United States v. Health Choice of Northwest Missouri, Inc., et al.; Public Comments and Response on Proposed Final Judgment
Federal RegisterJun 12, 1996
Ask Donna
What actually matters in this document.
Text
[Federal Register Volume 61, Number 114 (Wednesday, June 12, 1996)]
[Notices]
[Pages 29800-29873]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-13754]
[[Page 29799]]
_______________________________________________________________________
Part II
Department of Justice
_______________________________________________________________________
Antitrust Division
_______________________________________________________________________
United States v. Health Choice of Northwest Missouri, Inc., et al.;
Public Comments and Response on Proposed Final Judgment; Notice
Federal Register / Vol. 61, No. 114 / Wednesday, June 12, 1996 /
Notices
[[Page 29800]]
DEPARTMENT OF JUSTICE
Antitrust Division
United States v. Health Choice of Northwest Missouri, Inc., et
al.; Public Comments and Response on Proposed Final Judgment
Pursuant to the Antitrust Procedures and Penalties Act, 15 U.S.C.
Sec. 16 (b)-(h), the United States publishes below the comments
received on the proposed Final Judgment in United States v. Health
Choice of Northwest Missouri, Inc., et al., Civil Action No. 95-6171-
CV-SJ-6, United States District Court for the Western District of
Missouri, together with the response of the United States to the
comments.
Copies of the response and the public comments are available on
request for inspection and copying in Room 215, Liberty Place Building,
Antitrust Division, U.S. Department of Justice, 325 Seventh Street,
NW., Washington, DC 20530, and for inspection at the Office of the
Clerk of the United States District Court for the Western District of
Missouri, 200 United States Courthouse, 811 Grand Avenue, Kansas City,
Missouri 64106.
Rebecca P. Dick,
Deputy Director, Office of Operations, Antitrust Division.
In the United States District Court for the Western District of
Missouri
United States of America, Plaintiff, vs. Health Choice of
Northwest Missouri, Inc., Heartland Health System, Inc., and St.
Joseph Physicians, Inc., Defendants. Case No. 95-6171-CV-SJ-6.
United States' Response to Public Comments
Pursuant to the requirements of the Antitrust Procedures and
Penalties Act, 15 U.S.C. Sec. 16 (b)-(h) (``Tunney Act''), the United
States hereby responds to the public comments received regarding the
proposed Final Judgment in this case.
I
Background
On September 13, 1995, the United States filed the Complaint in
this matter. The Complaint alleges that Defendants, in violation of
Section 1 of the Sherman Act, 15 U.S.C. Sec. 1, conspired to prevent
the development of competitive managed care health plans in Buchanan
County, Missouri by, among other things, negotiating fees on behalf of
most of the physicians in Buchanan County and forming an unlawfully
structured physician-hospital organization. Complaint Paras. 24 and 25.
Simultaneously with the filing of the Complaint, the United States
filed the proposed Final Judgment, a Competitive Impact Statement
(``CIS''), and a Stipulation signed by all the parties that allows for
entry of the Final Judgment following compliance with the Tunney Act.
The CIS explains in detail the provisions of the proposed Final
Judgment, the nature and purpose of these proceedings, and the
practices giving rise to the alleged violation.
As the Complaint and CIS explain, 85% of all the physicians living
or practicing in Buchanan County agreed to negotiate collectively fees
and other contract terms with managed care plans seeking to enter
Buchanan County, with the purpose and effect of increasing physician
fees and controlling the development of competitive managed care health
plans in Buchanan County. Together with the only hospital in Buchanan
County, they also formed Defendant Health Choice of Northwest Missouri,
Inc. (``Health Choice'') to provide managed care. At no time did the
competing physicians share financial risk or otherwise integrate their
practices.
Since the formation of Health Choice and until the filing of the
Complaint, no managed care plan had been able to enter Buchanan County
without contracting with Health Choice, despite the efforts of several
plans to do so. By refusing to deal with managed care plans seeking to
enter Buchanan County except through Health Choice, Defendant Heartland
System, Inc. (``Heartland'') and the physicians belonging to Defendant
St. Joseph Physicians, Inc. (``SJPI'') were able to obtain higher
compensation and a more favorable hospital utilization review program
from managed care plans than they would have been able to obtain
independently.
The overarching goal of the proposed Judgment is to prevent
Defendants from discouraging the development of competitive managed
care in Buchanan County, while still permitting defendants to market a
provider-controlled plan. The proposed Final Judgment consequently
deals with a wide range of activities.
Except for publishing the comments and this response in the Federal
Register, the plaintiff and defendants have completed the procedures
the Tunney Act requires before the proposed Final Judgment may be
entered.\1\ The 60-day period for public comments expired on December
4, 1995. As of March 27, 1996, the United States had received 155
comments.
---------------------------------------------------------------------------
\1\ The United States plans to publish the comments and this
response promptly in the Federal Register. It will provide the Court
with a Certificate Of Compliance With The Requirements Of The
Antitrust Procedures And Penalties Act and file a Motion For Entry
Of Final Judgment once publication is made.
---------------------------------------------------------------------------
The comments come from a variety of sources. The most comprehensive
comments were submitted by the Coalition for Quality Healthcare
(``Coalition''), which describes itself as a group of health care
providers and consumers in Northwest Missouri (Comments 19, 34 and
82).\2\ Another substantial comment is Comment 51, the comment of an
unnamed ancillary services provider (i.e., provider of home health
care, hospice care, outpatient rehabilitation services, or durable
medical equipment) located outside of Missouri. Nine comments were
submitted by Buchanan County citizens,\3\ in addition to 16 comments
from Buchanan County ancillary services providers.\4\ A total of 105
comments were submitted by either ancillary services providers' trade
associations or individual ancillary services providers located outside
of Buchanan County.\5\ Finally, 19 comments were submitted by hospitals
located outside of Buchanan County.\6\
---------------------------------------------------------------------------
\2\ The United States on January 19, 1996, numbered, indexed,
and lodged with the Court all 143 comments it had received as of
that date. For ease and convenience, the government in this Response
refers to individual comments by those assigned numbers. The
attached supplemental log lists the numbers assigned to the
additional 12 comments the United States received from January 19 to
March 27, 1996.
\3\ Comments 1, 7-8, 11, 15-16, 25, and 142-143.
\4\ Comments 3-6, 9-10, 12-14, 17-18, 20-21, 53, 151, and 155.
\5\ Comments 22-24, 26-27, 29-33, 36-40, 42-50, 52, 54-56, 60-
71, 74-81, 83, 85-128, 130-133, 136-141, 144, and 154.
\6\ Comments 28, 35, 57-59, 72-73, 84, 129, 134-135, 145-150,
and 152-153.
---------------------------------------------------------------------------
II
Response to Comments
A. Overview
None of the comments oppose the main provisions of the proposed
Final Judgment (Sections IV (C) and (D), V (C) and (D), and VI(B)).
Only one, Comment 41, suggests that the Judgment fails to redress the
violation of federal antitrust laws alleged in the Complaint. That
Comment, and one other dealing with the composition of the Health
Choice provider panel (Comment 2), are addressed in Subsection B below.
The remaining 153 comments relate almost exclusively to how the
proposed Final Judgment deals with Heartland's referral policy
regarding ancillary services, a copy of which is attached to the
proposed Final Judgment. Most of these comments urge that the ancillary
services referral policy should either be changed or deleted from the
Judgment.
[[Page 29801]]
They raise five different antitrust issues that are addressed in
Subsections C through G below.
Finally, Subsection H addresses the Coalition's contentions about
the provisions of the proposed Final Judgment limiting Heartland's
acquisition of physician practices (Comments 34 and 82). Subsection I
addresses the Coalition's objections to the Judgment's compliance
provisions (Id.).\7\
---------------------------------------------------------------------------
\7\ This Response addresses all of the antitrust issues and
issues relating to the substance of the Complaint and proposed Final
Judgment that are raised in the comments. Unrelated arguments and
objections are not discussed. For example, the nine comments from
private citizens in Buchanan County complain primarily about the
quality of services and billing practices of Heartland. These
complaints do not involve antitrust concerns, they are irrelevant to
this case, and the Antitrust Division of the United States
Department of Justice lacks authority to consider or address them.
---------------------------------------------------------------------------
B. The Provider Panel Provisions Adequately Protect Competition
Commenter David L. Hutchinson of East Lansing, Michigan, Comment
41, suggests that the proposed Final Judgment will not be effective in
allowing for the development of competitive managed care in Buchanan
County because the Judgment permits too many Buchanan County physicians
to participate on the Health Choice provider panel. In particular, Mr.
Hutchinson is concerned because ``Health Choice still retains 85% of
the physicians working or residing in the area, this is still a
monopoly because the remaining 15% will not be able to adequately
compete in the quantity of service which they provide.''
The United States agrees that there would be reason for concern if
85% of the physicians working or living in Buchanan County were owners
of a Buchanan County managed care plan that negotiated with payers. As
the CIS explains, the concern in such a situation is that there would
be an insufficient number of physicians remaining in the market with
the incentive to contract with competing managed care plans that might
seek to enter Buchanan County, or to form their own plans. CIS at 17.
This would likely increase the cost to consumers of obtaining health
care services in Buchanan County.
The proposed Final Judgment, however, does not permit such a
situation. The Defendants are not permitted to negotiate on behalf of
competing physicians unless they meet the requirements of a qualified
managed care plan. Proposed Final Judgment Sections IV (C) and (D), V
(C) and (D), and VI(B). As explained in the CIS (pages 16-17), in order
to satisfy those requirements, no more than 30% of the physicians in
any relevant market may be owners of the plan. Id., Section II(I)(2).
While the plan may, if it wishes, contract with more, or even all, of
the remaining doctors (as non-provider-owned managed care plans are
able to do), the plan may do that only if it is at risk for
overcharging or overutilization by those subcontracting physicians. Id.
This ensures that there will be a substantial pool of physicians in
Buchanan County who have the incentives to contract with, or form their
own, rival managed care plans in Buchanan County.\8\ See CIS at 17-19.
---------------------------------------------------------------------------
\8\ Comment 2, from Robert S. Keller, O.D. of St. Joseph,
Missouri, argues that the Health Choice provider panel violates
Medicare regulations by excluding optometrists. The proposed Final
Judgment, however, does not preclude Health Choice from having
optometrists or any other type of provider on its panel.
Furthermore, this issue has nothing to do with the antitrust
violation alleged in the Complaint, which the proposed Final
Judgment seeks to remedy.
---------------------------------------------------------------------------
C. The Referral Policy Provision Is Appropriate and Adequate Relief for
the Violation Alleges in the Complaint and Will Encourage, Not Impinge
Upon, Patient Choice
Heartland's ancillary services referral policy, with which
Heartland must comply under the proposed Final Judgment, essentially
requires Heartland representatives to inquire if the patient has a
choice of ancillary services providers and then to honor that choice.
The policy is designed to ensure that the patient has the opportunity
to use an ancillary services provider other than Heartland if the
patient so wishes. Many commenters contend that this referral policy is
not in the public interest because they believe other policies would
better ensure that patients will be able to make informed choices in
selecting ancillary services providers.
In opposing the referral policy of the proposed Final Judgment, the
Coalition contends that the policy, ``violates a consumer/patient's
right to make an informed choice among all ancillary services
providers'' and that it ``enhances Heartland's capacity to monopolize
the ancillary services market within Northwest Missouri and Northeast
Kansas.'' Comment 82 at 2. The Coalition urges that the referral policy
provision be deleted or, as an alternative, that the Court order
Heartland to adopt the model referral policy that the Coalition
developed after submitting its formal Comment (Comment 34) on November
21, 1995.\9\ The Coalition's model policy would require Heartland to
allow on its premises an ``ombudsman,'' whose ``salary and expenses
could be shared equally among the competitors (including Heartland), in
order to preserve the ombudsman's independence'' (Comment 82 at 17),
and who would ``operate[ ] as an independent social worker'' in order
to ``fully inform the patient of his options and see that the patient
is given the freedom to choose any ancillary services provider.''
(Comment 82 at Exhibit 9).
---------------------------------------------------------------------------
\9\ The Coalition's model referral policy appears as Exhibit 9
to the Memorandum In Opposition To Proposed Final Judgment appended
to the Coalition's December 1, 1995 Motion To Appear As Amicus
(Comment 82), which the government is addressing as a comment.
---------------------------------------------------------------------------
Clearly, deleting the proposed Judgment's referral policy would
weaken rather than strengthen the Judgment. Further, appointment of an
ombudsman paid for collectively by all ancillary services providers, a
novel remedy, is unnecessary here. Requiring Heartland to observe its
already promulgated policy regarding referrals for ancillary services,
which provides for ready access by patients to information about the
full range of ancillary services providers, is a wholly effective
remedy for the specific antitrust violation alleged in the Complaint
and well within the reaches of the public interest within the meaning
of the Tunney Act. Cf., United States v. Microsoft Corp., 56 F.3d,
1448, 1459-60 (D.C. Cir. 1995)(decree adequate if within reaches of
public interest).\10\
---------------------------------------------------------------------------
\10\ Many of the comments urged that the decree require
Heartland to use a rotation system by which referrals would be
distributed among Heartland and the other ancillary services
providers. Such a system would eliminate or reduce competition by
allocating patients and would raise serious antitrust concerns.
Palmer v. BRG, Inc., 498 U.S. 46; United States v. Heffernan, 43
F.3d 1144, 1146-47 (7th Cir. 1994) (Posner, J.) (bid rotation
agreement eliminates all competition among the participants and
hence is even more serious than price fixing, which preserves
competition in quality of service).
---------------------------------------------------------------------------
The Coalition is incorrect in asserting that the proposed Final
Judgment ``prevents patients from making an informed choice regarding
ancillary services.'' (Comment 82, Memorandum In Opposition To Proposed
Final Judgment, at 5, emphasis supplied). The proposed Final Judgment
requires that Heartland (1) must honor a physician's order of a
specific ancillary services provider unless the patient overrides that
decision, (2) must ask the patient if the patient has a preference for
an ancillary services provider and must honor any such preference, (3)
must not tell the patient about Heartland's ancillary services
providers unless the patient states he or she has no preference among
ancillary services providers, (4) must honor the patient's
[[Page 29802]]
choice if the patient decides not to use the Heartland ancillary
services providers, and, if asked, (5) must tell the patient that there
are non-Heartland ancillary services providers who are listed in the
telephone book, give the patient a reasonable amount of time to
investigate other options, and then honor whatever choice the patient
makes. If the patient again requests the names of other ancillary
services providers, Heartland must name those providers.\11\
---------------------------------------------------------------------------
\11\ Heartland's attorney has told us that Heartland is
considering adopting the attached revised referral policy.
Basically, that policy would have Heartland personnel provide a list
of Buchanan County ancillary services providers, rather than the
telephone book, to patients requesting information about non-
Heartland ancillary services providers. It also requires Heartland
to explain to a patient who is an enrollee in a managed care plan
the financial consequences to the patient of not using the plan's
preferred ancillary services provider. This revision contains
protections for Heartland patients in addition to those required by
the Final Judgment. Adoption of the revision would not violate the
Final Judgment and does not require amendment of the Final Judgment.
Implementation of the revision, given the presence of other
provisions in the proposed Final Judgment, would largely dispose of
the objections raised in Comments 23, 27, 52, 67, 79, 94, 98, 126,
and 138.
---------------------------------------------------------------------------
As numerous comments illustrate, there are myriad alternative
provisions that could be proposed to resolve the hospital ancillary
services referral issue. The government does not dispute that some of
these may be reasonable alternatives. That, however, is not a
sufficient reason to reject the negotiated settlement of this case,
which provides adequate and appropriate relief to remedy the violation
in this case and prevent its recurrence. Microsoft, 56 F.3d at 1460-61.
Significantly, the Complaint in this case did not charge Heartland
with specific violations in the ancillary services market. Rather, the
Complaint focuses on Heartland's efforts, along with the other
defendants, to impede the development of competitive managed care
health plans in Buchanan County. The ancillary services provision
(Section VII(B)(1)) in the proposed Final Judgment is intended as a
preventive measure to ensure that Heartland will follow its own
preexisting ancillary services referral policy so that it will not
abuse its market position in inpatient hospital services to restrict
competition in the market for ancillary services by deterring managed
care plans or other health care consumers from contracting with
alternative ancillary services providers.
Finally, at least one comment suggests that the referral policy
provision should be stricken from the Judgment because the Complaint
does not allege a specific violation involving ancillary services but
rather focuses more broadly on efforts to hamper the development of
managed care in Buchanan County. Comment 82 at 2, 16. There is no
requirement that the government's Complaint specifically mention
Heartland's ancillary services activities in order to include ancillary
services relief in the Final Judgment. Relief in a consent decree is
appropriate as long as it is within the general scope of the case.
Int'l Assn. of Firefighters v. City of Cleveland, 478 U.S. 501, 525
(1986).
The ancillary services provision of the proposed Final Judgment
will help to prevent the recurrence of collaborative efforts to
discourage the development of competitive managed care plans in
Buchanan County, which is specifically alleged in the Complaint, and in
the process also stop attempts to restrain competition in the provision
of ancillary services to patients who are either uninsured or covered
by other types of medical insurances. In particular, the ancillary
services provision ensures that Heartland will honor the decisions of
patients or their insurers regarding choice of ancillary services
providers.12
---------------------------------------------------------------------------
\12\ Several other provisions are also incorporated into the
proposed Final Judgment to ensure that patients and insurers are not
coerced into using Heartland's ancillary services. Section VI(E)
prohibits Heartland from forcing managed care plans in which
Heartland does not have a financial interest from using Heartland's
ancillary services in order to get Heartland's hospital services.
Also, Section VII(B)(3) allows the United States access to
Heartland's credentialing files to ascertain if Heartland has
curtailed the hospital privileges of a physician employed by or
affiliated with a competing managed care plan. The United States
could also ascertain if Heartland had limited hospital privileges of
a physician for ordering ancillary services from a vendor other than
Heartland for any patient.
---------------------------------------------------------------------------
D. The Referral Policy Provision Has No Preemptive Effect
Several commenters suggest that the ancillary services provision of
the proposed Final Judgment will have de jure or de facto preemptive
effect on other cases. This is not correct.
It is well established that ``a consent judgment, even one entered
at the behest of the Antitrust Division, does not immunize the
defendant from liability for actions, including those contemplated by
the decree, that violate the rights of nonparties.'' Broadcast Music,
Inc. v. Columbia Broadcasting System, Inc., 441 U.S. 1, 13 (1979).
Ancillary services providers and others consequently remain free to
pursue their own federal or state antitrust or other actions against
Heartland for any activity they believe is illegal, and they may seek
whatever remedy they deem appropriate. The ancillary services provision
in this matter, therefore, does not have any ``preemptive effect'' upon
the relief claimable by any plaintiff against Heartland or any other
hospital, and would not prevent a court, in an appropriate case, from
requiring different, or more expansive, relief.13
---------------------------------------------------------------------------
\13\ For example, the United States has been informed by the
Missouri Attorney General's Office that the Missouri Attorney
General is investigating Heartland's ancillary services referral
practices, and other practices, to determine their legality under
the Missouri Merchandising Practices Act, Sec. 407.020 RSMo, and the
Missouri Antitrust Law, Secs. 416.031 RSMo. The proposed Final
Judgment does not preclude or preempt any legal action by the
Missouri Attorney General, or by private parties, seeking broader
injunctive relief or different types of relief under either those
laws or the federal antitrust laws. Moreover, in agreeing to this
proposed Final Judgment, the United States does not express any view
as to whether any of the practices permitted by the Attachment to
the Final Judgment would be ``unfair'' within the meaning of the
Missouri Merchandising Practices Act, Sec. 407.020 RSMo.
---------------------------------------------------------------------------
The proposed Final Judgment also does not establish a national
ceiling, or even a ceiling in Buchanan County, on what can or may be in
a hospital ancillary services referral policy. The ancillary services
provision in the proposed Judgment is simply, on the facts and in the
procedural setting of this case, adequate relief to protect against the
possibility that Heartland could use its market position in inpatient
services to restrict competition in the market for ancillary services.
E. Heartland May Comply With Federal or State Laws or Further Protect
the Patient's Right To Choose
Several commenters have suggested that the ancillary services
provision of the proposed Final Judgment conflicts with hospital
accreditation standards and various federal and state laws and
regulations.14 There have also been claims that the proposed Final
Judgment precludes Heartland from adopting additional measures intended
to assist Heartland patients in choosing ancillary services providers.
None of these claims and suggestions is correct.
---------------------------------------------------------------------------
\14\ The Coalition, for example, asserts that the ancillary
services provision of the proposed Final Judgment is inconsistent
with hospital accreditation standards and Medicare regulations,
primarily because ``Heartland's referral policy does not allow
ancillary services providers, who have an established relationship
with the patient before admission to Heartland's acute care
hospital, to participate in discharge planning for their patients.-
.-.-.'' (Comment 82 at 13).
---------------------------------------------------------------------------
Section VII(B)(1) of the proposed Final Judgment requires only
those steps needed to correct or prevent competitive problems alleged
or similar to those alleged in the Complaint. Heartland in addition is
independently obligated to comply with hospital accreditation
standards, Medicare regulations, state or federal laws, or the
[[Page 29803]]
decrees in other state or federal law suits, including, if necessary,
permitting outside ancillary services providers to participate in
patient discharge planning. Moreover, as far as the government has been
able to determine, nothing in the Heartland ancillary services referral
policy, with which Section VII(B) of the proposed Final Judgment
requires Heartland to comply, requires Heartland to do anything that
any hospital accreditation standard or any federal or state statute,
rule, or regulation of which the United States is aware prohibits. (See
attached Joint Commission For Accreditation Of Healthcare Organizations
accreditation standards and Medicare patient discharge planning
regulations).
F. The Referral Policy Does Not Harm Heartland's Rivals or Buchanan
County Consumers
The Coalition also contends that the referral provision will lead
to a deterioration of competition in the provision of ancillary
services in Buchanan County. E.g., Comment 82 at 3-4, 10-13. But these
contentions assume that before the proposed Final Judgment was
negotiated, Heartland was following an ancillary services referral
policy that was more favorable to competing providers than the policy
put in place by the Final Judgment. In fact, the government's
investigation revealed that Heartland, before accepting the proposed
Final Judgment, may not have always been in compliance with its stated
policy.\15\ Coalition members and Buchanan County citizens will be
better, not worse, off as a result of the proposed Final Judgment since
the Judgment will now ensure compliance.
---------------------------------------------------------------------------
\15\ This may be why Heartland's ancillary services rivals lost
referrals. See Comment 82 at 12-13. If so, the proposed Final
Judgment will correct the problem. Of course, another explanation
for this loss of referrals may be that Heartland began offering
better care and service, i.e., that it was successfully competing on
the merits. This would be lawful competition properly left in place
by the proposed Final Judgment. Cargill, Inc. v. Monfort, Inc., 479
U.S. 104, 116 (1986).
---------------------------------------------------------------------------
Microsoft, supra, recently noted in a strikingly similar context
that ``[w]hile the district court may inquire into whether a decree
will result in any positive injury to third parties * * *, in the
absence of such injury, it should not reject an otherwise adequate
remedy simply because a third party claims it could be better
treated.'' 56 F.3d at 1461 n.9 (emphasis supplied). There was no
positive injury to third parties in Microsoft, and there is none in the
present case. In fact, competitors and consumers are benefited by the
proposed Final Judgment.
G. The Ancillary Services Relief is Consistent With the Federal
Antitrust Laws
Comment 51 suggests more explicitly than any of the other comments
that the Heartland Referral Policy, which Section VII(B)(1) of the
proposed Final Judgment requires Heartland to follow, is inconsistent
with the federal antitrust laws, and more particularly, with Key
Enterprises, Inc. v. Venice Hospital, 919 F.2d 1550 (11th Cir. 1990),
vacated, reh'g en banc granted, 979 F.2d 806 (11th Cir. 1992), order
granting en banc review vacated, 9 F.3d 893 (11th Cir. 1993 (per
curiam), cert. denied sub nom. Sammett Corp. v. Key Enterprises,
Inc.,__U.S.__, 114 S.Ct. 2132 (1994). Relying on the later-vacated Key
Enterprises decision, this comment contends that Heartland should be
required to disseminate information about its ancillary services
competitors, and to allow such competitors access to Heartland's
hospital patients. Anything less would be, in the words of the Comment,
``inconsistent with federal antitrust policy. * * *'' Comment 51 at 2.
The ancillary services provision of the proposed Final Judgment is
consistent with both the federal antitrust laws and Key Enterprises.
Key Enterprises was never finally resolved by the courts. A panel of
the Court of Appeals reversed a trial court order that had overturned a
$2.3 million jury verdict in favor of a durable medical equipment
supplier who claimed that a hospital with 76% of the available beds in
a local market had violated Sections 1 and 2 of the Sherman Act by
coercing or unduly influencing home health agencies in that community
to refer their patients to a durable medical equipment supplier in
which the hospital had a financial interest. 919 F.2d at 1553, 1555.
Significantly, no injunctive or other equitable relief was at issue in
Key Enterprises. The case was vacated after the Eleventh Circuit
granted rehearing en banc and then settled prior to en banc review.\16\
---------------------------------------------------------------------------
\16\ At least four courts have refused to consider Key
Enterprises because it has been vacated: Pacifica Kidney Center,
Inc. v. National Medical Care, Inc., 1993 WL 190858 (9th Cir. 1993)
(unpublished disposition) at **4 n. 3; Home Health Specialists, Inc.
v. Liberty Health System, 1994-2 Trade Cas. para. 70,699 (E.D. Pa.
1994) at p. 72,794; Atlanta Pulmonary Diagnostic Clinic v. Haynes,
1994 WL 258260 (N.D. Ga. 1994); and Northwest Title And Escrow Corp.
v. Edina Realty, Inc., 1994-1 Trade Cas. para. 70,485 (D. Minn.
1993).
---------------------------------------------------------------------------
Moreover, as noted earlier, this case is not about ancillary
services markets. Heartland was not charged with restraining trade in
or monopolizing any ancillary services market. Rather, Heartland was
charged with conspiring with physicians to discourage the development
of competitive managed care in Buchanan County. The ancillary services
provision of the proposed Final Judgment is prophylactic, intended
simply to prevent Heartland from exploiting its position in additional
ways. The provision is effective and well within the bounds of the
public interest. Nothing in Key Enterprises or any other decision
requires this Judgment to contain any more relief than it does.
H. The Physician Practices Acquisitions Provisions are Adequate To
Remedy the Violation Alleged in the Complaint
The Coalition criticizes the provisions of the proposed Final
Judgment that place limits and controls on Heartland's acquisition of
physician practices. Comment 34 at 6; Comment 82 at 18-19. The
Coalition argues that ``the practical effect'' of three of those
provisions, Sections VIII(B)-(D), will be to allow Heartland to
``monopolize the market for primary care physicians in Northwest
Missouri and Northeast Kansas. * * *'' Comment 82 at 19.
The Judgment's physician practices acquisitions provisions,
Sections VI(D) and VIII(B)-(D) of the decree, are, in conjunction with
the physician credentialing provision of the proposed Final Judgment
(Section VII(B)(3)), sufficient to ensure the development of conditions
that permit the growth of competitive managed care in Buchanan County.
They certainly will not promote the monopolization of primary care
physician services in Northwest Missouri or Northeast Kansas.
Section VI(D) is the primary provision in the proposed Final
Judgment regarding physician practices acquisitions. CIS at 20. It
enjoins Heartland from acquiring during the next five years additional
existing family practice and general internal medicine physician
practices in Buchanan County without the prior written approval of the
United States, and from acquiring any other existing active physician
practice in Buchanan county without 90 days' prior notification.
Section VI(D) was designed to, and will, prevent Heartland from
obtaining control of so many physicians that it could raise prices for
physician services above competitive levels or otherwise thwart
competing managed care plans from entering and competing effectively in
Buchanan County.
Sections VIII(B)-(D) set forth the exceptions to Section VI(D).
Section VIII(B) allows Heartland to acquire the practice of a physician
who derives only limited revenues (less than 20% of total
[[Page 29804]]
practice revenues) from patients in Buchanan County (i.e., the
established physician working primarily outside of Buchanan County and
hence whose practice has little competitive impact in Buchanan County).
Section VIII(C) allows Heartland to acquire within the first two years
of a physician's arrival in Buchanan County the practice of any
physician who Heartland actively recruited to Buchanan County (i.e.,
the new physician who would not have come to Buchanan County but for
Heartland and whose practice is not yet sufficiently established to
have an independent competitive impact on the market). Section VIII(D)
allows Heartland to acquire the practice of any family practice or
general internal medicine physician already in Buchanan County who
otherwise would no longer practice primary care medicine in Buchanan
County (i.e., the established physician working primarily in Buchanan
County whose practice may have a significant independent competitive
impact on the market but who is otherwise going to exit the market).
None of these three limited exceptions will result in the
monopolization or a substantial lessening of competition in the
physician services market in Buchanan County. Rather, Sections VI(D)
and VIII (B)-(D), in conjunction with the physician credentialing
provision (Section VII(B)(3)), will ensure that Heartland does not
achieve by acquisition or credentialing the anticompetitive result
(preventing the development of competitive managed care) that it
initially sought to accomplish through agreement with the physicians of
Buchanan County, and which is at the heart of the antitrust violation
alleged in the Complaint. These provisions will result, at least for
the near future, in the continued presence, if not the increase, of a
substantial pool of primary care and other physicians not employed by
Heartland in Buchanan County.\17\
---------------------------------------------------------------------------
\17\ By its terms, this provision would not apply if any firm
other than Heartland made a bona fide offer to purchase the practice
for a price above the liquidation value of the practice. 4 CCH Trade
Reg. Rpt. para.13,104 at 20,574.
---------------------------------------------------------------------------
That continuing pool of primary care and other physicians not
employed by Heartland will also protect competition in ancillary
services markets in Buchanan County. Comment 34 at 2, 5, 6; Comment 82
at 19. The Coalition correctly notes that many hospitalized patients
look to their physician to recommend an ancillary services provider.
Comment 34 at 2. There is consequently likely to remain during the term
of this Judgment a substantial stream of ancillary services referrals
from doctors who are not employed by Heartland and who therefore will
not automatically refer their patients to Heartland's ancillary
services providers.
Furthermore, the referral policy with which Heartland must comply
(Section VII(B)(1) of the decree) will significantly curtail any
adverse impact on competition in ancillary services in Buchanan County
from possible future Heartland purchases of Buchanan County physician
practices. The policy specifically requires Heartland to ask, and
honor, a hospitalized patient's choice of ancillary services provider.
Heartland must do that even if the patient's choice is different from
the doctor's and the doctor is an employee of Heartland.
The Coalition also suggests that the proposed Final Judgment is
deficient because it does not prohibit Heartland from bringing into
Buchanan County a physician who has not previously practiced there.
Comment 34 at 6; Comment 82 at 18. By increasing the supply of
physicians in Buchanan County, such conduct could be procompetitive.
The proposed Final Judgment therefore does not proscribe this activity.
The United States, moreover, remains free to challenge such actions in
the future in a separate, independent antitrust action if this activity
should prove to be anticompetitive.
I. The Compliance Provisions Are Sufficient
The Coalition also believes that two of the compliance provisions
of the proposed Final Judgment, Sections X and XI, should be modified
to (1) require the defendants to submit written reports and the United
States to conduct at least annual inspections, and (2) give the Court
broader powers to monitor and enforce the Judgment as Judge Oliver
required in United States v. Associated Milk Producers, Inc., 394 F.
Supp. 29, 46 (W.D. Mo. 1975). Comment 34 at 7; Comment 82 at 19-20. The
United States believes that the compliance provisions of the proposed
Final Judgment as they now stand are fully adequate to deter, detect,
and correct any decree violations.
Sections X and XI of the proposed Final Judgment are standard
judgment compliance provisions that the government has used repeatedly
in its consent decrees and litigated judgments over the 20 years since
Associated Milk Producers was entered. They include the requirement
that Defendants obtain from their appropriate personnel, and maintain
for the government's inspection, annual written certifications that
each such person (1) has read and agrees to abide by the Judgment, (2)
understands that noncompliance with the Judgment may result in criminal
contempt of court, and (3) has reported any violation of the Judgment
to counsel for that Defendant.\18\ Furthermore, Section XII of the
proposed Final Judgment, another standard decree compliance provision,
allows the government to (1) inspect and copy records or documents of
any of the Defendants relating to matters contained in the Judgment,
(2) interview personnel of any of the Defendants about such matters,
and (3) require any of the Defendants to submit written reports, under
oath if necessary, about any such matter.
---------------------------------------------------------------------------
\18\ The Associated Milk Producers decree, even as supplemented
by Judge Oliver, did not contain this provision. 394 F. Supp. at 49-
58.
---------------------------------------------------------------------------
The commenters do not suggest that these customary judgment
compliance provisions have been inadequate to uncover and remedy decree
violations in the government's earlier judgments. Nor do they offer any
reason to expect a different result here.\19\ The government will not
hesitate, as the proposed Final Judgment permits (Section IX), to seek
a modification of Sections X and XI if these provisions in practice
prove to be inadequate to properly enforce this decree.
---------------------------------------------------------------------------
\19\ Indeed, Judge Oliver in a subsequent government antitrust
consent decree did not order these supplemental provisions. United
States v. Mid-American Dairymen, Inc., 1977-1 Trade Case. para.
61,508 (W.D.Mo. 1977).
---------------------------------------------------------------------------
III
The Legal Standard Government the Court's Public Interest Determination
Once the United States moves for entry of the proposed Final
Judgment, the Tunney Act directs the Court to determine whether entry
of the proposed Final Judgment ``is in the public interest.'' 15 U.S.C.
Sec. 16(e). In making that determination, ``the court's function is not
to determine whether the resulting array of rights and liabilities is
one that will best serve society, but only to confirm that the
resulting settlement is within the reaches of the public interest.''
United States v. Western Elec. Co., 933 F.2d 1572, 1576 (D.C. Cir.),
cert. denied, 114 S. Ct.487 (1993) (emphasis added, internal quotation
and citation omitted).\20\ The Court should evaluate the relief set
forth in the proposed Final Judgment and should enter the Judgment if
it falls within the
[[Page 29805]]
government's ``rather broad discretion to settle with the defendant
within the reaches of the public interest.'' Microsoft, 56 F.3d at
1461. Accord, Associated Milk Producers, 534 F.2d at 117-18.
---------------------------------------------------------------------------
\20\ The Western Electric decision concerned a consensual
modification of an existing antitrust decree. The Court of Appeals
assumed that the Tunney Act was applicable.
---------------------------------------------------------------------------
The Court is not ``to make de novo determination of facts and
issues.'' Western Elec., 993 F.2d at 1577. Rather, ``[t]he balancing of
competing social and political interests affected by a proposed
antitrust decree must be left, in the first instance, to the discretion
of the Attorney General.'' Id. (internal quotation and citation omitted
throughout). In particular, the Court must defer to the Department's
assessment of likely competitive consequences, which it may reject
``only if it has exceptional confidence that adverse antitrust
consequences will result--perhaps akin to the confidence that would
justify a court in overturning the predictive judgments of an
administrative agency.'' Id.\21\
---------------------------------------------------------------------------
\21\ The Tunney Act does not give a court authority to impose
different terms on the parties. See, e.g., United States v. American
Tel. & Tel. Co., 552 F. Supp. 131, 153 n. 95 (D.D.C. 1982), aff'd
sub nom. Maryland v. United States, 460 U.S. 1001 (1983) (Mem.);
accord H.R. Rep. No. 1463, 93d Cong., 2d Sess. 8 (1974). A court, of
course, can condition entry of a decree on the parties' agreement to
a different bargain, see, e.g., AT&T, 552 F. Supp. at 225, but if
the parties do not agree to such terms, the court's only choices are
to enter and decree the parties proposed or to leave the parties to
litigate.
---------------------------------------------------------------------------
The Court may not reject a decree simply ``because a third party
claims it could be better treated.'' Microsoft, 56 F. 3d at 1461 n.9.
The Tunney Act does not empower the Court to reject the remedies in the
proposed Final Judgment based on the belief that ``other remedies were
preferable.'' Id. at 1460.\22\ As Judge Greene has observed:
\22\ Citing United States v. Central Contracting Co., 537 F.
Supp. 571 (E.D.Va. 1982), the Coalition wrote the government in
November 1995 and requested all ``determinative'' materials and
documents called for by 15 U.S.C. Sec. 16(b) (Comment 19). The
United States replied that there are no such materials or documents.
The Coalition suggests in Comment 82 that this response shows that
``the DOJ has not been forthcoming with disclosure of the underlying
factual materials supporting the proposed policy.'' Memorandum In
Opposition To Proposed Final Judgment at 5. The Coalition suggests,
apparently because of Associated Milk Producers, that the
government's response requires the Court to make a more careful
review in this instance than might otherwise be the case. This
approach is unwarranted in the present matter even if the
Coalition's reading of Associated Milk Producers is correct. Here
there simply are no documents which, either along or as a group,
have such singular or particularized significance as to be
``determinative'' under 15 U.S.C. Sec. 16(b). The Coalition is
incorrect in suggesting that the Department never produces
determinative documents. The Department has done so in 19 cases
since the Central Contracting decision.
---------------------------------------------------------------------------
If courts acting under the Tunney Act disapproved proposed
consent decrees merely because they did not contain the exact relief
which the court would have imposed after a finding of liability,
defendants would have no incentive to consent to judgment and this
element of compromise would be destroyed. The consent decree would
thus as a practical matter be eliminated as an antitrust enforcement
tool, despite Congress' directive that it be preserved.
United States v. American Tel. & Tel. Co., 552 F. Supp. 131, 151
(D.D.C. 1982), aff'd sub nom. Maryland v. United States, 460 U.S. 1001
(1983) (Mem.).
Moreover, as noted above, the entry of a governmental antitrust
decree forecloses no private party from seeking and obtaining
appropriate antitrust remedies. Thus, Defendants will remain liable for
any illegal acts, and any private party may challenge such conduct if
and when appropriate. If any of the commenting parties has a basis for
suing Defendants, they may do so. The legal precedent discussed above
holds that the scope of a Tunney Act proceeding is limited to whether
entry of this particular proposed Final Judgment, agreed to by the
parties as settlement of this case, is in the public interest.
Finally, the Tunney Act does not contemplate judicial reevaluation
of the wisdom of the government's determination of which violations to
allege in the Complaint. The government's decision not to bring a
particular case on the facts and law before it at a particular time,
like any other decision not to prosecute, ``involves a complicated
balancing of a number of factors which are peculiarly within [the
government's] expertise.'' Heckler v. Chaney, 470 U.S. 821, 831 (1985).
Thus, the Court may not look beyond the Complaint ``to evaluate claims
that the government did not make and to inquire as to why they were not
made.'' Microsoft, 56 F.3d at 1459 (emphasis in original); See also,
United States v. Associated Milk Producers, Inc., 534 F.2d 113, 117-18
(8th Cir. 1976), cert. denied, 429 U.S. 940 (1976).
Similarly, the government has wide discretion within the reaches of
the public interest to resolve potential litigation. E.g., United
States v. Western Elec. Co., 993 F.2d 1572 (D.C. Cir.), cert. denied,
114 S. Ct. 487 (1993); United States v. American Tel. & Tel. Co., 552
F. Supp. 131, 151 (D.D.C. 1982), aff'd sub nom. Maryland v. United
States, 460 U.S. 1001 (1983) (Mem.). The Supreme Court has recognized
that a government antitrust consent decree is a contract between the
parties to settle their disputes and differences, United States v. ITT
Continental Baking Co., 420 U.S. 223, 235-38 (1975), United States v.
Armour & Co., 402 U.S. 673, 681-82 (1971), and ``normally embodies a
compromise; in exchange for the saving of cost and elimination of risk,
the parties each give up something they might have won had they
proceeded with the litigation.'' Armour, 402 U.S. at 681.
The ancillary services provision (Section VII(B)(1)) in the
proposed Final Judgment is a preventive measure to protect against the
possibility that Heartland could abuse its market position in inpatient
hospital services to restrict competition in the market for ancillary
services by deterring managed care plans or other heath care consumers
form contracting with alternative ancillary services providers.\23\
This Judgment has the virtue of bringing the public certain benefits
and protection without the uncertainty and expense of protracted
litigation. Armour, 402 U.S. at 681; Microsoft, 56 F. 3d at 1459.
---------------------------------------------------------------------------
\23\ Managed care plans in general are making greater use of
competition among ancillary services providers to reduce premium
costs and to reduce the number and duration of hospitalizations.
See, e.g., K. O'Donnell & E. Sampson, ``Home Health Care: The
Pivotal Link In The Creation Of A New Health Care Delivery System,
Journal of Health Care Finance, Volume 21, No. 2, pages 74-86
(1994); and G. Leavenworth, ``The Fastest Growing Segment Of The
Health Care Industry Combines Cost-Effective, High--Quality Care
With The Comforts Of Home,'' Business & Health, vol. 13, special
issue, p. 51 (Jan. 1995).
---------------------------------------------------------------------------
IV
Conclusion
After careful consideration of these comments, the United States
concludes that entry of the proposed Final Judgment will provide an
effective and appropriate remedy for the antitrust violation alleged in
the Complaint and is in the public interest. The United States will
therefore move the Court to enter the proposed Final Judgment once, as
15 U.S.C. Sec. 16(d) requires, the public comments and this Response
have been published in the Federal Register.
Dated: May 17, 1996.
Respectfully submitted,
[[Page 29806]]
----------------------------------------------------------------------
Allen S. Vanbebber,
Deputy United States Attorney, Western District of Missouri, Suite
2300, 1201 Walnut Street, Kansas City, Missouri 64106-2149, Tel: (816)
426-3122.
----------------------------------------------------------------------
Edward D. Eliasberg, Jr.,
Gregory S. Asciolla,
Attorneys, Antitrust Division, U.S. Dept. of Justice, Room 414, 325 7th
Street, N.W., Washington, DC 20530, Tel: (202) 307-0808.
Certificate of Service
I, Edward D. Eliasberg, Jr., hereby certify that copies of the
Response to Public Comments in U.S. v. Health Choice of Northwest
Missouri, Inc., et al., was served on the 17th day of May 1996 by first
class mail to counsel as follows:
Thomas D. Watkins, Esquire, Watkins, Boulware, Lucas, Miner, Murphy &
Taylor, 3101 Frederick Avenue, St. Joseph, Missouri 64506-0217
George E. Leonard, Esquire, Shugart, Thomson & Kilroy, 12 Wyandotte
Plaza, 120 West 12th Street, Kansas City, Missouri 64105-0509
Richard D. Raksin, Esquire, Sidley & Austin, One First National Plaza,
Chicago, Illinois 60603
Jack Briggs, Health Choice of Northwest Missouri, Inc., 510 Francis
Street, St. Joseph, Missouri 64501
Brian B. Myers, Esquire, Lathrop & Norquist, 2345 Grand Avenue, Suite
2600, Kansas City, Missouri 64108
Thomas M. Bradshaw, Esquire, Dianne M. Hansen, Esquire, Armstrong,
Teasdale, Schlafly & Davis, Suite 2000, 2345 Grand Boulevard, Kansas
City, Missouri 64108
Glenn E. Davis, Esquire, Diane E. Felix, Esquire, Armstrong, Teasdale,
Schlafly & Davis, One Metropolitan Square, Suite 2600, St. Louis,
Missouri 63102-2704
----------------------------------------------------------------------
Edward D. Eliasberg, Jr.
Hospital Inpatient--Ancillary Services Referral Policy
I. General Statement
After a patient or other appropriate person (collectively,
``patient'') has been identified (via screening, assessment, discharge
planning, staff, family, physician, or other means) as being in need of
appropriate home health, hospice, DME, or outpatient rehabilitation
services (referred to collectively as ``Ancillary Service''), and, if
necessary, a physician's order has been obtained, the following
procedures will be used by a non-physician referring person when
connecting patients to the appropriate Ancillary Service. Our focus is
on patient choice.
II. Service Referrals
A. If a physician orders an Ancillary Service and specifies the
provider to be used (whether specifically written in the chart or other
written notification), then a referring person shall contact the
patient indicating that the physician has ordered an Ancillary Service
and has ordered that a particular provider be used. If necessary, the
patient should be informed of any financial considerations (i.e.,
managed care). The patient should then be asked whether the particular
provider is acceptable, and if so, referred to that provider. (If the
patient does not wish that provider, see subsection B below).
B. If a physician orders an Ancillary Service, but does not specify
the provider to use, then the patient shall be contacted and informed
that his physician has ordered an Ancillary Service; if necessary, the
patient should be informed of any financial considerations (i.e.,
managed care); and the patient shall be asked if he has a preference as
to which provider to use:
1. If the patient has a preference, that preference shall be
honored.
2. If the patient has no preference, a referring person shall
indicate that Heartland has an excellent, full accredited Ancillary
Service that is available to the patient, and the appropriate Heartland
brochure may be given. If the patient accepts, then the referral shall
be made to Heartland's Ancillary Service.
3. If the patient has not accepted Heartland's Ancillary Service
(see subsection B(2) above), or asks what other providers are
available, a referring person shall state that there are other
providers in the community that may offer the Ancillary Service, and
provide the patient with the list of providers attached. If
appropriate, this list may be provided verbally. [PATIENT SHALL BE
GIVEN A REASONABLE AMOUNT OF TIME TO INVESTIGATE OTHER OPTIONS.] If the
patient at this point chooses a provider, that choice shall be noted on
the patient's chart and the referral made to the provider chosen.
Copies of the Comments and the United States' Response to Public
Comments, with all omitted attachments, are available for inspection in
Room 200, Liberty Place, (202/514-2481), United States Department of
Justice, Washington, DC and at the Office of the Clerk of the United
States District Court for the District of Western Missouri, Kansas
City, Missouri.
Lodging of Public Comments Regarding Proposed Final Judgment
United States of America, Plaintiff, vs. Health Choice of
Northwest Missouri, Inc., Heartland Health System, Inc., and St.
Joseph Physicians, Inc., Defendants. Case No. 95-6171-CV-SJ-6.
Pursuant to the Antitrust Procedures and Penalties Act, 15 U.S.C.
Secs. 16 (b)-(h) (``Tunney Act''), Plaintiff United States of America
hereby lodges with the Court the comments the government has received
to date from the public regarding the Proposed Final Judgment in this
case.
Attached to this pleading is a log listing for each comment the
date the government received the comment, the date of the comment, the
name and address, if available, of the commenter, the number of pages,
and a brief description of the comment.
As the log indicates, the government received six comments in which
the commenter requested anonymity. While those comments have been
described in the log, five of those comments have been returned to
their authors. The government has explained to those authors by means
of accompanying transmittal letters that comments in Tunney Act
proceedings become part of the public record. The government has
invited each of these authors either promptly to submit a revised
comment not disclosing the author's identity or to resubmit the
original comment if the author no longer objects to public disclosure
of the author's identity.
The sixth comment is an anonymous handwritten letter without return
address in which the author's supervisor at Defendant Heartland Health
System, Inc. is specifically named and claimed to be the primary cause
of the problems in this matter. That comment will not be made available
to the public unless the Court desires the government to do so.
The government anticipates that it soon will be filing its response
to all the comments, as required by the Tunney Act, 15 U.S.C.
Sec. 16(d).
Dated: January 19, 1996.
Respectfully submitted,
[[Page 29807]]
----------------------------------------------------------------------
Alleen S. Vanbebber,
Deputy United States Attorney, Western District of Missouri, Suite
2300, 1201 Walnut Street, Kansas City, Missouri 64106-2149, Tel: (816)
426-3122.
----------------------------------------------------------------------
Edward D. Eliasberg, Jr.,
Gregory S. Asciolla,
Attorneys, Antitrust Division, U.S. Dept. of Justice, Room 9422, 600 E
Street, NW., Washington, DC 20530, Tel: (202) 307-0808.
Certificate of Service
I, Edward D. Eliasberg Jr., hereby certify that a copy of the
foregoing document was served on the 19th day of January 1996 by first
class mail to counsel as follows:
Thomas D. Watkins, Esquire, Watkins, Boulware, Lucas, Miner, Murphy &
Taylor, 3101 Frederick Avenue, St. Joseph, Missouri 64506-0217
George E. Leonard, Esquire, Shugart, Thomson & Kilroy, 12 Wyandotte
Plaza, 120 West 12th Street, Kansas City, Missouri 64105-0509
Richard D. Raskin, Esquire, Sidley & Austin, One First National Plaza,
Chicago, Illinois 60603
Jack Briggs, Health Choice of Northwest Missouri Inc., 510 Francis
Street, St. Joseph, Missouri 64501
Brian B. Myers, Lathrop & Norquist, 2345 Grand Avenue, Suite 2600,
Kansas City, Missouri 64108
Thomas M. Bradshaw, Esquire, Dianne M. Hansen, Esquire, Armstrong,
Teasdale, Schlafly & Davis, 1700 City Center Square, 1100 Main Street,
Kansas City, Missouri 64105
Glenn E. Davis, Esquire, Dianne E. Felix, Esquire, Armstrong, Teasdale,
Schlafly & Davis, One Metropolitan Square, Suite 2600, St. Louis,
Missouri 63102-2704
----------------------------------------------------------------------
Edward D. Eliasberg Jr.
Note: The following list indicates where tables, newspaper
articles and attachments have been taken out, you can obtain copies
of these complete documents in our Department of Justice, Premerger
Office, Liberty Place Building, ATR Division, Room 215, 325 Seventh
Street, NW., Washington, DC 20530.
1. Sept. 26, 1995 letter from Robert S. Keller, O.D.
2. Letter from the Administrator of St. Joseph Nursing Home
3. Anonymous note (had newspaper articles)
4. Mark L. Wyble, Coordinator, Patient & Community Relations from Total
Home Health Care
5. Oct. 3, 1995 from Citadel Health Care, written by Lowell Fox,
Administrator
6. Nov. 4, 1995 letter from Richard C. Bosworth, R.Ph., Coalition of
Quality Health Care
7. Nov. 20, 1995 letter, Hill Country Health Services, Inc., from Ron
Julian, Administrator.
8. Nov. 19, 1995 letter, from Dennis O. Davidson, M.D.
9. Nov. 23, 1995, Home Health Insights, Inc., from Ross Feezer
10. Nov. 27, 1995, Shepard's Crook Nursing Agency, Inc., from Suzanne
Wilkinson, Administrator/Owner
11. Nov. 27, 1995, Metro Home Health Care Services, Inc., from Richard
A. Porter, President/Administrator
12. Nov. 29, 1995, Kevin Miller, RRT, RCP
13. Dec. 4, 1995, Gibson Health Services, from Patricia A. Gibson, RN,
MPH
14. Dec. 4, 1995, Heritage Home Health Inc., from Matthew F. Komac
15. Nov. 21, 1995, Metro Home Health Care Services, Inc. from Richard
A. Porter
16. Anonymous letter (had clippings)
17. Feb 28, 1996, Missouri Alliance for Home Care, from Dale E. Smith
September 26, 1995.
Gail Kursh,
Chief, Prof. & Intellectual Prop. Section/Health Care Task Force
Dear Ms. Kursh: I am grateful for the opportunity of writing to
you regarding my concerns with reference to Heartland Health Systems
here in St. Joseph.
I am a retired Senior Citizen and a patient of a Dr. in the
group aligned with the hospital. I like my Dr. but don't approve of
the monopoly the hospital has over the Dr.'s services as well as
options given to the patients in several areas. Also, I understand
the referral to specialists is down-sized. The Pres. of the hospital
was quoted as saying ``he was not being paid to be stupid,'' but he
is being paid to have integrity and high standard of morals.
Yours truly,
Helen Kadera
P.S. I with so many, many others are grateful that this
situation is being investigated.
Optometry
Dr. Joyce Keller Stroud
Dr. Robert S. Keller
3605 Faraon Street, St. Joseph, Missouri 64506, Telephone (816) 364-
2000
26 September 1995.
Gail Kursh,
Chief, Intellectual Prop. Section, Health Care Antitrust, U.S. Dept.
of Justice, 600 E. St. N.W., Room 9300, Washington, D.C. 20530
Dear Ms. Kursh: It is my hope that you have received a copy of
the St. Joseph News Press of 24 September 1995.
I want to point out that the Heartland Hospital new HMO, called
Community Health Plan, is excluding Optometry in providing eye
health care to its members.
I refer to total eye health, with the exception of surgery.
Optometrists can treat most eye health conditions and recently in
Missouri, that included glaucoma.
Since 28 August 1995, I have sought an opportunity to appear
before the Board of Community Health Plan to point out that Medicare
and Medicaid utilize the services of Optometry to the fullest extent
of their licensure.
Enclosed is a copy of the regulations defining the scope of the
various professions. Heartland is in the process of being the
gatekeeper for Medicaid in our area of Missouri, and they cannot be
allowed to usurp Federal Regulations or any patients right to
choose.
Very truly yours,
Robert S. Keller, O.D.
Gail Kursh,
U.S. Dept Justice, 600 E St. N.W. Rm. 9300, Washington, D.C. 20530
Dear Ms. Kursh: First, we don't want to talk against our
Hospital as it is good to have a hospital in our city. But we expect
the Hospital to be a Hospital, and not in competition with nearly
every business in our town. Other businesses such as pharmacies,
medical supplies Insurances, Nursing homes, all other nursing needs,
such as Home health care programs, laboratories, rehab programs, and
so on, it goes on and on.
We in the nursing home and convalescent business have to go
through the state of Missouri to apply for Licenses and permits to
start a convalescent center, we are inspected at least twice a year,
more if they see fit. We have many rules to go by. We have to be
approved by the State to operate. We don't think the same rules
apply. Now Heartland Health systems has taken over so many of the
services we had for years here in St. Joseph--without any permission
from the State of Missouri without going through the processes
required for nursing facilities. They have opened a skilled and
intermediate care nursing home without contacting the State or going
through the process. I have talked with a Regional Manager for the
Division of Social Services and told him out plight, He said we
can't do anything as Hospitals can do things and we can't say
anything to them. There surely is some regulations for them as well
as anyone else.
As of now in St. Joseph, MO. if the doctors don't belong to
Heartland Health Systems, they can't take their patients there,
which is double expense. A Doctor used to be in his office and the
patient went there first, then if they needed hospitalization, fine,
otherwise the Doctors office was cheaper. Also now if you need
medications, the Doctors goes through Heartlands Pharmacy which cuts
our own Hometown pharmacies. Our St. Joseph Surgical Supply is
having a rough time, our suppliers of Health Care are all suffering
and all nursing Homes are really hurting. Our facility alone is over
40 patients down and if we call a Doctor about anyone who is sick,
they immediately say send them to the Hospital, we'll check them out
here, which is very expensive. The ambulance service here is
terribly expensive and is
[[Page 29808]]
owned by Heartland Health systems. This is another reason the
Medicare program is suffering and Doctors could come to the Nursing
facilities to see their patients as in the past but they seldom do
that now.
Mr. Kruse not only has bought up the Drs. offices and buildings
and clinics around St. Joseph and areas outside of St. Joseph, the
Doctors had to join Heartland in order to use the hospital. An
official of our State, said it would be good for the government to
look into other hospitals he has worked for.
If all our nursing homes are forced to close, it would be a big
loss to our city businesses, where we buy our supplies, also the
employees would be out of work and we as business owners would be
hurt. The banks that loaned us money to build and operate.
I understand the money Heartland's loans come from outside the
St. Joseph area.
The min trouble we have with Heartland is the when we send our
patients to them as have for years, instead of returning them to us
for their rehab, and care, they are transferring them to their
skilled and intermediate care units, until there Medicare days are
used.
Two of our employees have met and talked with Heartlands Social
Service Dept. they made the remark, ``we have to send them to our
nursing home, we don't have a choice.
Their Social Service Dept. call daily to check on vacancies, of
which we have 40. However refferals are few and far between. In the
past the majority of our patients came from the hospital.
We in the health care business in St. Joseph are all hurting, we
appreciate any effort to stop Heartlands monopoly.
Sincerely;
Administrator St. Joseph Nursing Home.
Dear Sir: We are all so very upset--We owe thousands of dollars
on our nursing home--It's rather new & the bank didn't want to loan
money to a nursing home they didn't feel secure because of something
that happened years ago--Finally they did--Now this we are down over
40 beds & no hope. If we call & doctor he tells us to send them out
to the hospital & he'll see them. Ambulance is $400.00 just for
that. Then they keep the patient & put the patient in their nursing
home. This is in all nursing homes in St. Joseph--All pharmacies are
suffering, all supply companies are suffering. Will you please help
us in St. Joseph. Please, please.
Beltone Knapp Hearing Aid Center
1150 South Belt Highway, St. Joseph, MO 64507, (816) 232-3386, FAX:
(816) 232-4362
Sept. 29, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Anti-trust Division, U.S. Dept. of Justice, 600 E. Street,
N.W., Room 9300, Washington, D.C. 20530
Re: Heartland Hospital Comments
Dear Gentlemen: On Sept. 24th, 1995 the St. Joseph News-press
ran an article on the Heartland Hospital's problem and potential
problems with both the federal and state governments.
In this geographical area we have only one hospital, and one
physicians office that specializes in problems of the ear. At least
one other ear specialist was purported to have been forced out.
It is our understanding that any patient who has any questions
of possible hearing problems is tested and if over 65 is billed to
medicare. If there is a loss, they are sold hearing aids by the
hospital. To our knowledge they are not given a choice or advised of
the many immediate and long term benefits of being fitted by a
dispenser other than the hospital.
If there is to be true competition than this system needs some
changes.
Sincerely,
Roger E. Knapp,
President.
October 4, 1995.
Gail Kursh,
Health Care Task Force, Department of Justice, Antitrust Division,
600 E Street, N.W., Room 9300, Washington, D.C. 20530
Dear Ms. Kursh: As an 18 year employee of a Nursing Facility in
St. Joseph Mo., I am writing in regard to the Anti Trust Suit
against Heartland Health Systems in St. Joseph.
In the 18 years that I have been at this facility we have more
vacancies as this time than we have ever had. We feel it is still
the monopolization of Heartland. If we send a patient to the
hospital they are treated in the acute hospital, transferred to
extended care for rehab, until their Medicare days are used.
Sometimes they are then transferred to the Medicaid unit. The
nursing homes in St. Joseph all have rehab available and there
really isn't any reason for patients to remain in the Hospital for
the length of time they are kept. I believe it is abusing Medicare
and Medicaid as well as private insurance. This did not happen in
the past, only under the present management.
They have bought the Drs. groups, this has caused a trickle down
effect in our city. It has affected everyone in the Health Care
Industry. Heartland now has a 210 bed nursing facility, when there
are many vacancies in the nursing homes in this area. If you use the
Doctors they have bought, you use Heartlands Pharmacy, Laboratory,
exray, and supplies. This has even gone so far as to hurt office
supply businesses, as the Doctors in the past have bought their
office supplies from the local businesses, now they buy through
Heartland.
As far as Nursing Homes go, we all have vacancies and can't see
there was a need for 210 beds at Heartland. I understand they will
be adding an Alzhiemers Unit. There is a total of 500 beds
available, when these are utilized, how many vacancies will we have
and how many homes will be forced to close.
We were of the opinion it was against the law to have a
monopoly. Heartland definitely has a monopoly in St. Joseph.
We have written the Justice Department in the past, as of this
date we can see no difference in Heartlands attempts to monopolize
the Health Care providers in Buchanan County and Northwest Mo.
Finally the summary I read does not rectify the monopoly Heartland
already has. Doctors, laboratories, pharmacies, long term care,
suppliers, and home health.
We remain optimistic that the anti-trust department can help the
providers in and around our area.
Sincerely,
Dee Frye,
P.O. Box 1308, St. Joseph, MO 64502.
I am writing in reference to a newspaper article concerning
Heartland Health System of St. Joseph, MO.
I have had quite a few bad dealings with the doctors in St.
Joseph and Heartland Health System and Physician's acute care
services--which are affiliated with Heartland.
Our insurance provider is Health Net, which my husband carries
through his employer.
I have seen numerous instances of poor patient care, medical
negligence, mis-diagnosis and probable medical malpractice. Over-
billing of patient accounts and trying to get more money out of the
patient, than the insurance says we have to pay.
Another area you may want to check into is the med-clinic which
is a doctor-owned clinic in St. Joseph.
Patients who have went to the clinic for a problem are given
inaccurate lab results and inaccurate diagnosis and told to come
back to be rechecked again, and when these patients go to their
regular doctor there is nothing wrong with them.
I live 25 miles north of St. Joseph, and my family drives 70+
miles to use a hospital in Kansas City. The care is so bad at
Heartland, I wouldn't take a dog there. I hope we never have a life
threatening emergency--they probably wouldn't make it to Kansas
City, but they would be better off, than going to Heartland.
Sincerely,
Alona S. Miller,
20421 County Road 223, Union Star, MO 64494.
October 3, 1995.
Professions and Intellectual Property Section, Health Care, Task
Force,
Anti Trust Division, U.S. Department of Justice, 600 E Street N.W.,
Room 9300, Washington, D.C. 20530
Attention: Gail Kursh, Chief
Dear Ms. Kursh: Recently in the St. Joseph Newspress the article
on HEARTLAND HOSPITAL, St. Joseph, Missouri pertaining to the anti-
trust suit that is pending against them.
You might find it very interesting to the treatment that a local
doctor * * * Dr. Charles Willman received from them. He filed law
suits again the hospital and some doctors but was unable to get by
the Judge Bartlett in Kansas City and also unable to be heard in
Jefferson City, Missouri. Dr. Willman was a very fine surgeon and
was my person doctor. They refused him practice at the hospital and
you might find it very helpful if you investigated this case.
Dr. Willman gave up his practice and now lives in Springfield,
Missouri due to financial reasons.
[[Page 29809]]
Sincerely yours,
Joy Schiesl,
Five Lindenwood Lane, St. Joseph, Missouri 64505.
Bender's Total Home Health Care
3829 Frederick Avenue, St. Joseph, Missouri 64506, 816/279-1668, 800/
633-9781, Fax 816/279-6425
Gail Kursch,
Dept. of Justice, Antitrust Division, 600 E Street NW, Room 9300,
Washington, DC 20530
This is to make you aware of a grave concern we and others
(providers and patients) have regarding the new Referral Policy of
Heartland Health Systems. That policy, as stated in the proposed
Final Judgment against Heartland Health Systems, HealthChoice of
Northwest Missouri and St. Joseph Physicians Inc. by the U.S.
Justice Dept., has clearly been developed to serve the best
interests of Heartland and its subsidiaries, and certainly not the
best interests of patients. Not only are patients unlikely to be
given an equal, unbiased choice of providers, the new policy
guarantees that patients will not be given unbiased information or
assistance with which to make necessary decisions.
There are several reputable providers of home health care,
hospice, home medical equipment, oxygen and outpatient
rehabilitation services serving St. Joseph and the surrounding area.
In an effort to achieve total vertical integration, Heartland has
created subsidiaries to fill each of these ancillary services. In
doing so, Heartland has become a direct competitor with each of the
independent providers for whom Heartland is the primary referral
source. To further control referrals, Heartland also now ``owns'' an
HMO, an managed care agency and several physicians' practices.
While being ripe for abuse, this situation is not of itself
necessarily harmful to independent providers nor to patients.
Actually, we contend that fair competition encourages providers to
improve the service they render and to hold down costs, which
ultimately benefits consumers. However, the procedures which
Heartland's discharge planners have been ordered to follow are
harmful to the ultimate consumer good by preventing fair
competition.
The previous referral policy was that every patient for whom
ancillary services were ordered would be made aware of all area
providers of the required service(s) in an unbiased way. Should a
patient have questions about any of these, the discharge planner,
working on the patient's behalf, would seek accurate information.
This policy, if followed, would foster fair competition; would
encourage providers to compete based on merit, not artificial
barriers or deal-making; and most importantly, would benefit
patients.
The new policy states that if a patient does not express a
preference of provider, the discharge planner shall make a sales
pitch for Heartland's own service. If the patient does not accept
Heartland's Ancillary Service or asks what other providers are
available, they shall be told to look in the telephone book. Only if
the patient asks again for information on other providers are the
referring personnel to verbally (not in writing) identify the
independent providers that can serve the patient's needs. At no time
is the discharge planner to act on the patient's behalf by providing
impartial information that would facilitate the patient choosing one
of Heartland's competitors.
Obviously, this new policy blatantly prevents free, informed
patient choice by denying equal access to information. Discharge
planners who should be impartial patient advocates are turned into
agents for heartland's ancillary services. No other provider is
allowed to put literature into the hands of patients. No other
provider is allowed access to patient charts. No other provider's
capabilities can even be outlined to patients and families who could
benefit from their service.
We do not expect each independent provider to be allowed to walk
the halls ``fishing'' for patients or to give an aggressive sales
pitch to every patient that is admitted. What is expected is
fairness. Equal access to accurate information by patients and
impartial efforts by those who are supposed to be assigned (and
allowed) to serve the best interests of the patient--not those of
Heartland. Heartland's Ancillary Services should be treated no
better or worse than any other provider, but should compete for the
opportunity to serve the needs of the patient based upon merit. Give
the patients equal, unbiased information and impartial assistance
and let them choose.
We have no complaint against hospital personnel, in fact most
with whom we have had dealings over recent years (as patients and as
a provider of products/services) have been extremely efficient and
helpful. Our concern is with the new policy which, not only
threatens the viability of independent businesses, but betrays the
trust of unsuspecting patients who assume that their interests are
being handled by impartial sources.
Mark L. Wyble,
Coordinator, Patient & Community Relations.
October 9, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section, Health Care Task
Force, Anti-trust Division, U.S. Department of Justice, 600 E
Street, N.W., Room 9300, Washington, D.C 20530
Dear Gail Kursh: I recently saw an article in the St. Joseph
newspaper indicating that the Justice Department was accepting
written comments on the proposed consent decree concerning
Heartland, Health Choice and St. Joseph Physicians, Inc.
What I cannot understand is how Heartland Health Systems, the
parent of all these organizations, and supposedly a non-profit
organization, can contribute over three million dollars to the
purchase and development of land for an industrial park in St.
Joseph.
If Heartland Health Systems has that much extra money to throw
around then whatever they are doing must be a real serious violation
of the anti-trust laws and should require more serious penalties
than the slap on the wrist they are receiving in the consent decree.
A concerned citizen of St. Joseph, Missouri
Coalition for Quality Healthcare
October 10, 1995.
To all who have been affected by Heartland's business practices,
both providers and patients:
We are a group of business professionals and citizens concerned
about the fairness in the healthcare market in St. Joseph.
We Want Our Voice To Be Heard
The Justice Department recently filed in district court a
``Final Judgment'', which, according to the competitive impact
statement filed with it ``* * * will restore the benefits of free
and open competition in St. Joseph and will provide consumers with a
broader selection of competitive health care plans.''
The Coalition for Quality Healthcare, and other concerned
citizens, want you to become familiar with the ``proposed Final
Judgment.'' The United States District Court for the Western
District of Missouri has filed this civil action suit against
Heartland Health Systems, Health Choice of Northwest Missouri, Inc.,
and Physicians, Inc., on September 13, 1995. After 60 days,
(November 13, 1995) this Final Judgment will be entered into court.
Once finalized, no changes will be allowed into the decree for a 5-
year period. We believe that the proposed final judgment should be
modified and clarified before it has been filed and entered by the
court.
Appropriate steps are needed to ensure equal access and to
foster patient care. In order to ensure equal access to available
services provided by many sources other than Heartland, as well as
adequate patient choice in obtaining those services, we believe that
certain restrictions need to apply to Heartland Health Systems.
These restrictions would serve to foster and support cost reduction
through total market competition, and should include the following:
Strengthen limitations on the hospital's ability to
refer its patients to its own hospital-based components.
Require the hospital to use a rotation system, which
assures equitable referrals to all providers in the area. A
legislated rotation system would guarantee that hospital staff could
not unfairly influence hospitalized patients in the selection of
necessary providers and would provide a means of accountability.
Require the hospital to permit (on their premises,
during normal working hours) representatives of freestanding
providers--other than their own hospital-based components--to visit
their patients who have been admitted for hospitalization; and to
expose the patient population to the availability of outside
services as well.
In order to ensure compliance with the above, make the
hospital post, for public examination, their daily referrals to both
their hospital-based component and to other providers in the
community.
Situation
It is time we made the hospital accountable for their actions!
They say they have a
[[Page 29810]]
referral policy, and they follow it * * * let's make them abide by
it. Hospitals who exceed 30% of referrals to their own components,
should be subject to a fine.
Recommendation
We recommend that violators be fined $50,000 per day.
What We Would Like To See
First and foremost, we would like to see the patients offered
informed consent and the right to choose. We feel that all people
need to be educated on this fact.
As a provider, your business may be adversely affected by
Heartland's use of its monopoly power. As a patient at Heartland,
you may have been ``coerced'' into using a Heartland based
component, disregarding ``Your Right to Choose''.
Please join us for an informative meeting:
Who: The Coalition for Quality Healthcare
When: Tuesday, October 17 &/or Thursday, October 19
Where: Stan's Golden Grill
Time: 6:30
It is only necessary to attend one of these meetings. We wanted
to create an option in an effort to accommodate everyone's busy
schedule. We will make every attempt to contain these meetings to
approximately 1\1/2\ hours.
RSVP your attendance today to: 279-5393.
Our goal is to submit to the United States District Court for
the Western District of Missouri our recommendations to amend the
``Final Judgment''. We as a group of professional healthcare
providers and concerned citizens, must take this stand now, or abide
by the decree that will be enforced as of November 13, 1995.
Together, we CAN make a difference.
Questions? Call 279-5393.
Sincerely,
The Coalition for Quality Healthcare
Citadel Health Care
5026 Faraon Street, St. Joseph, MO 64506, (816) 279-1591, Fax (816)
232-3775
October 3, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section, Health Care Task
Force, Department of Justice, Antitrust Division, 600 E Street, Room
9300, Washington, D.C. 20530
Dear Ms. Kursh: We are a small 100-bed skilled nursing home
sitting in the shadows of Heartland Hospital of St. Joseph,
Missouri. By doing a good job in all respects, we have been able to
survive. But being a neighbor to an octopus, when the octopus is
trying to eat you every day, is no fun.
The ``Final Judgement'' filed with the district court falls far
short of creating a level playing field. Heartland conducted an
elaborate building campaign and vastly expanded it's new ``campus'',
then had it's older facility left mostly vacant. Being good business
persons, they chose to convert that hospital structure into a
skilled nursing home, directly affecting 400 other long term care
beds operated by private entities. Heartland's intrusion into the
market added a 50% increase in nursing home beds in a state where a
certificate of need is/was required, except that they used political
influence to circumvent the certificate of need laws to be our
monster competitor.
Does Heartland refer persons to our nursing home? Fat chance!
They raid our census every time we have someone that becomes ill
enough to need hospital or rehabilitation treatments. If those
residents leave us, and they either have Medicare available
coverage, or have private insurance, or are lucky enough to be
financially secure, they never come back to us. They or their
families are ``sold the Heartland philosophy'' (that Heartland can
do more than any other nursing home, and do it so much better that
nobody should ever leave Heartland's sphere of care). We have four
such cases just in the month of September 1995, and know that those
people will not be back until they are indigent, at which time
Heartland will dump them like the next load of garbage, back to a
nursing home.
Or if the person makes significant recovery, Heartland refers
everyone possible to it's wholly owned ``Heartland Home Health
Care'', which looks like it is just about to force all three other
home-care businesses out of business. This seems grossly unfair,
considering that again Heartland is the ``new kid on the block''.
The other home care agencies were in business long before Heartland
entered that market.
Is it coincidence that Heartland is thriving and all other
health care businesses in the area are struggling for survival? Not
hardly. Heartland has already bought approximately 80% of all the
available physician services in the area. And if the doctor wants to
keep his job (not his practice--just his job), he will do as
Heartland directs.
In the long term care industry, survival depends upon a
facility's relationship between local physicians and the hospital.
Where does that leave every long term care provider in St. Joseph?
Answer: 1) Competing for patients with the hospital; 2) Depending
upon referrals by doctors that are employees of Heartland, operating
medical practices that are owned by Heartland. If a potential
nursing home admission is first seen at the hospital, if there is
room in Heartland's facility and there is a way to induce the family
to stay there, that is what happens. If the potential admission is
seen in one of Heartland's medical practices (and they own approx.
80% of all the providers in the area), the Heartland provider is
certainly referring potential clients to Heartland's nursing center.
If when the managed care capitation occurs, Heartland will now
be in a position to absolutely bankrupt all the other nursing
facilities in the area because they have a large, former hospital to
expand into. They can bid services below their competitor's cost of
staying in business because of their competitive advantage * * * an
advantage based upon monopolistic principles of eliminating
competition.
It is relevant to note that Heartland's per diem rate is
approximately 25% higher than other competitive nursing homes here,
they are 95% filled with private paying residents, and the composite
private pay census of all other homes in this area is approximately
25%. Heartland has staff persons whose responsibility is to recruit
from the hospital to fill their nursing home with private paying
persons. Nobody else in this area has access to walk the halls of
the hospitals to recruit persons in need, and have the ``closed
market'' already captured.
We know that Heartland has spent huge sums of money defending
its right to acquire and operate all of the health care industry in
a large area of northwest Missouri. Unless something is done in the
near term future, they will squeeze their smaller counterparts like
a huge python kills its prey. And when there is no life left,
Heartland will swallow the remains.
When the competition is gone, so will be all ability to make
independent health care choices, and so will go the availability of
services to the masses. Heartland is flourishing because it already
has captured the private pay market that can and does pay market
rates. The rest of us must accept public assistance patients, or not
accept any at all. Heartland gets all the private pay clientele, not
because they necessarily provide better product, but because it's
hospital has first access to those folks. If they were not sold a
``bill of goods'', why else would someone opt to pay 25% premium for
services in a hospital-converted nursing home when they could have a
much homier accommodation in some of this city's nursing facilities?
Unfair competitive advantage!
Please do not turn your backs on the providers that took care of
this community before Heartland became a megopoly. Those providers
all survived and provided good service until the hospital pushed
them aside. Given any kind of equal opportunity access patients,
those facilities can still compete. It is the lack of access, due to
Heartland's vertical integration, that threatens the livelihood of
the other health care businesses in this area.
Thanking you in advance for any assistance you may provide, I
remain.
Sincerely,
Lowel Fox,
Administrator.
October 11, 1995.
Ms. Gail Kirch
Health Care Task Force, U.S. Dept. of Justice, 600 E St., NW., Room
9300, Washington, DC 20530
Dear Ms. Kirch: Regarding Heartland Health System and St. Joseph
Physicians Inc. in St. Joseph, MO. I prefer to go the a doctor of my
choice and a hospital of my choice. I have gone out of St. Joseph
for years and hope to continue to do so.
Heartland Health, under Lowell Kruse, has been attempting to
``keep everyone in the area'' for years. There needs to be a full
scale investigation.
Sincerely,
Evelyn W. Nask,
2720 Francis, St. Joseph, MO 64501.
October 8, 1995.
Dear Ms. Kursch, Chief, Professions & Intellectual Health Care
Task Force: I wish to comment on your proposed consent decree
concerning Heartland, Health Choice and St. Joseph Physicians Inc.
in St. Joseph.
[[Page 29811]]
It is not my desire to have my choice of doctor(s) and hospital
eliminated. If I choose to go outside Heartland Health System for
medical treatment I want that to be a viable option for me.
It appears Mr. Lowell Kruse and Heartland Health System are
attempting to create a monopoly in N.W. Missouri, thereby running
competitors out of business.
There needs to be a large scale investigation (without warning)
of this entire system. I also think the doctor should be in charge
of the patient, not the administrator on the insurance company.
Sincerely,
Ruth Serrells,
2730 Felix St., St. Joseph, MO 64501.
cc:
State of Missouri, Attorney General's Office, Attn: Mr. Gary
Kraus, Superior Court, Box 899, Jefferson City, MO 65102
November 4, 1995.
Gail Kursh,
Chief, Professions and Intellectual Property Section Health Care
Task Force, Department of Justice, Antitrust Division, 600 E Street
NW., Rm. 9300, Washington, DC 20530
Dear Ms. Kursh: This is an explanation of how I feel Heartland's
policy and competition has affected my business over the last few
years and how it will affect me in the future if strict guidelines
are not put into place.
Heartland is competing with me directly for my nursing home
patients and for my regular customers as though they were a standard
business competing for profits. Competition is good and will always
be the best system to keep all of the business community on the
leading edge of giving the patients the best quality care they can
possibly receive. As a ``for profit'' business, I must pay taxes and
incur expenses in the day-to-day activities that control how I do
business. Heartland, on the other hand, is competing directly for my
patients and other laboratory, home health, and hospice care, etc.
that they want to control, on a non-profit basis * * * How is that
possible? Their desires and efforts are towards controlling all
aspects of healthcare in the entire Northwest Missouri area.
My business has decreased two-fold in the nursing home area. One
is in direct competition for my customers in the homes and secondly
through Heartland's in-house referral policy. When a patient is
admitted into Heartland Hospital from a nursing home, they are
``captured'' into Heartland's system. When these patients are
discharged, they are, on many occasions, discharged into Heartland's
skilled or intermediate care facility and are then serviced by
Heartland's own pharmacy. As you research past history you will see
Heartland has already been in trouble for not giving their patients
a real choice in their Heartland Centre facility. As a matter of
fact, Heartland used to make their long-term care center patients
sign a statement that they would only get their pharmaceuticals
through the Heartland pharmacy. It has only been recently, (within
the last two or three years) that Heartland was forced by Medicare
to allow other pharmacies into their nursing home setting. At that
time, Heartland officials sent a letter to their patients which lead
the patient and families to believe that if they didn't use
Heartland's own pharmacy, Heartland could not guarantee the quality
of service they would receive. This is a very scary thought to these
elderly patients and their families. It is also a statement that
could not be further from the truth. Given this ``threat'', does the
patient really have a choice in pharmacy?
My total prescription volume, down by 20% in the last two years,
is partially due to Heartland's policy to discount their
prescription ``copay'' to all their employees for the purpose of
increasing the volume of their new pharmacy. Even if we could afford
to do this (reimbursement for our services by the Heartland HMO does
not leave room for any more discounts) our contract with the claims
processor makes discounts an unfair business practice. It should
also be noted that Heartland, because of their position as a
hospital and now an HMO, receive deep discounts on prescription
drugs. Sometimes Heartland may pay as much as 80% less for the same
pharmaceuticals that I buy at wholesale prices. This constitutes
another aspect of unfair competition. There is no way I can cut my
prices to adequately compete when I have to pay so much more for the
same items. Several years ago Heartland had another pharmacy which
tried to compete with existing pharmacies and could not make it on
standard competition. Needless to say, Heartland has found this
``unfair'' competition much more lucrative.
Jake's also does not receive any referrals of patients as they
leave the hospital and have needs for walkers, canes, crutches,
wheelchairs, commodes and numerous other healthcare necessities for
recuperation at home. This is an area I know all to well. I used to
own a business that worked exclusively in home care supplies and
fell to Heartland's unfair and unprofessional business practices.
After building a quality business, having a past, non-exclusive,
service contract with Heartland, and a letter of intent for
continuation of this contract along with increased equipment needs
forcing a large expenditure on my part, Heartland began doing
business with another company without notice. This forced me into a
sale situation which was less than desirable.
My major concern is for the patient's overall healthcare.
Competition is what keeps hospitals, pharmacies, hospices, and other
healthcare services accountable to the general public and each
individual consumer. Competition encourages business to be the best
that it can be. St. Joseph has only one hospital. The public is not
able to compare Heartland's services to another hospital and choose
the one which best provides for their specific needs. The new
Heartland HMO seals the fate of true competition, not allowing for
any choice what-so-ever in hospital services. If competition is
further impeded, if Heartland is allowed to go forward with their
plans without strict checks and balances, who benefits except the
pocketbook of Heartland? If these other services, represented by
many companies, are allowed to fall by the wayside, who will be able
to hold Heartland accountable? What guarantees will be in place that
will make sure the patient's welfare and comfort are the driving
force of healthcare decisions? I am deeply concerned that without
the variety of businesses now involved in the many areas of
healthcare in the St. Joseph community, Heartland will have a
``captive audience''. It will not make decisions based on what is
best for the patient, but will judge a patient's healthcare
treatment by money saved * * * by profit generated.
You have the power to ensure that fair competition exists in the
St. Joseph community. It is within your power to ensure that
Heartland's domain is not allowed to continue to snowball and over-
run its competitors. Unfortunately, if nothing is done to strictly
control Heartland, by the time it is realized that lack of
competition breeds apathy and poor service, the competitors will be
gone.
In closing, I want to thank you for the opportunity to speak to
these issues. I hope you are able to see the crisis faced by myself
and my colleagues. If I can be of further assistance, please feel
free to contact me at the address and phone number listed below.
Sincerely,
Richard C. Bosworth,
Coalition of Quality Health Care, 2318 N Belt Hwy., St. Joseph, MO
64506.
Armstrong, Teasdale, Schlafly & Davis
Attorneys and Counselors
1700 City Center Square, 1100 Main Street, Kansas City, Missouri 64105,
(816) 221-3420, Fax (816) 221-0786
November 13, 1995.
Edward D. Eliasberg, Jr.,
Antitrust Division, U.S. Dept. of Justice, 600 E. Street, N.W., Room
9420, BICN Bldg., Washington, D.C. 20530
Re: U.S. v. Health Choice of Northwest Missouri, et al., Civil
Action No. 95-6171-CV-SJ-6, Pending in U.S. District Court, Western
District of Missouri
Dear Mr. Eliasberg: This office represents The Coalition for
Quality Healthcare, a Missouri non-profit corporation made up of
businesses in the St. Joseph and northwest Missouri area who provide
ancillary healthcare services to the public. In connection with our
representation, we are preparing to respond to the proposed Final
Judgment in the above matter.
We obtained a copy of the proposed Final Judgment (consent
decree), Stipulation, Complaint and Competitive Impact Statement
from the district court. We were informed by the district court that
no ``determinative'' materials or documents called for by Sec. 16(d)
of the Tunney Act were filed with the court. We also called your
Department to request those documents or materials and were told
that none exist in this case.
Section VII of the filed Competitive Impact Statement recites
that ``No materials and documents of the type described in Section
2(b) of the APPA, 15 U.S.C. Sec. 16(b), were considered in
formulating the proposed Final Judgment.'' In light of the fact that
this suit
[[Page 29812]]
resulted from a multi-year investigation by your Department, during
which administrative depositions were taken and documents produced
by defendants, it seems improbable under the circumstances that no
documents exist which your office considered determinative in
drafting the proposed consent decree.
This very issue was taken up by the district court in United
States v. Central Contracting Co., Inc., 537 F.Supp. 571 (1982). In
Central Contracting, in response to a request for materials called
for by the Tunney Act, the Department of Justice asserted that
``there were simply no documents or materials * * * that contributed
materially to the formulation of the proposed relief.'' Id. at 573.
The Court found the government's assertion disingenuous in light of
the government's similar claims in 172 out of 188 prior cases that
it considered neither documents nor any materials determinative. Id.
at 577. The Court refused to blandly (and blindly) accept the
government's certification that no documents or materials led to the
government's determination that it should enter into a consent
decree. Id. at 575. Rather, the Tunney Act required a ``good faith
review of all pertinent documents and materials and a disclosure''
of those materials called for by the Act. Id. at 577.
We hereby request on behalf of The Coalition for Quality
Healthcare that the United States produce to this office and file
with the U.S. District Court for the Western District of Missouri a
list of any materials and documents which the United States
considered ``determinative'' in formulating the proposed Final
Judgment, so that we or any members of the public may request copies
of specific documents from your Department.
I look forward to your prompt response to this request.
Very truly yours,
Thomas M. Bradshaw, P.C.
TMB:kag
cc: Ms. Kristin Helsel, President, Coalition for Quality
Healthcare
Glenn Davis, Esq.
Heritage Home Health
Central Office: 169 Daniel Webster Hwy., Suite 7, Meredith, NH 03253,
603-279-4700, Fax 279-1370
Branch Office: 500 Commercial St., Unit 302B, Manchester, NH 03101,
603-669-5700, Fax 669-5755
November 14, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Department of Justice, Antitrust Division, 600 E Street, NW,
Room 9300, Washington, DC 20530
Re: DOJ's recommended home health, DME and hospice referral policy
for Heartland Hospital
Dear Chief Kursh: I read with interest an article that appeared
in . . . home health line, November 13, 1995, Vol. XX, No. 43, that
referenced the above mentioned policy. Please take a moment to
consider the following:
(1) The main source of referrals for home health services come
from hospitals. The vast majority of consumers of home health
services are patients discharged from hospitals in need of follow-up
care.
(2) Free standing home health agencies can not reasonably
duplicate such a facility (hospital).
(3) Free standing Medicare certified home health agencies are
inspected according to the same federal regulations as hospital
based home health agencies. There are no requirements or need for
further ``independent review or evaluation'' by the hospital.
(4) Vertical integration and monopolizing of referrals can and
will not serve long term cost containment.
(5) Medicare beneficiaries should be offered a list of all
participating Medicare providers when they are in need of services.
(6) Hospitals should have discharge planners that are not
affiliated with any home health agency, including the hospital based
home health agency. Referrals could then be made to the best
provider for the given circumstances. Often times, even though the
hospital based agency can not properly service a patient, the
referral is given to them, only to have the patient left without
service entirely or on their own to locate another provider.
Hospitals are reimbursed for offering discharge planing to their
patients to locate the best possible scenario of services for that
patient and to ensure that persons' discharge is a safe and
successful one. In the current environment, however, discharge
planners are fast becoming ``casefinders'' for Hospital based home
health agencies.
(7) Hospital discharge planners often refer patients to other
types of Ancillary services, that they are not affiliated with, when
the hospital does not own facilities or agencies offering that type
of service without doing an independent review or evaluation. For
example, a referral to a skilled nursing, sub acute of
rehabilitation facility.
(8) Hospitals are no longer the community providers they once
were. They take the homes of people who owe them money. They employ
attorneys, accountants, MBA's, image consultants and more. They
advertise. Health care is a business. Hospitals are profiting from
that business. They should not be allowed to continue unchecked.
Thank you for your consideration.
Sincerely,
Carolyn A. Virtue,
Administrator.
MS&R--Medical Sales & Rentals
1411 Memorial, Bryan, Texas 77802, (409) 776-5555
November 14, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Department of Justice, Antitrust Division, 600 E. Street,
N.W. Room 9300, Washington, DC 20530
Re: United States v. Health Choice of Northwest Missouri, Inc., et
al., Case No. 95-6171-CV-SJ-6
The Coalition for Quality Healthcare is correct. Heartland
Hospital is taking away a person's freedom of choice. Allowing the
hospital to eliminate competition will eventually lead to poor
service and poor quality of care. The independent businessman is the
backbone of this country and that will be eliminated if the hospital
is allowed to keep referring their patients to themselves.
Your recommended referral policy for Heartland Hospital is not
correct. It is ``big business'' orientated and does not consider the
patient or the independent businessman.
A local hospital opened their own DME company last year. Since
that time two independent companies have had to change their day to
day business strategies because they no longer get referrals from
the area's major hospital. We are fighting to stay in business.
Please call me at 409-776-5555 if you would like more opinions
or viewpoints.
Sincerely,
Nathan L. Cook,
Owner/President.
HealthCare Personnel
Moorings Professional Building, Suite 407, 2335 Tamiami Trail No.,
Naples, FL 33940, (941) 261-8700 FAX (941) 261-7206
November 15, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section, Health Care Task
Force, Department of Justice, AntiTrust Division, 600 E St., N.W.
Room 9300, Washington, D.C. 20530
Re: United States v. Health Choice of Northwest Missouri, Inc., et.
al. Case No. 95-6171-CV-SJ-6
Dear Ms. Kursh: The proposed final judgment for U.S. v. Health
Choice is a death knell for quality care in the home health care
setting. Competition supports and promotes a high quality of care,
evidenced by clinical outcomes, cost-effective clinical guidelines,
patient satisfaction and appropriate utilization of community
resources. Your proposed judgment creates a monopoly for hospital-
based home health care agencies and the end of competition in home
health care.
Hospitals have a ``captured audience'' of vulnerable patients
who feel dependent upon the hospital staff. Patients are not likely
to defy a discharge planner's referral to the hospital home health
agency for fear that their defiance would create an environment
where the patient's continuing needs (in-patient needs and paperwork
for reimbursement needs) may not be met or may be delayed.
Additionally, hospitals exert their influence over physicians
(with hospital privileges) to refer only to the hospital-based
agency in order to support the hospital. Some hospitals have even
moved their home health agency from being a separate entity to a
hospital department, so that self-referrals are not subject to GAO
investigations instituted by Rep. Pete Stark (D-Calif.). A second
reason may be to shift administrative costs.
I have been in home health agency administration for twenty
years. In the past two years I have seen hospitals discontinue
[[Page 29813]]
a referral rotation system, discontinue hospital access to patients
by agencies who serve them, refer only to their own agency, call
physicians to ask why a hospital patient was referred to an outside
agency, and hide all referral data and percentage of referrals to
hospital based or outside agencies. All these practices reinforce a
hospital-based home health care monopoly.
Hospital arguments for promoting their own agency at the
exclusion of outside agencies include continuum of care, referrals
to other agencies would require hospital credentialing of outside
agencies, and hospitals always give the patient a choice. It is easy
to refute these claims.
The traditional continuum of care has always been from
organization to organization, be it a hospital or other community
resource agency, with patient information transferred between
professionals who are trained to focus on continuity and
coordination of care. Just because a home health agency has the same
name or is affiliated with a hospital does not, in itself, assure
quality, continuity or coordination of care. Continuum of care
actually is a reimbursement train for the hospital, in the absence
of their desired hospital-based reimbursement bundling.
The responsibility of a discharge planner includes knowledge and
judgment regarding all home health care community resources that
would benefit the patient. Traditionally, in cities as large as
Cleveland, Ohio and as small as Naples, Florida, discharge planners
have always known resources available, and have received feedback
regarding the quality of care from those agencies. Besides, state
home health agency licensure laws establish standards that agencies
must meet, so hospitals should know that standards are met and don't
need to ``credential'' them.
Finally, hospitals ALWAYS state they give the patient a choice,
yet many outside agency patients have told outside agencies that
during their hospitalization, hospital representatives have almost
insisted they use the hospital-based agency and demand to know why
the patient would NOT want to use an affiliated agency. Also,
physicians who refer to outside agencies tell outside agencies that
as soon as the patient is admitted, before the physician even
discusses discharge with the patient (to advise them of the
physician's choice of agency), the hospital-based agency has already
been in to talk with the patient and already has them signed up as a
referral for their agency. The physician does not even have a
choice.
Thank you for the opportunity to send you my comments on your
proposed final judgment for the above mentioned case. Please don't
be persuaded by big hospital corporations and hospital lobbyists to
pass a judgment that abolishes competition in home health care and
effectively gives patients no choice and no recourse when a complete
monopoly occurs.
Sincerely,
Greg Eggland,
Director.
Health Personnel Incorporated
1110 Chartiers Avenue, McKees Rocks, PA 15136-3642, (412) 331-1042,
FAX: (412) 331-2774
November 16, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Department of Justice, Antitrust Division, 600 E. St., N.W.,
Room 9300, Washington, D.C. 20530
Dear Chief Kursh: After reading the article that appeared in the
11/13/95 edition of Home Health Line I feel it is necessary as a
free standing home health care agency to comment on the Department
of Justice's proposed referral policy for Heartland Hospital. This
policy will be precedent setting for all hospitals across the nation
and fails to take into consideration a number of things such as:
The main source of home health referrals is hospitals and
hospitals have a captive referral source which cannot be duplicated
in any other way. Yet, they are a very expensive source of home
health care and often provide a poorer quality of care. Hospitals
pass through some of their administrative and general costs to their
home health agencies and get away with this ``double dipping''. The
cost of a visit is increased by passing through costs of the
hospital and this does not help cost containment efforts.
Also, at least in this area of the country, hospitals do not
individualize their care. They discharge patients from homecare
before they stabilize which sends them back to the hospital and
increases health care cost.
One way to stop this is to enforce regulations: Freestanding
agencies must meet the same certification and/or licensure standards
as hospital agencies. Therefore, hospitals should have a rotating
list which assures equitable referrals to all qualified providers
(one that meet Medicare certification (licensure) standards and have
the necessary services). The hospital should have to make their
percentage of referrals public knowledge to each agency.
The discharge planner should offer a list of all participating
Medicare providers in the service area and the discharge planner
should have no affiliation with any agency. By the way, hospitals
often cannot service the patient adequately and so the patient is
left without care, i.e. a physical therapist is not available to see
the patient in a timely manner (four weeks later a physical
therapist is starting to see the patient). No home health aide is
available so the hospital agency tells the patient that they do not
qualify for a home health aide. (For example, the patient has a
fractured arm and myocardial infarction but, does not qualify for an
aide?)
Although, your policy puts the physician back in control, it
fails to take into consideration the fact that here in Pittsburgh,
if doctors refer to another entity outside the hospital, the
hospital can revoke their privileges. (This is happening in
Pittsburgh.) You need to write the settlement so that hospitals
cannot retaliate or put pressure on the doctor to refer to their
agency.
Referring the patient to the phone book is inappropriate as the
patient cannot tell which providers can give the kind of care they
need or who is Medicare certified. Also, the list of other providers
needs to be written as sick or well people, cannot remember many, if
any, names and they need the phone numbers.
This issue covers more than the antitrust issue you seem to be
addressing. The settlement fails to address the Anti-kickback Law
which prohibits hospital doctors (doctors paid by the hospital) from
referring to a hospital owned agency and the Stark II Law. According
to these laws, no agency can receive referrals from any physician
who has been paid more than $24,999.00 by that agency. If a hospital
or doctor owns more than a 5% financial interest in an agency, they
cannot self refer.
Health Personnel, Inc. has tried to address these issues with
HCFA since 1986 and no one has been able to resolve these problems.
In addition, the American Federation of Home Health Agencies has had
discussions with Mr. Thomas Hoyer at HCFA in Baltimore regarding the
patient choice issue. I hope you will resolve these problems and
legal questions.
Sincerely,
Phyllis W. Fredland,
Director of Nursing.
Home Health Specialists
November 16, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section, Health Care Task
Force, Dept. of Justice, Antitrust Div., Washington, D.C. 20530
Dear Ms. Kursh: I have recently read the D.O.J., proposed
referral policy for home health, DME and hospice for Heartland
Hospital. I personally find this totally absurb. If this proposal
passes it not only will affect the freestanding home health
industry, but will also affect a patient's right to choose, even
though the bill offers some small reference to freedom of choice.
The government reports that Medicare will be broke by the year 2007,
and then a bill such as this is recommended for hospital based
agencies. Evidently there has been no investigation of the cost of
hospital based agencies versus freestanding agencies for patient
care and supply reimbursement. To allow a hospital to elaborate on
their agency and state that they know nothing of the other agencies
in town is absurb, when we all know that being a discharge planner,
they have had some dealings with the other agencies in their area.
Freestanding agencies have received a bad deal, since the beginning
of hospital agencies when it comes to referrals and this will only
make it worse. We provide the same quality and conservative care
that they state they provide and at a lower cost. As it stands right
now in our area, we are not allowed to place brochures in our
hospital, visit our former patients, because that is considered
solicitation by the hospital, and we are not allowed to view the
admittance and discharge rooster. This only
[[Page 29814]]
started when they opened there own agency. A rotation of referrals
would give everyone a fair chance to provide the care for the
patients that we should all strive for. This would stop the
hospitals attempting to monopolize the health care industry and
could possibly reduce the legal and judicial fees that are being
used due to law suits over the monopolizing of care. The posting of
referrals would then allow the freestanding agencies to view how
referrals are given and provide some insight into the qualifications
and professionalism of the discharge planners, who in some instances
are placed in the hospitals by competing home health agencies. If
the bill is passed as the D.O.J. recommends, you will see slowly the
fading away of freestanding home health companies the provide a
large number of jobs to people in our area. I hope that the people
reviewing this proposed policy really know the impact that this will
have on the health care industry and take into consideration that it
is hard enough now for freestanding agencies to receive referrals
from hospitals, knowing fully well the discharge planners are not
playing by the regulations that are in existence now, and this would
make it easier to violate regulations, while at the same time
allowing an industry of freestanding ag to die away. Please, for all
the freestanding agencies that are in existence please review this
referral policy closely and make discharge planners to rotate
referrals as well as make available to home health agencies the list
of the referral list.
Sincerely,
Donna Isabell,
Administrator/President, Home Health Specialists, Inc.
November 6, 1995.
Dear Gail: My name is Kathy Smith. I read an article in the St.
Joe newspaper on Sept. 24, '95 concerning Heartland Health System.
This article really hit home with me. This hospital, or so called
hospital, has ruined my life. Let me tell you my story.
I broke my ankle on April 12th of this year. I was taken to the
hospital by some friends. (My husband works the late shift so he met
us at the hospital later.) I waited in the emergency room for one
hour and 45 minutes. In that time, no one came out to check on me. I
finally had my husband go ask a nurse for a blanket. My body was
beginning to shake. I imagine shock was starting to set in.
Finally I get back to E.R. and am taken on to X-ray and I wait
some more for a doctor to come and set my foot. I find out I need
surgery. They will do it tomorrow (April 13). I leave E.R., its
after 2:00 in the morning.
Surgery is done the next afternoon. All went well, or so I am
told. I get released on the 14th & I go home.
Now, you have to understand, I'm 33 years old, and am married
and have two small boys, ages 3 and 5. I'm walking or hoppling
around with a walker, can't fix supper, can't do all the chores
around the house, that I used too. This hurts, I've never had to
depend on other people. But I figured, I'll be up and around in 6 to
8 weeks, just like the doctor had stated. End of story? I wish, it's
only the beginning!
One week after the 1st surgery in April, I came down with a high
fever of 103 degrees, then the chills, and nausea. I called my
doctor, he wasn't in. I told the nurse, or the secretary or whoever,
and they said they would get a hold of him and have him call me. He
did, about 45 minutes later. I told him all the symptoms, and do you
know what he said, I must be coming down with a cold or maybe the
flu. Take some Tylenol.
I went back to the doctor, every week for the next month, then
every 2 weeks for awhile. I had a place on my ankle that wasn't
healing. He (the doctor) would squeeze on my leg and say that was
fat draining out. He even brought in a colleague, and they both
agreed that was what it was. (No not once in his office did he wear
rubber gloves when he touched my ankle (leg).)
Finally after about a month, he decided to put me on antibiotics
(actually he gave me a choice, go in the hospital or take
antibiotics.) Now, when you have a family that depends on you, what
choice if any would you have taken? So I took antibiotics. Even when
I went back to see this doctor (on antibiotics) he'd continue to
squeeze on my leg, and it (puss) would just ooze out and one time he
mentioned, maybe it is a blood clot.
We are in June now, the 5th. He decides he'd better go in and
take the plate and screws out. It's June 7th, he took the hardware
out. The infection had eaten my flesh away, and some bone along with
it. Actually it had spread into my bone. Now I have osteomyelitis (a
bone disease). I thought I was going to lose my whole foot & part of
my leg! Where did they get this doctor from? I had a lot of
unanswered questions? I was worried, I was in pain and I was scared.
Two days later, I got another visit from another doctor he wants
to put a groshong catheter in my chest. Why? I ask. I needed to be
on vancomycin (one of the strongest antibiotics used to control
osteomyelitis.) I have that surgery on June 9th. The doctor assured
me I wouldn't feel a thing. I was to be given a local to deaden my
chest area. Well, the local didn't work. I was awake through \3/4\
of the operation talking with the doctor & the nurses. Have you ever
heard of a doctor going through with an operation when the patient
was awake? I could feel those tubes running down to my heart. It did
hurt but I tried to be strong & not let the pain get to me too bad.
The first doctor, he called in a plastic surgeon. He was to try
to fill in this hole in my leg (that hole was left by the first
doctor after he took plate & screws out, where the flesh had rotted
away.) So the plastic surgeon, cut a flap in the back of my leg to
fill in the original hole. It was done on June 13th. Then I laid in
the hospital bed for a week and couldn't move. The 3rd doctor said
let's keep our fingers crossed to make sure this takes (skin graft).
Also the 3rd doctor said to me ``if I were in your shoes, or one
of my family members, I wouldn't be real upset with doctor #1.'' Can
you believe what he told me? I came so close to losing my foot and
he had the nerve to say something so foolish!
On June 20th, the gal from the Heartland Home Health Care came
in and said, ``We've got you all signed up for H.H.C.'' I wanted to
know why and she said ``because you'll have a nurse come over & make
sure you get the vancomycin twice daily.'' The nurse from H.H.C.
told me it was kinda expensive. They had contacted my insurance co.
and they agreed to pay 80%. We had to pick up the 20%. I thought it
(the price) couldn't be real bad. But I was wrong. Each bag of
medicine was $65.00. Thats $130.00 a day. I was on this medicine
from June 21st to August 24th. The nurse came out almost weekly to
draw blood for tests. The 1st doctor told me I wouldn't be on it
(vanco) for long. He was wrong. I was dismissed from hospital June
21st.
There was no mention I could have gotten another Home Health
Care Provider, in fact I was shocked to learn, other ones were out
there, & that they may have been cheaper. I guess you could call me
stupid, but after this nightmare, I have really opened my eyes. Each
visit with a nurse was over $100.00.
These people must think we are made of money. My husband is a
welder, at a plant here in town, and he doesn't make alot of money
for 4 people to live on. We rent the house we live & our fortunate
to have 2nd hand vehicles to drive. Our kids get hand me down
clothes.
So you see we don't have a lot of money, and Heartland doesn't
help when they have such high prices for their services, and they
need to stop monopolizing the St. Joe area.
By the way, my 1st doctor told me after I asked him a few times.
(``I had picked up the stupid infection from the hospital from the
surgery.'') Isn't that a kick in the ass? Now, we have all these
hospital bills & doctor bills to pay. And I have a scarred up leg to
show for it. And the doctors & hospital are getting richer for their
mistakes. If you know anyone that could help me I would appreciate
it!
Sincerely,
Kathy S. Smith.
October 17, 1995.
Gail Kursh,
Chief, Professions and Intellectual Property Section/Health Care
Task Force, Anti-Trust Division, U.S. Department of Justice, 600 E
St., NW., Room 9300, Washington, DC 20530
Re: Heartland Referral Policy--consent decree page 13B-1
As a prior patient of Heartland Hospital, choices in health care
providers were not given at the time of discharge.
I believe upon being admitted to the hospital, information on
all agencies should be provided to all patients.
Being advised to check the phone directory is not a logical
solution.
Kathy S. Smith.
VIP Home Nursing & Rehabilitation Service, Inc.
51 Century Boulevard, Suite 308, Nashville, Tennessee 37214, (615) 883-
9816, (800) 826-8998
November 17, 1995.
Gail Kursh,
[[Page 29815]]
Chief, Professions & Intellectual Property Section/Health Care Task,
Dept. of Justice, Antitrust Division, 600 E. Street, N.W., Room
9300, Washington, DC 20503
Re: United States vs Health Care of Northwest Missouri, Inc. Case
No.: 95-6171-CV-SJ-6
Chief Kursh: In response to the above case/proposal, I would
like to put some light on this proposal as far as freestanding
providers are concerned.
Here in Middle Tennessee we feel like the unwanted step-child as
far as hospitals are concerned.
Approximately ninety percent of the hospitals, large and small,
now have their own in-house home care service.
We are told by the discharge planners:
1. We rotate our patients to assure equitable referrals to all
providers in the area.
This is hogwash! We have called on some hospitals in the Middle
Tennessee area for over a year and still do not get patients from a
good portion of them. Or, if we do get a patient, it is because the
patient has requested VIP (which has been overridden before), or the
patient may live in an outlying area where the hospital home health
cannot service due to distance. (VIP has six offices covering 22
counties.)
2. We have been told point blank that unless the patient
requests a certain home-health agency, they will automatically be
placed with the hospital home health service.
3. We have seen instances where the hospitals are referring
patients to their home health, without any input from the patient's
physician. Sometimes the physicians get upset over this issue,
because in some cases the hospital home health apparently doesn't
provide the level of care that the physician would like to see.
4. Some of the smaller hospitals in the area have been in very
poor financial condition. These have been bought out by another
hospital that has an in-house home nursing service. The physicians
in the area were so appreciative to be able to keep a hospital open
in their area, that we have been told by the physicians that they
will only use the hospital's in-house service because they feel so
indebted to the new hospital.
5. Another hospital in this area was in the ``red'' and due to
close in three to six months. A freestanding home nursing service
contracted with them to run a home health service for them. The home
nursing service, to my understanding, paid the hospital $3,000 a
month to rent space (this is a very small town). The home nursing
service has one of their own employees making rounds to the patients
up for discharge, to check with them about their home health needs.
The home nursing service is signing up patients left and right for
their service. This is considered fraud under Medicare rules.
Freestanding services are restricted by Medicare of direct
solicitation of patients!
Do you see where our frustrations are coming from?
These in-house hospital home health services do not need to be
given any additional power on referrals. They already have a captive
patient population.
Passing this proposal would be a true slap-in-the-face for all
freestanding providers of home nursing. Instead of a few crumbs, the
step-children need a whole piece of the cake for a change!
Please help us!
Best regards,
Kay Smith,
Director of Patient Services.
November 17, 1995.
Ms. Gail Kursh,
Professions & Intellectual Property Section/Health Task Force, Dept.
of Justice, Antitrust Division, 600 E. St., N.W., Room 9300,
Washington, D.C. 20530
Re: United States v. Health Choice of Northwest Missouri, Inc., et
al., Case No. 95-6171-CV-SJ-6
Dear Gail: My comments on the above case for hospital discharge
planners are that the hospital should provide the patient with a
list of area providers who handle that patient's needed service. The
hospital should have the right to have their own service listed
first, and give to the patient any material the hospital has
prepared for that service organization.
The balance of the list should include, in alphabetical order,
all other service providers who request to the hospital to be
included on the list. The list should not encompass an area of more
than 50 miles from the hospital. The hospital should be allowed to
print a disclaimer that they cannot speak to the quality of care the
other listed providers provide.
Thank you,
Michael W. Thomas,
4518 Forestwood Drive, Parma, Ohio 44134.
Our Lady of Mercy Medical Center
600 East 233rd Street, Bronx, New York 10466-2697, Phone: (718) 920-
9000
November 16, 1995.
Gail Kursh,
Chief, Professions and Intellectual Property Section/Health Care
Task Force, Department of Justice, Antitrust Division, 600 East
Street; N.W., Room 9300, Washington, DC 20530
Re: Case # 95-61-71-CV-SJ-6, United States v. Health Choice of North
West Missouri, Inc. et. al.
Dear Chief Kursh: I want to applaud your recommended Home
Health, DME, and hospital referral policy for Heartland Hospital. It
is appropriate that a hospital with their own home health agency
refer patients to their own excellent, fully accredited agency.
Our agency does not keep statistics but we get frequent calls
from patients when other agencies do not visit them within 24 hours
of discharge from the Medical Center. It is hard to recommend other
agencies!
Thank you for your support of the hospitals and their home
health agencies.
Sincerely,
Rose M. Rosenberg,
DPS/Administrator, Home Health Agency, (718) 920-9030.
Hill Country Health Services, Inc., dba Hill Country Home Health
P.O. Box 909, Lampasas, Texas 76550, 512-556-8293, Fax 512-556-3591
November 20, 1995.
Gail Kursh,
Chief, Professions and Intellectual Property Section, Health Care
Task Force, Dept. of Justice, Antitrust Division, 600 E. St. N.W.,
Room 9300, Washington, D.C. 20530
Re: United States vs Health Choice, Northwest Missouri, Inc., et al,
Case No. 95-6171-CV-SJ-6, U.S. District Court, Western Division of
Missouri
Dear Ms. Kursh: I would like to comment on the above case
involving home health referrals from hospitals. As the owner/
administrator of a free-standing home health agency in Central
Texas, we deal with numerous hospitals and home health patients.
In our service areas, we have encountered hospital discharge
planners participating in self dealing by referring predominately to
hospital based home health agencies. The patients are told ``your
doctor has ordered home health and we will have a nurse out to see
you tomorrow.'' These patients are not given a choice of available
agencies.
Many times, our former patients have requested our agency
because of particular caregivers. They have been told by the
discharge planner that these care givers do not work for us anymore,
when in fact they do still work for us.
I believe in competition but it is really hard to compete
against a monopoly.
In accordance to published Fraud Alerts (see attached), it is
against the law to offer anything of value to induce a referral. If
a hospital supervisor tells a discharge planner ``if you want to
keep your job, you WILL refer patients to our (hospital based) home
health agency'', then I feel this violates the intent and the letter
of the law.
Your proposals in the aforementioned case falls far short of
``leveling the playing field''. I would like you to consider forcing
hospitals to do the following:
a. Allow patients to exercise their right of freedom to choose
their beneficiaries.
b. Allow non-hospital based providers to visit their former
patients in the hospital.
c. Where no provider is specified by the physician or the
patient, provide a list of eligible providers in the area so that a
patient can exercise their right to choose their provider.
d. Make sure that discharge planners are not coerced by
supervisors to violate Medicare Antitrust, and the Federal Trade
Commission's laws by doing self referrals in order to keep their
jobs.
Thank you for your attention to this matter and I trust that the
Justice Department will rule in favor of all; the patients and those
of us that compete on the currently unlevel playing field.
[[Page 29816]]
Sincerely,
Ron Julian,
Administrator.
Dennis O. Davidson, M.D.
A Member of Arkansas Family Care Network, Arkansas Physician
Management, Inc.
2000 Harrison St., Suite D, Batesville, AR 72501
Mailing Address: P.O. Drawer G, Batesville, AR 72503
November 19, 1995.
Gail Kursh,
Chief, Professional & Intellectual Property Section/Health Care Task
Force, Department of Justice, Antitrust Division, 600 E. St., N.W.,
Room 9300, Washington, D.C. 20530
Re: U.S. vs Health Choice of Northwest Missouri, Inc., et al, Case
No. 95-6171-CV-SJ-6 in the U.S. District Court for the Western
District of Missouri.
Dear Ms. Kursh: I am enclosing a copy of an article from Home
Health Line dated 11-13-95 pursuant to the above captioned case.
Please know at first that I own no interest in a Home Health Care
Agency. The DOJ has made an error. In short, you have given the
hospital the monopolistic power to slant probably near 100% of their
referrals to their home health agencies. Discharge planners in the
hospital are people hired by the hospital. Who but the hospital will
they recommend referral to. You are not giving any equal
accessibility to the patient's to other home health agencies.
Hospitals also work out various deals with physicians and these
physicians are eager to send all of their patient's to the hospital
home health agencies anyway.
This decision is so unreasonable and stinks so badly that I am
sending copies of this letter and article to all my senators and
congressmen. I hope that they have the good insight to bring up some
sort of law that puts a stop to a decision of this caliber. I cannot
for the life of me understand that you can feel that there is any
equity or justice in this decision.
Thank you for the opportunity for presenting my written comment.
Sincerely yours,
Dennis O. Davidson,
DOD/bjr.
cc:
Senator Dale Bumpers
Senator David Pryor
Senator Steve Bell
Congresswoman Blanche Lambert
Alternacare Home Health Services, Inc.
414 E. Main St., P.O. Box 2591, Lancaster, OH 43130-5591, (614) 653-
2224, (614) 653-1333 FAX
November 21, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Dare Task
Force, Department of Justice, Antitrust Division, 600 E. St. NW,
Room 9300, Washington, D.C. 20530
Dear Ms. Kursh: I would like take the opportunity to share my
viewpoint regarding the case United States vs. Health Choice of
Northwest Missouri, Inc., et al. It has been my experience that
hospitals do not present the home health choice available to
patients who are being discharged from a hospital. The discharge
planners at our local hospital inconsistently provide the written
list of choices--but rather verbally inform the patient of a select
few. (The local hospital has a home health agency.)
It is not the responsibility of the hospital to ``credential''
or endorse any agency. Rather, it is the patient's right to be made
aware of choices and have those choices honored. The hospital can
simply provide the facts, via a brochure from each agency, and allow
the patient to make their selection.
This same unfair practice of referring to hospital-owned
agencies/companies is also occurring in the Durable Medical
Equipment area of services and providers.
The referral policy of Heartland Health Systems, Inc. (St.
Joseph, MO) is unfair and should not be acceptable. In the
recommended referral policy, the choice is made for the patient,
unless they choose another option. Certainly it is clear that this
is not in accordance with the regulations requiring patient choice.
Instead, the patient should be provided with available services
(again with printed brochure), then permitted to make a choice. If
the patient than has no preference, then a system of rotating the
referrals to the local agencies may be considered as equitable.
Please consider carefully before approving any policy for
referrals as proposed by Heartland Hospital.
Sincerely,
Diane Flowers-Stuckey,
Director.
The Lee Visiting Nurse Association, Inc.
P.O. Box 415, Lee, Massachusetts 01238, Telephone (413) 243-1212, FAX
(413) 243-4215
November 20, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Department of Justice, Antitrust Division, 600 E St., Room
9300, Washington, D.C. 20530
Re: U.S. v. Health Choice of Northwest Missouri, Inc., et al., Case
No. 95-6171-CV-SJ-6 in the U.S. District Court for the Western
District of Missouri
Dear Ms. Kursh: The referral policy recommended by the DOJ for
Heartland Hospital is highly prejudicial. ``Choice'' is most
certainly diluted and may be seen as a very subjective term when
used by a hospital discharge planner with affiliation to a specific
home care agency.
Having experience in this area, I can imagine a patient being
given a ``choice'' of a particular agency which is in fact more of a
recommendation, a directive, or a preference depending upon the
approach of the discharge planner. Most patients lack knowledge in
this area and tend to rely upon the advice of the discharge planner:
It is unusual for a patient to state a specific choice. However, if
a patient expresses uncertainty and then is directed to a phonebook
to ``choose'', this seems less than supportive or helpful in any
way. Hence, choice is not a ``choice,'' and is, instead, a sort of
punitive arrangement whereby the discharge planner essentially
denies the patient assistance in ``choosing.''
How perverse! Choice is a word loosely interpreted these days,
but since when is self-referral considered a ``choice?'' Only the
most savvy, assertive patient could navigate such a system.
Antitrust is dead if this is how the courts elect to interpret the
patient's right to choose.
Sincerely,
Paula Schutzmann,
Executive Director, Certified Case Manager.
Sun Management Services
61 Duke Street, PO Box 232, Northumberland, PA 17857, 99 South Cameron
Street, Harrisburg, PA 17101, 1-800-577-5514
November 20, 1995.
Ms. Gail Kursh,
Chief, Professions and Intellectual Property Services, Health Care
Task Force, Department of Justice, Antitrust Division, 600 E.
Street, NW., Room 9300, Washington DC 20530
Re: United States Health Choice of Northwest Missouri, Inc., et al.,
Case Number: 95-6171-CV-SJ-6
Dear Ms. Kursh: It is with great concern that I read the
proposed settlement as it related to the recommended home health,
DME, and Hospice referral policy for Heartland Hospital.
The policy repeatedly stated that ``if the patient has a
preference, that preference shall be honored.'' We believe, however,
that the policy does nothing to ensure even a minimal level of
knowledge by the patient.
This policy is the equivalent of asking a patient's permission
for major surgery without providing any information regarding risks
or outcomes.
Patients at a minimum should be informed of other providers and
be provided equivalent marketing materials that are used by the
hospital. Patients should be offered access to other provider's
staff for the purpose of evaluating options.
The argument by Heartland's Attorney, Thomas Watkins, that
``there is no hospital in the world that is going to want to bless
somebody else's home health agency when they cannot be responsible
for care. We cannot be in the position of educating the patient--we
don't have the information'' is ridiculous.
Other providers are more than happy to provide the hospital and
the patient the information required to make an informed decision.
Hospital Social Service Departments routinely provide information
about community resources. To allow them to act differently in areas
where the hospital has a vested financial interest is questionable
ethics at best.
The recommended referral policy not only provides inadequate
access to information ensuring a patient's ability to make an
informed choice but also provides the
[[Page 29817]]
hospital opportunity to be discriminate in terms of what patient it
chooses to serve.
It is common today for patients simply to say yes to home health
referrals; allowing the hospital to self refer desirable patients
and to farm out to other provides those they wish not to serve.
We believe that the recommend policy protects the hospital's
vested investments at the expense of an informed patient choice and
suggest appropriate revisions be required.
Sincerely,
Steven Richard,
Senior Advisor.
Armstrong, Teasdale, Schlafly & Davis
A Partnership Including Professional Corporations
Attorneys and Counselors
1700 City Center Square, 1100 Main Street, Kansas City, Missouri 64105,
(816) 221-3420, Fax (816) 221-0786
November 21, 1995.
Via Federal Express
Ms. Gail Kursh, Esq.,
Chief, Professions and Intellectual Property Section, Health Care
Task Force, Department of Justice, 600 E Street, NW., Room 9300,
Washington, DC 20530
Re: Objections and Comments of the Coalition for Quality Healthcare
to the Proposed Final Judgment pending in United States v. Health
Choice of Northwest Missouri, Inc., et al., Civil Action No. 95-
6171-CV-SJ-6, Western District of Missouri, as published in the
Federal Register, Tuesday, October 3, 1995
Dear Ms. Kursh: This law firm represents the Coalition for
Quality Healthcare (the ``Coalition''), a nonprofit Missouri
corporation organized to assure consumer access to timely and
relevant information and to promote competitiveness in the
healthcare field. This letter constitutes the formal Comment and
objections of the Coalition to the proposed Final Judgment pending
in the above-referenced matter.
By way of background, the Coalition is comprised of concerned
citizens and providers of ancillary healthcare services in Northwest
Missouri, including St. Joseph, Missouri and its surrounding areas.
Members of the Coalition include owners of long-term care
facilities, home health care agencies, pharmacies, medical equipment
companies, and other service oriented businesses operating in the
healthcare field.
The Coalition members firmly believe that the proposed Final
Judgment is not in the best interest of the public primarily because
the proposed Final Judgment contains a provision requiring Heartland
Health System, Inc. (``Heartland'') physicians to follow the
Heartland ``Referral Policy'' if a Patient needs ancillary services
upon discharge from acute care. Comparison of the provisions of the
proposed Final Judgment to the Complaint reveals the anomaly that
the Complaint focuses exclusively on defendants' efforts to
foreclose competition from other managed care plans in Buchanan
County. Heartland's Referral Policy is not mentioned in the
Complaint and seems to have been improvidently added to the proposed
Final Judgment.
The proposed Heartland Referral Policy denies patients the right
to make an informed choice among ancillary service providers in the
Northwest Missouri area. Specifically, the Coalition urges the
Department of Justice to remove the Heartland Referral Policy from
the proposed Final Judgment for the following reasons:
A. The Referral Policy is not in the Public's interest because
it prevents patients from making an informed choice regarding
Ancillary Services:
* The proposed policy would allow the doctor to initially order
that a particular ancillary service provider be used, rather than
allow the patient to choose freely among any of the ancillary
service providers in the Northwest Missouri area. Because Heartland
employs or is otherwise associated with the majority of physicians
with staff privileges at Heartland's hospital, doctors will
routinely order Heartland ancillary service providers for the
patient. Hospital patients requiring ancillary services are
frequently elderly, in ill health and are unlikely to question, let
alone contest, a doctor's order, or understand the basis for the
recommendation.
* Even if the doctor does not designate a certain ancillary
service provider, the patient is nonetheless steered to Heartland.
Under the proposed policy, the patient is only informed that
Heartland has excellent, fully accredited ancillary services
available and then the patient is given a Heartland brochure. The
patient is not informed about the availability of any competing
ancillary service providers in the Northwest Missouri area.
* If the patient rejects Heartland's ancillary service
providers, or specifically asks what other providers are available,
the patient is not given the names of or any information about non-
Heartland providers. Rather, the patient is told that Heartland
cannot provide any information about or recommend any of the other
ancillary service providers and the patient is then merely referred
to the telephone book to look for other providers.
* As a result of the foregoing, the Consumer is denied timely
and equal access to sufficient information on ancillary service
options and quality to make an informed choice.
B. Heartland, through its Referral Policy, effectively
monopolizes the ancillary services market within Heartland's
geographic service region, resulting in antitrust injury to other
ancillary service providers:
* Heartland, located in St. Joseph, Missouri, is the only acute
care facility in Buchanan County. The closest comparable facility is
North Kansas City Hospital, located in Clay County, Missouri, 60
miles south of St. Joseph.
* Patients from private (non-Heartland) long-term care
facilities who are transferred to Heartland's hospital for acute
care are not returned to the private facility upon discharge, even
if the patient had been a long term resident of the private
facility. Rather, the patients are transferred to either Heartland's
skilled nursing facility, which charges a higher daily rate than
comparable facilities in the community, or to Heartland's
rehabilitation center. The patients are then kept in these Heartland
care facilities until medicare days are exhausted. The patients are
only returned to their former private facility if Heartland does not
want them or if the patient's funds are depleted.
* Patients of private Home Health Care agencies experience
similar exclusion from their prior provider. Patients who have been
cared for by a non-Heartland home health care agency prior to being
admitted to Heartland's hospital are not returned to that agency
upon discharge. Instead, patients are being directed to Heartland's
home health care unless the patient objects to the doctor's order or
recommendation to use Heartland. Because patients are often elderly,
infirm and forgetful, they do not know that they can object to a
change in home health care providers and insist that their former
agency resume care upon the patient's discharge.
* Heartland hospital staff do not give notice to a patient's
prior ancillary service provider when that patient is to be
discharged from the hospital. In some instances, prior providers
report that their patients have been home for two to four days with
no follow-up care by their home health care agency because the
hospital failed to notify the former provider of the patient's
discharge. This is grossly harmful to the patient and greatly
affects the quality of the patient's care.
* Failure to give notice of a patient's discharge also prevents
the prior ancillary service providers from taking part in discharge
planning for their patients, thus preventing the providers from
competing in the marketplace for the patient's business. Providers
report having been specifically denied the opportunity to
participate in discharge planning meetings for their patients.
* Owners of private long-term care facilities and home health
care agencies uniformly report a significant loss in revenue and
patient census since Heartland began its Referral Policy which
effectively eliminates a patient's choice.
* An institutional pharmacy which serves 60 nursing homes in St.
Joseph and the surrounding area has lost significant amounts of
business due to the overall loss of private nursing home patients to
the Heartland system. Heartland's own pharmacy services the needs of
patients using Heartland's ancillary services.
C. The Heartland Referral Policy and the proposed Final Decree
have no accountability provisions to ensure that Heartland Hospital
patients, and patients of Heartland's physicians, are being given
sufficient, unbiased information to allow the patient to make an
informed choice among all available ancillary service providers.
D. Taken together, the foregoing considerations concerning the
Heartland Referral Policy, Heartland's physician practice and
recruitment efforts, and Heartland's other conduct create conditions
that facilitate unlawful maintenance of monopoly power by Heartland
through anticompetitive and coercive means,
[[Page 29818]]
conditions conducive to a successful attempt by Heartland to
monopolize the ancillary services markets in Northwest Missouri and
Northeastern Kansas, and conditions that permit Heartland to channel
or steer patients in need of ancillary services only to providers it
owns, controls, or in which it maintains a significant economic
interest.
The antitrust concerns in this situation are clear, the most
significant of which is foreclosure from referrals. The proposed
Referral Policy will only exacerbate this situation and ultimately
will result in an insufficient number of referrals for Heartland's
competitors in ancillary services to remain viable. This, in turn,
will increase Heartland's market power substantially and create the
risk of enabling Heartland to raise and sustain prices above those
which would otherwise prevail in a competitive marketplace, or lower
the quality of care. Whether analyzed in terms of Heartland's
efforts to engage in exclusive dealing agreements, tying
arrangements, reciprocal dealing agreements or monopolization and
attempted monopolization, via predatory refusals to deal, abuse of
essential facilities, or monopoly leveraging, the anticompetitive
effects, which are contrary to the public interest, are apparent.
The Coalition is currently drafting a model Referral Policy
which allows patients to make an informed choice among all ancillary
service providers in the St. Joseph and surrounding regions. We will
provide the Department of Justice and the District Court with a copy
of the model Referral Policy, along with arguments and authorities
in support of its adoption, within the next 10 days.
While the ancillary services Referral Policy is of paramount
importance to the Coalition, other terms and conditions of the Final
Judgment give unfair competitive advantage to Heartland in the
primary care physician market. The Coalition specifically objects to
the following provisions in the Final Judgment:
A. Part VIII: Heartland Permitted Activities
* Subpart (B)--Allows Heartland, without preapproval from the
DOJ, to employ or acquire an unlimited number of physicians who are
not currently located in Buchanan County, so long as less than 20%
of the physician's income was derived from patients living in
Buchanan County;
* Subpart (C)--Puts no limit on the number of new doctors that
Heartland can bring into Buchanan County to work for Heartland (as
employees or through acquiring their practice), so long as Heartland
incurs substantial costs in recruiting the doctors, or gives them
substantial financial support or income guarantees. Even though the
acquisitions require prior notice to the DOJ, approval is given if
the financial criteria are met.
* Subpart (D)--Allows Heartland, with prior DOJ, approval, to
acquire the practice or employ any physician who finds he or she
cannot practice in Buchanan County unless hired by Heartland. This
provision underscores the real effect of Heartland's monopoly power,
i.e. if independent physicians cannot compete successfully with
doctors owned by Heartland, they have to join Heartland to survive.
* The practical effect of the foregoing provisions is that
Heartland's physician base will continue to grow and monopolize the
market for GAPC physicians in Northwest Missouri and Northeast
Kansas, leaving sole practitioners with little choice but to join
Heartland or move their practices elsewhere.
B. Part X-XI: Compliance Program / Certifications
* Requires only self-reporting of Heartland's proposed
acquisitions or other actions covered by the Final Judgment and an
annual certification by the defendants that the Final Judgment terms
are being adhered to.
* Although the DOJ is to be given ``access'' to defendant's
records and personnel and the right to obtain written reports from
any defendants, there is no requirement that written reports be made
to the DOJ by any of the defendants, and no requirement that the DOJ
will conduct annual, or better yet, semi-annual inspection of books
and records and interview of personnel.
* Without an affirmative requirement of regular, periodic
written reports or DOJ inspections to determine compliance, it will
be virtually impossible to determine whether violations of the Final
Judgment have occurred.
* The proposed Final Judgment should give the Court broader
powers to monitor and enforce the final judgment. For comparison,
see Judge Oliver's opinion in United States v. Associated Milk
Producers, Inc., 394 F.Supp. 29, 46 (W.D. Mo. 1975), entering a
Supplemental Order establishing the manner in which alleged
violations of a final judgment entered upon a proposed consent
decree should be brought before the Court for appropriate judicial
enforcement proceedings.
The Coalition welcomes the opportunity to engage in meaningful
discussions with the Department of Justice to clarify and supplement
the foregoing arguments and to assist in any manner possible to
assure that the Final Judgment in this case is truly in the public's
interest.
The Coalition looks forward to a response from the Department of
Justice to this Comment.
Very truly yours,
Glenn E. Davis, Esq.
Thomas M. Bradshaw, Esq.
Dianne M. Hansen, Esq.
DMH/kag
cc: Coalition for Quality Healthcare
The Hon. Howard F. Sachs, Sr. District Judge
Clerk of the District Court, Western District of Missouri
Bennett C. Rushkoff, Esq., Assistant Attorney General for the
State of Missouri
Ozarks Medical Center
1100 Kentucky Avenue, P.O. Box 1100, West Plains, Missouri 65775, (417)
256-9111, FAX (417) 257-6770
November 17, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section, Health Care Task
Force, Department of Justice, Antitrust Division, 699 E Street,
N.W., Room 9300, Washington, DC 20530
Re: United States v. Health Choice of Northwest Missouri, Inc., et
al., Case No. 95-6171-CV-SJ-6, U.S. District Court for the Western
District of Missouri
Dear Ms. Kursh: I am writing in support of the proposed final
judgement for the above mentioned case, specifically related to the
discharge process and referrals to hospital-based HHA, DME and
hospital affiliates.
As a hospital vice president, I repeatedly see the discharged
process interrupted and made complex by demands that every
ambulatory care provider within an hour's drive to our hospital be
given access to and, in some cases a guaranteed referral to,
patients being sent home for recuperation. OMC demands that
discharge workers recite a carefully crafted script that does not
mention our many years of quality service and coordination with
inpatient services just so that external firms will not claim that
we are hoarding referrals to ourselves.
I am especially in opposition to the guidelines suggested by the
Coalition for Quality Healthcare. These guidelines, as I understand
them, would further drive a wedge between hospital inpatient and
outpatient businesses. They would also require hospitals to use a
rotational system for referrals among all area providers. This is,
in effect, stating that just by starting a new business someone is
automatically guaranteed a proportional share of business,
irrespective of quality, service or their commitment to the
community. The guidelines would also require hospitals to permit
freestanding providers a large degree of visitation access to
inpatients on hospital property. This would be especially onerous to
patients and families during times of illness and crisis. External
sales personnel could not be kept from repeated unwanted intrusions
into the patient's care setting.
I urge the Department of Justice to stand behind it's initial
HHA/DME guidelines. This would permit better coordination of patient
care without fostering undue intrusion into the care environment.
Yours truly,
Jeffrey B. Johnston,
Vice President for Operations.
Idaho Home Health, Inc.
800 Yellowstone Ave., Pocatello, ID 83201, (208) 232-1122, (800) 491-
2224, fax (208) 232-7941
November 16, 1995.
Gail Kursh,
Department of Justice, Antitrust Division, 600 E St. N.W. Room 9300,
Washington, D.C. 20530
Re: Home Health Referral Protocol
Dear Ms. Kursh: We understand the Department of Justice will
receive input regarding the recommendations for home health
referrals proposed in the United States v. Health Choice of
Northwest Missouri case. Enclosed are several instances of hospital
channeling we uncovered in Idaho. If the DOJ
[[Page 29819]]
intends the recommendations only apply for Antitrust issues this
distinction should be clearly and expressly stated so entities will
not apply it to non anti trust matters. If that is the intent,
however, we suggest the recommendations be broadened to include 42
USC 1395a issues. Hospital patient channeling and violation of
patient choice are the top issues facing proprietary agencies today.
For your information, in Idaho during 1993 if proprietary home
health agencies rather than hospital based agencies had provided the
Medicare home health visits the Medicare program would have saved
millions of dollars. It goes without saying historically Hospital
based home health visits ar
This text is long and has been trimmed here. Open the source document for the complete record.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.