Applicability of European Union Competition Law to Health Care Providers: The Dividing Line between Economic and Noneconomic Activities.

Ever-increasing health spending, which, according to future projections, continues to outpace economic growth, will further endanger the financial sustainability of health systems. In a quest to improve the efficacy and efficiency of the health system and thus strengthen its financial sustainability, member states are employing market-based mechanisms to finance, manage, and provide health care. However, the introduction of elements of competition is constrained by the application of EU competition law, which raises significant concerns regarding the applicability of competition law and its limits in the field of health care. Due to the lack of a clear definition in EU legislation, the applicability and scope of competition law are determined on a case-by-case basis, which reveals an inconsistent approach by the European Commission and the CJEU regarding the application of competition law to health care providers and has created legal uncertainty. The aim of this article is to analyze relevant decisions by the commission and the CJEU case law in the pursuit of "boundaries" that may trigger the applicability of competition law with regard to health care providers. Based on the findings of the analysis, the article proposes a set of principles or guidelines for determining whether a health care provider should be considered as an undertaking and, as such, subject to EU competition law.

The role of EU competition law in health care and the 'undertaking' concept.

Part of the controversy surrounding competition and health care stems from the complexity connected with delineating the applicability of competition law - encompassing both the provisions governing anticompetitive agreements and abuse of dominance and the state-aid rules. Cases determined at the European Union (EU) level within the past 30 years have developed a broad framework, and notable trends have emerged - for example, a distinction between health care providers and managing bodies (purchasers). The former have been subject to an 'abstract' test and the latter to a more sophisticated 'concrete' test. In this paper, we chart the development of the EU courts' approach to developing the 'undertaking' concept in health care and examine the current EU competition law framework with a view to identifying future directions. van de Gronden has recently identified a 'three-prong' test of exemption from competition law in connection with the recent CEPPB case: firstly, where the supply of services is predominantly dependent upon public financing; secondly, the public funding aims to achieve a public interest goal and thirdly, the activities concerned are closely related to this public interest goal. We examine this test in a health care context, drawing on our findings regarding Dutch competition reforms.

Doc ownership takes legal hit. The dismissal of Little Rock Cardiology Clinic's antitrust case against Baptist Health could create roadblocks for physician groups, some suggest.

When a federal judge in Arkansas tossed out an antitrust complaint, hospitals nationwide got some legal guidance on fighting physician-owned specialty hospitals. The court "ultimately boiled down to a simple, logical conclusion: A hospital cannot monopolize a market in which it doesn't offer a product," says general counsel for the Federation of American Hospitals Jeffrey Micklos, left.

Competition policy: consequences of restrictive trade practices and price-fixing provisions for medical practitioners in Australia and New Zealand.

Competition laws have only applied to many participants in the health care industry in Australia and New Zealand since the mid 1990s. Since then, the Australian Competition and Consumer Commission has considered a number of applications by medical practitioner associations and private hospitals to authorise potentially anti-competitive conduct, while the New Zealand Commerce Commission has successfully prosecuted a group of ophthalmologists. Amongst medical practitioners, however, there is still confusion and misunderstanding concerning the type of conduct caught by the Australian Trade Practices Act 1974 (Cth) and the New Zealand Commerce Act 1986 (NZ). This is of serious concern given the substantial penalties associated with price-fixing and restrictive trade practices. This article examines the provisions of these Acts most relevant to medical practitioners as well as a number of determinations and judicial decisions. To provide practical assistance to medical practitioners, the key lessons are extracted.

Physician price fixing under the Sherman Act. An indirect test of the Maricopa issues.

The expression 'price fixing' usually indicates an attempt by competitors to put a floor under the minimum price they will charge. But a recent decision of the Supreme Court, Arizona v. Maricopa County, suggests that attempts to fix maximum prices are equally economically objectionable. In this paper I propose an explanation of simultaneous minimum and maximum price fixing. I also investigate empirically the distribution of physicians' fees in a closely related instance of alleged physician price fixing. The data reject any inference of successful price fixing, and instead conform to the usual predictions of the economics of costly market information.

Physician agreements to control medical prepayment plans: Federal Trade Commission. Adoption and publication of enforcement policy with respect to physician agreements to control medical prepayment plans.

The Federal Trade Commission has adopted, and is publishing with this notice, a statement of enforcement policy with respect to physician agreements to control medical prepayment plans. The statement sets forth the general approach the Commission intends to use in its case-by-case enforcement program for evaluating physician agreements to form, operate, or control such plans and for evaluating the practices of plans that are controlled by a group of physicians.

Vertical restraints among hospitals, physicians and health insurers that raise rivals' costs. A case study of Reazin v. Blue Cross and Blue Shield of Kansas, Inc. and Ocean State Physicians Health Plan, Inc. v. Blue Cross and Blue Shield of Rhode Island.

Two recent district court opinions consider whether affiliations among hospitals, doctors and health insurers--through contract or ownership--violate the antitrust laws. This Article applies a raising rivals' costs framework to the facts of those cases in order to assess whether the practices at issue were unreasonable.

A new look at restrictive covenants.

While the restrictive covenant issue most often arises in medical group practice with the announcement of a physician's departure, addressing this issue in the planning phase of a group's operation will produce dividends for years to come. It allows preventive planning on these issues to be made in a less emotional context.

Physician fee-setting requires scrutiny.

To avoid antitrust liability from physician fee-setting in HMOs and PPOs, participating physicians should share the risk of profit and loss. "Health Law" is a regular feature of Physician Executive contributed by the law firm of Epstein Becker and Green, P.C. Douglas A. Hastings, Esq., a partner in the firm's Washington, D.C., offices serves as column editor.

The case against without-cause termination provisions in provider contracts.

The decision of the California Supreme Court in Potvin v. Metropolitan Life Insurance Company, issued in 2000, held that a physician who is eliminated from a health plan's network based upon a "without-cause" termination clause in the contract nevertheless may be entitled to fair procedure rights. Although the case did not explain certain elements of the test of substantial economic power, healthcare entities can take precautions in response to the Potvin decision.

Non-competition agreements: how to make them work for you.

In a time of staffing shortages and increased competition for shrinking reimbursement dollars, home care agencies need to protect themselves from unprincipled or unknowing employees that leave the agency to work for a competitor or for a patient, bringing with them other agency employees, patient lists, and other proprietary information. Well-drafted, attorney-reviewed, enforceable non-competition agreements can help mitigate some of these problems.

Noncompete clauses: a contract provision that has exhausted its usefulness?

PURPOSE: Noncompete clauses (NCs) are common in many physician employment agreements, including those of radiologists. NCs restrict radiologists' ability to perform services for anyone other than their employers, not only during the term of employment but also for a period of time after employment ends. Although courts frown on the post-termination portion as a restraint of trade, in most states, NCs will be enforced if they are deemed reasonable in duration and geography. However the practice of radiology has changed. Teleradiology is common, and improvements in telecommunications and portable devices allow radiologists to perform their services virtually anywhere. In light of these changes, are NCs still necessary for radiologists? METHODS: Eighty-six University of Maryland radiology residency alumni for whom e-mail information was available were asked to complete an online survey regarding whether they are subject to NCs, the key terms of their NCs, and their views on the continuing usefulness of NCs. A review of all state and federal cases published in the Westlaw law database in which radiologists' NCs were adjudicated was also performed. RESULTS: Twenty-one alumni from our residency program completed the survey, representing a 24.4% response rate; 57.1% of respondents are subject to NCs. Of that group, post-termination restrictions ranged from 1 to 2 years in duration, and geographic limitations ranged from 7 to >50 miles from the employer's practice. Respondents were split as to the impact of teleradiology, with 36.8% feeling that NCs are now more necessary and 26.3% feeling that NCs are less necessary. Searches of Westlaw revealed 7 cases on point, which upheld as reasonable NCs ranging from 1 to 5 years in duration and imposing geographic limitations of 15 to 40 miles from the employer's practice. CONCLUSIONS: Although the practice of radiology has undergone significant changes, this survey shows that NCs are still widely used and are still being enforced in many courts. It is unclear whether NCs still make sense in today's practice, but it may be important to modify them to explicitly address the practice of teleradiology. NCs are common and have been upheld in court, although radiologists are split on their usefulness in this era of teleradiology. Contracts should specifically address teleradiology in NC provisions.