Doctors, Hospitals in 2 States Accused of Price-Fixing

The Justice Department charged doctors and hospitals in two states Wednesday with using monopoly power to block lower-priced managed health care systems from competing--in one case for almost a decade.

It was the first time the agency’s antitrust division filed price-fixing lawsuits accusing hospitals of scheming with doctors to ensure their own higher profits while health care costs rise.

Both groups--in Danbury, Conn., and St. Joseph, Mo.--denied the charges. But both also agreed to consent decrees in which they promised to change the way they do business.

“These lawsuits signal that we will not tolerate collusive conduct that drives up health care costs,” said Anne K. Bingaman, assistant attorney general in charge of the antitrust division.

Gail Kursh, chief of the division’s health care task force, said the consent decree settlements must still be approved by a U.S. district court. She believes they could serve as guidelines for burgeoning physician and hospital groups.

Kursh said the Justice Department is investigating several similar cases.

Under the settlements, doctors and hospitals may not:

* Exercise control over staff privileges to reduce competition.

* Condition use of inpatient hospital services on use of outpatient services and certain managed-care plans.

* Condition rates for inpatient services on exclusive use of the hospital’s outpatient services, except under some circumstances.

* Act together to set prices, competitive terms or conditions.

* Preclude or discourage a doctor from doing business elsewhere.

* Provide incentives for doctors to deal exclusively with any insurance or managed-care company.

In Connecticut, the complaint was filed against Danbury Hospital, Danbury Area Independent Physicians Assn. Inc., and HealthCare Partners Inc., a doctor-hospital group with a 50-50 ownership.

In Missouri, the complaint was filed against St. Joseph Physicians Inc., the local hospital, Heartland Health System Inc., and the Health Choice of Northwest Missouri Inc., which the two groups formed.