FTC guid­ance means state med­i­cal boards may need to re­vamp

Modern Healthcare - - NEWS - By Lisa Schencker

Many state med­i­cal boards may find them­selves on the wrong side of the Fed­eral Trade Com­mis­sion’s new guide­lines lay­ing out how groups con­sist­ing of ac­tive mem­bers of a pro­fes­sion they reg­u­late can op­er­ate with­out vi­o­lat­ing an­titrust laws.

The U.S. Supreme Court ruled in Fe­bru­ary that reg­u­la­tory boards aren’t im­mune from an­titrust laws just be­cause they carry out their du­ties un­der the aus­pices of state gov­ern­ments. Boards con­sist­ing of ac­tive mar­ket par­tic­i­pants must be “ac­tively su­per­vised” by the state to be im­mune, Jus­tice An­thony Kennedy wrote in the ma­jor­ity opin­ion.

Last week, the FTC ex­plained how it would in­ter­pret Kennedy’s terms, and the doc­u­ment may lead boards and state of­fi­cials to makes changes.

“As a prac­ti­cal mat­ter, it’s likely to be a sim­pler process and per­haps a quicker process to change the way in which a board is su­per­vised, rather than how it’s con­sti­tuted,” said Richard Fe­in­stein, a former di­rec­tor of the FTC’s Bureau of Com­pe­ti­tion. Fe­in­stein, now a part­ner in the law firm Boies, Schiller and Flexner, noted that the FTC says a board can be con­strued as con­trolled by ac­tive mar­ket par­tic­i­pants even if they aren’t a ma­jor­ity of its mem­bers.

In the Supreme Court case that yielded the new guide­lines, the court held 6-3 that it was il­le­gal for a board com­posed mostly of prac­tic­ing den­tists, the North Car­olina Board of Den­tal Ex­am­in­ers, to tell non-den­tists work­ing in mall kiosks to stop of­fer­ing teeth-whiten­ing ser­vices. The den­tal board tried to claim it wasn’t sub­ject to fed­eral an­titrust laws be­cause it was a state agency. But the court said it would have to be ac­tively su­per­vised by the state to be im­mune.

The FTC’s guid­ance de­scribes var­i­ous sce­nar­ios that might raise ques­tions about whether a board mem­ber is an ac­tive mar­ket par­tic­i­pant, whether the board is “con­trolled” by such mem­bers and whether the board is “ac­tively su­per­vised” by the state.

For ex­am­ple, an or­tho­don­tist on a den­tal board would still be con­sid­ered an ac­tive mar­ket par­tic­i­pant—even when de­cid­ing cases re­gard­ing pro­ce­dures per­formed only by den­tists— be­cause that or­tho­don­tist is li­censed and reg­u­lated by the board. If a board can’t make de­ci­sions with­out at least one vote from an ac­tive par­tic­i­pant mem­ber, then the ac­tive par­tic­i­pant mem­bers are con­sid­ered to con­trol the board. And a state can’t claim that it’s ac­tively su­per­vis­ing a board just be­cause a state of­fi­cial is mon­i­tor­ing it. That of­fi­cial also must be able to veto a board’s ac­tions.

The Fed­er­a­tion of State Med­i­cal Boards is still re­view­ing the guid­ance, but it presents more ques­tions than an­swers, said Dr. Hu­mayun Chaudhry, the fed­er­a­tion’s pres­i­dent and CEO. He ex­pressed con­cern about parts of the doc­u­ment, which he said were cre­ated with­out in­put from state med­i­cal boards.

“The added lay­ers that this guid­ance seems to be call­ing for will cer­tainly lead to de­lays and slow­ing down of a reg­u­la­tory process which ul­ti­mately was set up to pro­tect the pub­lic,” Chaudhry said.

That the FTC weighed in at all in the wake of the opin­ion is some­what sur­pris­ing, said Robert Leiben­luft, a former head of the health­care divi­sion of the FTC’s Bureau of Com­pe­ti­tion. The com­mis­sion, he said, typ­i­cally prefers to ex­am­ine sit­u­a­tions on a case-by-case ba­sis. He said the doc­u­ment may prove help­ful to boards and their ad­vis­ers.

“Whether that’s ul­ti­mately up­held by the courts is an­other ques­tion, but I think it’s use­ful to find out where the FTC is com­ing down on th­ese things,” said Leiben­luft, now a part­ner in the law firm Ho­gan Lovells in Wash­ing­ton.

And the courts may be where all this is headed, said Robert Fell­meth, ex­ec­u­tive di­rec­tor of the Cen­ter for Pub­lic In­ter­est Law at the Univer­sity of San Diego. Fell­meth, who has been a critic of the FTC, said the vast ma­jor­ity of boards don’t meet the FTC’s re­quire­ments for “ac­tive su­per­vi­sion”—and he doubts many will do any­thing about it any­time soon.

“They will keep do­ing it un­til you have four or five or six ma­jor tre­ble dam­ages and the credit ru­ina­tion of board mem­bers,” Fell­meth said. “Then you’ll see them act.”

“They will keep do­ing it un­til you have four or five or six ma­jor tre­ble dam­ages and the credit ru­ina­tion of board mem­bers. Then you’ll see them act.”

Robert Fell­meth Ex­ec­u­tivedi­rec­tor Univer­sity of San Diego Cen­ter for Pub­lic In­ter­est Law

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