Antitrust Officials Target Insurers

WASHINGTON —  U.S. antitrust regulators are stepping up scrutiny of health insurers, concerned that competition in the industry may have been crimped by a recent wave of mergers, a Justice Department official said Monday.

Health insurance companies have become an “area of primary concern” to the department’s antitrust division, said Deputy Assistant Atty. Gen. Deborah Majoras, who made her comments at the Federal Trade Commission antitrust conference.

“For consumers to benefit from competition in health-care markets, sufficient competition must be maintained not only among providers but also among the health plans that purchase the providers’ services on behalf of their plan members,” she said.

As a result, antitrust officials will pay close attention to any new mergers among health insurers.

Majoras said regulators recently had investigated possible collusion among health insurers in one major U.S. city but declined to elaborate.

In another example, she said officials have looked into complaints from doctors in Philadelphia who had questioned a clause in their contract that gave providers more favorable reimbursement rates if the doctors agreed to participate in all of the insurer’s plan offerings.

Officials from the health insurance industry at the conference said they were not concerned by the Justice Department’s scrutiny.

“I’m not aware of any anti-competitive activities at all,” said Stephanie Kanwit, general counsel for the American Assn. of Health Plans.

Kanwit described the Justice Department’s oversight as “business as usual” and said increasing consolidation among doctor groups, rather than health insurers, had pushed up the cost of health care.

But Majoras said the increasing focus on health insurers has been triggered by the spate of mergers that have reduced the number of competitors in recent years.

From 1995 to 2000, there were more than 350 mergers involving health insurers or managed-care groups, American Medical Assn. President Donald Palmisano told the same conference.

The 10 largest national insurance companies, including WellPoint Health Networks Inc. and Aetna Inc., cover more than half of all people who are insured in the United States, Palmisano said.

The FTC and Justice Department share responsibility for antitrust enforcement.

Last month the FTC settled charges against eight groups of Denver-area doctors, whom the commission accused of fixing fees to raise the cost of their services.

The doctors’ biggest trade group, the AMA, responded Monday by calling on the FTC to “redirect its efforts in health-care antitrust enforcement, to focus on HMOs and health plans, not just physicians.”