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A Tip Sheet for ACNM State Legislative Contacts Number 27, June 1999
Updated May 13, 2002

Antitrust/Restraint of Trade

Antitrust laws are intended to ensure open and fair competition by preventing persons or entities from engaging in monopolistic conduct or anticompetitive conspiracies, thereby ensuring that consumers have access to the best mix of goods and services for the best possible price. Federal antitrust law prohibits "monopolization, attempted monopolization" and contracts, combinations and conspiracies in restraint of trade. State antitrust laws also prohibit such activities. For nurse-midwives and other health care providers, antitrust law is an important protection against more powerful entities in the health care marketplace, such as hospitals, physician bodies, health plans or large purchasing groups, from engaging in monopolistic or conspiratorial activities which unreasonably restrain their trade. Antitrust law also protects consumers and other players in the health care marketplace from potential anticompetitive activities in which CNMs or other health providers might engage. Antitrust law cuts two ways: nurse-midwives need to understand the law so they can use it to protect themselves, but they also need to understand it so they can avoid participating in any activity that could be construed as a restraint of trade against some other entity or individual.

State Antitrust Laws

As resources shrink at the federal level for antitrust enforcement, state antitrust laws and the agencies charged with enforcing those laws can play an important role in assisting CNMs/CMs with complaints regarding anti-competitive activities. State attorneys general have the responsibility for enforcing both federal and state antitrust law. Each attorney general assigns a member of his/her staff to handle antitrust issues and complaints. The types of penalties imposed by state antitrust law parallel those imposed by federal antitrust law, but they vary from state to state. Several states impose only fines and/or imprisonment as the penalties for antitrust violations. For a list of antitrust contacts in state attorneys general's offices, consult the ACNM Antitrust/Restraint of Trade Resource Packet (see Essential Documents, below). The packet provides guidance on the type of information you will need to provide an attorney general's office in order to substantiate a restraint of trade complaint.

Antitrust Exemptions

In recent years, the American Medical Association and other groups of physicians have sought to undermine both federal and state antitrust laws, so that they can increase their power in the marketplace. Specifically, physicians have sought exemptions from federal and state antitrust laws that would permit them to engage in collective bargaining negotiations with health plans and other economic entities, without meeting the traditional labor standards for collective bargaining.

Federal Legislation

Legislation is currently pending in Congress on the Health Care Antitrust Improvements Act of 2002 (HR3897), which deals with the Antitrust exemption issue. The Senior Policy Analyst has prepared a separate document which addresses HR3897. This document can be found by clicking on "Speak Out!" and going to "Antitrust Protections for CNMs in Jeopardy."

State Legislation

A 1999 Texas law will give physicians the right to bargain collectively with health plans through an exemption in the state's antitrust laws. The law permits physicians (and not any other health professional) to engage in joint negotiations regarding: the delivery of "effective, cost-efficient prenatal care; practices and procedures to assess and improve women's medical and health care; formulation and application of physician reimbursement methodology; physician termination and selection criteria," and other related issues. It permits physicians to negotiate for fees, prices for services, discounts and payment capitation amounts, IF the health benefit plan has "substantial market power" and IF the negotiations have approval from the attorney general. The joint negotiation shall represent "no more than ten percent of the physicians in a health benefit plan's defined service area," with some exceptions. A representative of the Federal Trade Commission issued a statement opposing the Texas legislation, because "it would clearly reduce whatever the benefits of competition are...and make consumers worse off." With their success in Texas, state medical societies will likely pursue similar legislation in other states. For example, the state legislature in Illinois is considering a bill that would grant an antitrust exemption to physicians and hospitals who seek to negotiate jointly with health plans. These state exemptions are particularly dangerous because they would protect physicians from federal antitrust enforcement as a result of the state exemption.

A Call to Action

These bills allow physicians to engage in collective activity that will limit choices to the detriment of consumers. The only tangible result of these laws may be to increase physician incomes at the expense of patient's access to care. ACNM members should speak out against these bills (both federal and state) by writing letters, sending e-mails and faxes, making phone calls and scheduling lobby visits. We cannot permit organized medicine to undermine the only protection we have against their continuous assault on the right of midwives to provide care to the women and families of this country.

Essential Documents

The ACNM has a new Resource Packet on Antitrust and Restraint of Trade issues, which provides comprehensive information on how ACNM members can use federal and state antitrust law to protect themselves from competitors seeking to restrain their trade. The packet offers an overview with some general advice, an evaluation tool, a list of questions to ask, suggested strategies for responding effectively, reporting information, a compendium of selected court cases, a sample letter, a bibliography of additional resources, a list of agencies to contact, and a glossary of terms. The packet is free and may be obtained by contacting Dayna Silberman at ACNM at 202-728-4713.

For additional ideas, contact Karen Fennell, ACNM Policy Analyst, at 202-728-9890