Illinois Medicaid payments, by many accounts, are substantially below reasonable remuneration and doctors taking Medicaid patients do so at their personal cost. Last month the Illinois Attorney General, Lisa Madigan, filed an antitrust action under the Illinois Antitrust Act against two physician groups representing ninety percent (90%) of the primary care market in Champaign County, Illinois for boycotting new Medicaid patients. The case, The People of the State of Illinois ex rel. Lisa Madigan v. Carle Clinic Association, P.C.; Christie Clinic, P.C. (No. 07h115) is pending in the Sixth Judicial Circuit, Campaign County, Illinois, and asserts two counts under the state statute, which makes it illegal to:
make any contract with, or engage in any combination or conspiracy with, any person who is, or but for a prior agreement would be, a competitor of such person:
a. for the purpose or with the effect of fixing, controlling or maintaining the price or rate charged for any commodity sold or bought by the parties thereto, or the fee charged or paid for any service performed or received by the parties thereto;
b. fixing, controlling, maintaining, limiting, or discontinuing the production, manufacture, mining, sale or supply of any commodity, or the sale or supply of any service, for the purpose or with the effect stated in paragraph a. of subsection (1).
The Attorney General in her complaint repeatedly refers to the intent to “raise” prices, not to maintain or control as set forth in the statute and may have some problems in enforcing the statute, but the evidence of an agreement to boycott seems strong, including the following:
• Executives for both clinics met in period prior to boycott in private meetings and at meetings of the Frances Nelson Health Center, a free clinic supported by both groups;
• The two groups adopted near identical restrictive policies regarding taking on Medicaid patients, so similar as to preclude coincidence;
• The two groups adopted near identical “scripts” for intake to turn away new Medicaid patients.
• Both groups stopped taking new Medicaid patients at about the same time.
What about the Thirteenth Amendment to the U.S. Constitution barring slavery? Can the government force private physicians to provide medical services at unacceptable rates? Well no, but state and federal governments can enforce antitrust laws precluding illegal agreements and combinations even in support of socially important objectives.
In F.T.C. v. Superior Court Trial Lawyers Association, 493 U.S. 411 (1990), the Supreme Court grappled with a similar issue.
In the District of Columbia Superior Court, indigent criminal defendants were generally represented by a panel of Criminal Justice Act lawyers receiving marginal and unacceptably low compensation. There were 1200 lawyers on the panel, but a group of 100 lawyers carried most of the water. The Trial Lawyers Association developed a “strike committee” in sympathy for the underpaid panelists and organized a refusal to accept appointments. Only 13 of the 100 CJA regulars continued to accept appointments leading to an effective shutdown of the justice system until the compensation rates were increased. The Administrative Law Judge hearing the complaint acknowledged the inappropriate conduct but ruled that “no harm” has been done.
Justice Stevens, writing for the majority, held that the boycott was per se illegal and not merely an “expressive boycott.” He indicated that even if the wisdom of the enforcement proceeding was questionable, even if the boycott supported a worthwhile but unpopular cause, even if the rates were unreasonably low and would not otherwise have been raised, the action remained a classic restraint of trade. He went on to say: "The social justifications proffered for respondent’s restraint of trade do not make it any less unlawful."
The minority, including Justices Brennan and Marshall, felt the decision impinged on the venerable tradition of expressive boycotts protected by the First Amendment. See Citizens Against Rent Control/Coalition for Fair Housing v. Berkeley, 454 U.S. 290 (1981). (“There are, of course, some activities, legal if engaged in by one, yet illegal if performed in concert with others, but political expression is not one of them.”)
In the Trial Lawyers case there was some debate as to whether the resultant increase was a product of the market power of the defendants or of political expression. It didn’t much matter in the end. Here the two clinic defendants collectively and individually have overwhelming market power and appear to have been unable to resist the temptations of collective action between them, even if the goals were laudable — not a wise move.
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