High court wary about den­tal board’s an­titrust ex­emp­tion

Modern Healthcare - - NEWS - By Lisa Schencker

Com­ments from U.S. Supreme Court jus­tices last week sug­gested skep­ti­cism to­ward North Carolina’s de­fense of its state den­tal board in a case that could force changes on state health­care reg­u­la­tory boards across the coun­try.

The is­sue in North Carolina Board of Den­tal Ex­am­in­ers v. Fed­eral Trade Com­mis­sion is whether prac­tic­ing pro­fes­sion­als who serve on state reg­u­la­tory boards should be ex­empt from fed­eral an­titrust laws and al­lowed to re­strict low-cost providers of sim­i­lar ser­vices. Specif­i­cally, the jus­tices are con­sid­er­ing whether the den­tal board in North Carolina, com­posed mostly of prac­tic­ing den­tists, should have been able to tell non-den­tists to stop of­fer­ing teeth­whiten­ing ser­vices in mall kiosks.

The non-den­tists charge less than den­tists for the ser­vice. The plain­tiffs ar­gue that the board’s at­tempt to stop them vi­o­lates an­titrust laws. Lawyers for the board counter that its mem­bers should be im­mune from an­titrust law be­cause the board is a state agency.

It’s common for states to es­tab­lish reg­u­la­tory boards con­sist­ing of mem­bers of the pro­fes­sion be­ing reg­u­lated. Crit­ics say th­ese boards some­times make de­ci­sions that limit com­pe­ti­tion from other providers that could drive down health­care costs. The jus­tices seemed to be look­ing for the Obama ad­min­is­tra­tion to pro­pose a pol­icy that would let them set lim­its on an­titrust ex­emp­tions for state boards with­out jeop­ar­diz­ing states’ abil­ity to reg­u­late pro­fes­sion­als.

The Fed­eral Trade Com­mis­sion deemed the den­tal board’s ac­tions an il­le­gal sup­pres­sion of com­pe­ti­tion that was up­held by the 4th U.S. Cir­cuit Court of Ap­peals. The FTC said the board should not be im­mune be­cause North Carolina did not ac­tively su­per­vise the board’s ac­tions. The board ap­pealed the 4th Cir­cuit rul­ing, ar­gu­ing that it does not need to be ac­tively su­per­vised by the state.

The Amer­i­can Med­i­cal As­so­ci­a­tion and the Amer­i­can Den­tal As­so­ci­a­tion

“This board was is­su­ing a whole bunch of cease-and-de­sist or­ders. They had no au­thor­ity to do that.”

Jus­tice Ruth Bader Gins­burg

filed a friend-of-the-court brief sup­port­ing the state board’s po­si­tion.

Dur­ing oral ar­gu­ments last week in the North Carolina case, some jus­tices ex­pressed reser­va­tions about the board’s ar­gu­ments. “Why should there be an an­titrust ex­emp­tion for con­duct that is not au­tho­rized by state law?” said Jus­tice Ruth Bader Gins­burg. “This board was is­su­ing a whole bunch of cease-and-de­sist or­ders. They had no au­thor­ity to do that.”

Jus­tice Sonia So­tomayor ques­tioned giv­ing the den­tists on the board an an­titrust ex­emp­tion “when they have a self-in­ter­est that’s in­her­ent in their oc­cu­pa­tion.”

An at­tor­ney for the board ar­gued that be­cause the board mem­bers swore an oath to the state to en­force state law, they’re act­ing in the state’s in­ter­est, not their own. But Jus­tice An­thony Kennedy re­sponded that “if the board says, ‘We think what’s good for den­tistry is good for … North Carolina,’ our cases say that’s not enough be­cause you’re pur­su­ing your self-in­ter­est.”

On the other hand, Jus­tices Stephen Breyer and An­tonin Scalia ex­pressed reser­va­tions about lim­it­ing states’ abil­ity to have pro­fes­sion­als reg­u­late their peers. Breyer said it makes sense for brain sur­geons to reg­u­late other brain sur­geons and de­cide who can prac­tice brain surgery in a state. “I don’t want a group of bu­reau­crats de­cid­ing that,” he said. The court could rule that ac­tions by state agen­cies are ex­empt from an­titrust laws as long as the state has a “clearly ar­tic­u­lated an­ti­com­pet­i­tive pol­icy,” Phoenix an­titrust at­tor­ney Eric Fraser wrote in an ar­ti­cle posted on SCOTUS blog. Or it could rule that board ac­tions are ex­empt only if they’re su­per­vised by the state.

Matthew Can­tor, an an­titrust lawyer with Con­stan­tine Can­non in New York City, pre­dicted the court would con­tinue to al­low boards to make de­ci­sions con­cern­ing com­pet­ing ser­vices as long as the state has es­tab­lished a process for chal­leng­ing board de­ci­sions. He ar­gued that al­low­ing prac­tic­ing pro­fes­sion­als to serve on such boards and re­strict ser­vices de­liv­ered by com­peti­tors could lead to higher prices for con­sumers.

But the AMA and the ADA con­tended in their am­i­cus brief that fed­eral an­titrust laws “should not be per­mit­ted … to sub­vert med­i­cal and den­tal de­ci­sions by duly con­sti­tuted state boards re­gard­ing what they be­lieve to be in the best in­ter­ests of pa­tients and the pub­lic.”

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