Probationary Medicaid RCOs - How Do Physicians Respond Without Subjecting Themselves to Potential Criminal And Civil Liability?

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There are now eleven organizations across the State of Alabama that have been granted probationary certification as Medicaid Regional Care Organizations or "RCO"s. Physicians have begun receiving notices from some of these RCOs asking them to return a letter of intent to participate in the RCO network of providers. RCOs must be able to demonstrate to the Medicaid Agency that they have an adequate provider network in place by April 1, 2015. The RCOs are now on a fast track to put together the Primary Care Networks, and will be sending provider contracts out next. This will be the time that physicians and other providers will be negotiating with the RCOs for the best agreement they can get.

The letters of intent that are being sent out are non-binding on physicians, and merely acknowledge that the physician is willing to negotiate with the RCO. However, the issuance of the letters of intent by the RCOs will trigger discussions among physicians that may have antitrust implications. While an physician who simply sends in a letter of intent is acting individually, if that physician begins discussing with other physicians whether or not the physicians should send letters of intent, the physicians involved in the discussions may be deemed to be acting collectively.

Under antitrust laws, physicians are considered horizontal competitors who compete with each other for patients just as car dealers are horizontal competitors who compete for customers. Any distinction in the law for professions has long been abandoned. Violations of the antitrust laws carry very severe penalties including potential criminal prosecution, trebled damages and an award of the plaintiff's attorney fees. The enormous legal fees involved in defending an antitrust investigation by the Department of Justice or the Federal Trade Commission alone can be devastating to a physician practice.

Readers can download the full article here.

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