition, or requirement of dealing with any payer or provider; or (2) to deal or refuse to deal with, boycott or threaten to boycott, any payer or provider;

• Advising, recommending, advocating, or attempting to persuade in any way any chiropractor (or, in the case of Mr. Leonard, any health care provider) to accept or not accept any aspect, term or condition of any existing or proposed participation agreement;

• Soliciting or communicating any chiropractor's (or, in the case of Mr. Leonard, any health care provider's) views, decisions or intentions concerning any participation agreement;

• Organizing, sponsoring, facilitating or participating in any meeting or discussion that the WCA or Mr. Leonard expects or reasonably should expect will facilitate communications concerning any chiropractor's intentions pertaining to any participation agreement;

• Conducting or distributing any fee survey for any health care good or service for a period of two (2) years after the date the order becomes final, or before December 31, 2001, whichever is earlier. For an additional five (5) year period thereafter, the WCA and Mr. Leonard are permitted to conduct and distribute fee surveys, provided that (a) the data collection and analysis are managed by a third party; (b) the raw fee survey data is retained by the third party and not made available to the WCA or Mr. Leonard; (c) any information that is shared among or is available to providers is more than three months old; and (d) there are at least five providers reporting data upon which each disseminated statistic is based, no individual provider's data represents more than 25 percent on a weighted basis of that statistic, and any information disseminated is sufficiently aggregated that it would not allow respondents or any other recipients to identify the prices charged or compensation paid by any particular provider; and

• Encouraging or assisting any person to take any action that, if taken by the WCA or Mr. Leonard, would violate the order.

In addition, the WCA is required, under the terms of the order, to maintain better records, including, but not limited to, retaining copies of all materials distributed at WCA meetings and seminars. The WCA must also maintain a copy of each fee survey distributed to any WCA member, along with a record of its distribution. Finally, the WCA is required to maintain a copy of each other document relating to any subject that is covered by any provision of the order, along with a record of its distribution.