Why the Antitrust Laws Are Important in Dentistry
April 28, 2023
The various antitrust laws can seem unfair, complicated, and many times irrelevant to the practice of dentistry. However, these laws do apply. The U.S. Justice Department (DOJ) and the Federal Trade Commission (FTC) historically have been active in the health care industry. There have been many prosecutions of physicians and dentists for antitrust violations. These prosecutions have arisen from alleged joint contracting activities, joint refusals to deal, association advertising restrictions, etc. Since associations like the MDA have competing dentists as their members, the MDA’s activities are subject to the antitrust laws and DOJ and FTC action as well.
A basic understanding of the antitrust laws is therefore essential for all Michigan Dental Association members. The following is a brief description of what the antitrust laws prohibit and what you should avoid doing.
Requirements for violation
Specifically, the antitrust laws make contracts, combinations, or conspiracies in restraint of trade illegal. An action is illegal if:
- Two or more competitors (e.g., dentists not working for the same employer) have an agreement to engage in some joint activity.
- The agreement results in or has the effect of unreasonably restraining competition.
The agreement must be between two or more competitors. A completely integrated dental group practice is a single competitor. The simplest example of this is when several dentists all own and are employed by the same practice. However, it is possible for separate dental practices to be “integrated” such that the DOJ/FTC will consider them a single competitor. This is not easy to accomplish. The practices must be financially integrated (e.g., engage in risk sharing, split overall profits and losses, etc.) and clinically integrated (e.g., share patient outcome information, have common diagnosis and treatment protocols, etc.).
The “agreement” need not be formal or written. A tacit understanding is enough. Dentists do not need to know the agreement is illegal in order to violate the law. The key is to avoid even the appearance of an illegal agreement. For example, informal conversations with other dentists at a dental society meeting about problems incurred with a dental plan or insurer, which result in some dentists terminating their contracts with the plan or insurer, may be construed as an illegal agreement. A letter to another dentist that merely discusses fees may evidence an agreement or understanding to fix prices.
Read the complete article in the Journal of the Michigan Dental Association on page 28.
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