I didn’t intended for my first substantive posting to be about the antitrust issues surrounding the sharing of fee schedules, but as it happens, I was researching the issue, and I will share what I have learned. I should mention, that an excellent resource which gives a great foundation on anti-trust issues in dentistry is the Antitrust Laws in Dentistry: A primer of “Dos, Don’ts and How to’s” for Dentists and Dental Societies, Published by the American Dental Association written by Mark Rubin et. al., Associate General Counsel to the American Dental Association. This publication was incredibly useful at guiding my research and in framing this blog post. It is available here http://www.indental.org/uploads/antitrust_booklet.pdf if you are looking for a more in depth, but still easily comprehendible, discussion of some of the topics I have covered today.
The purpose for my research came about as a result of an article I’m writing about succession planning in dentistry. One piece of advice I give in the article is to put together an agreement with another practitioner whereby another dentist agrees to both, (1) taking custody of patient records and, (2) treating patients in accordance with the transferor’s fee schedule. (A blog posting discussing succession planning in larger detail is forthcoming). When I was discussing this tip with a dentist his reaction was that federal antitrust laws prevented dentists from disclosing fee schedules to one another. This caught me off guard, as I was certain that for the purposes of succession planning, which in dentistry largely amounts to ensuring ongoing patient care, the disclosure of fee schedules would be permissible.
The general purpose of Federal Antitrust laws are to ensure market competition and in doing so protect consumers from the evils which stem from a market controlled by cartels and monopolies. The legal standard for determining if a certain behavior is violative of federal antitrust laws, (specifically the Sherman Antitrust Act) is whether or not there is a “concerted action” which produces an “unreasonable restraint on competition”.
More or less, a “concerted action” is any action, formal or not, which taken by more than one party which results in the “unreasonable restraint on trade.” It is noteworthy that even a discussion among colleagues over cocktails may be a concerted action if discussion results several practitioners adjusting their fee schedules in a way which essentially fixes prices for a certain procedure or procedures. Obviously a formal agreement whereby prices are set at certain levels would also be a violation.
To determine if there is an unreasonable restraint on trade the courts employ a balancing test which weighs competitive and anti-competitive market forces which result from the concerted action. Generally the court will conduct an in-depth analysis to determine if the concerted action truly created conditions unfavorable for competition. There are also some actions which are recognized by the courts to create conditions unfavorable to competition (see price fixing), and those actions are analyzed more strictly against the accused, with certain presumptions made in favor of the accuser (usually the Federal Trade Commission, sometimes the Department of Justice). In cases of egregious price fixing, the government may prosecute antitrust cases both criminally and civilly. For most cases, the government’s remedy is civil damages and injunctive relief, or in other words, they take your money and force you to change your impermissible behavior.
Since it is relatively easy for dentists to fall into antitrust traps, and because the consequences are so severe, most simply do not discuss their fee schedules with outsiders or other practitioners. Still, the legal standards derived from federal antitrust law do not provide an absolute bar against disclosing fee schedules. So long as the result is not a restraint of trade, fee schedules can be discussed and disclosed.
Succession and estate planning are perfect examples of when and how fee schedules may be disclosed without violating federal antitrust law. If the purpose of the disclosure is to make sure that another dentist will honor a fee schedule in the event of the death or disability of another dentist, that disclosure is permissible. To fully protect one’s self, I would recommend a Non-Disclosure Agreement (NDA) which includes terms whereby the dentist receiving the fee schedule agrees not to, (1) disclose the transferor’s fee schedule and, (2) change their fee schedule based on the receipt of the fee schedule.
A few things are worth mentioning here. First, NDA’s can be put together inexpensively, and the type needed here should only take about an hour of an attorney’s time, so don’t let an attorney charge you too much for this. Second, if you’re paying for succession planning on a flat fee basis, the NDA should be part of the “package” and you should not be charged additionally for it. Finally, many protections can be built into any NDA, but the type needed here is basic and should not be allowed to devolve into and endless pit of negotiation and counterproposal…just get a agreement in place and make sure you’re dealing with a straight shooter.
It is also worth mentioning the state antitrust laws do exist and may be relevant, so your decision to disclose or not disclose your fee schedule should also take state law into consideration.
The bottom line is that there are ways to disclose a fee schedule but such a disclosures must be made carefully, with proper intentions, and without impermissible results.
Information I post in this blog is not intended to be legal advice and should not be relied on. Nothing contained in this blog shall create an attorney client relationship. If you’re a dentist and you have legal questions you should contact licensed attorney in your state.
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