American Medical Association Counsel for Chicago Medical Society February 18, 1993

American Medical Association Counsel for Chicago

Medical Society
February 18, 1993
Dear Judy:

This will provide a response to your January 14 letter in advance of our teleconference scheduled for Monday, February 22. As we discussed by telephone today, the American Medical Association and Chicago Medical Society petition essentially seeks a modification of the Jowa Dental Association opinion, 99 FTC 648 (1982), such that medical societies would be able to (1) compel members to participate in fee peer review and (2) discipline egregious fee gougers. We do not seek specific Commission approval for the detailed procedures that would be followed by medical societies. I understand that you require a better understanding of that process in order to respond appropriately to our request. In that light, following are brief responses to the four issues raised in your recent letter. I expect that our teleconference on Monday will flesh out these points. 1. Standards for Review of Fees.

An excessive fee will be one that, in the professional judgment of committee members, is unreasonable in light of the criteria set forth in Opinion 6.05. A range of usual and customary fees will be used as a benchmark by which to judge the fee in question, but will not provide a complete answer to whether the fee is reasonable. The fee review committee will compare the fee in question to the range of usual and customary fees charged for the service by comparable practitioners. The range will be determined using the knowledge and experience of the committee members, as well as the opinion of consultants when necessary. However, the purpose of fee peer review is

Advisory Opinion 117 F.T.C.

not to enforce compliance with an acceptable range of fees. Rather, it is to identify instances when, under all relevant circumstances, a fee in unreasonable.

A fee found to be unreasonable will usually result in efforts to mediate the patient’s complaint. However, a second level, or standard, is triggered when a fee is so high as to border upon fraud. A fee of this kind, 50 percent or more above the range of usual and customary, would provide grounds for disciplinary action. A pattern of excessive fees could also subject a physician to the threat of discipline. 2. Operation of Patient Grievance Committees. The committee response would be in writing to the complainant. No specific fee figures would be presented or recommended. The substance of the committee response would be that the fee was in a reasonable range, above the range or below it. There would be no routine collection of fee data, such as in the form of an average fee schedule. Fee data may be collected in exceptional cases when necessary to provide a benchmark range of usual and customary. In this instance, the opinion of consultants would be sought on an ad hoc basis. The data received would be used for the individual complaint at issue only, maintained as confidential, and not publicly disclosed.

No face to face meeting of patient and physician, under the auspices of the medical society, would generally occur. Patientphysician discussion and attempted resolution of disputed fees are usually recommended before the filing of a grievance. Physicians against whom a complaint is filed will be invited to meet with the committee, when necessary, to provide information or discuss a proposed resolution of the matter.

Where “fee gouging” occurs and disciplinary action is taken by the society, the results will be a matter of public record and treated precisely as any other disciplinary action. Opinions on whether insurance company reimbursement is within the range of usual and customary will only be rendered where an insurance company files a complaint.

AMERICAN MEDICAL ASSOCIATION 1131
1091 Advisory Opinion
3. Patient Information Issues.

The American Medical Association and Chicago Medical Society seek to address the inability of the profession to discipline physicians who egregiously overcharge. In such cases, the patient has usually not provided informed consent to a fee that is significantly in excess of the range of usual and customary fees. (If they have, no medical society action will be taken). In general, patients lack adequate information about physicians’ fees. The AMA has sought to address the problem of consumer information about physicians’ fees. At its 1992 Annual Meeting, the House of Delegates adopted a resolution which encouraged physicians to post the price of their services. Discipline of fee gougers will add to the public’s information about physicians. Patients often call local medical societies for physician referrals. Information on disciplinary actions taken against a physician will be given upon inquiry. Moreover, disciplinary actions will often be reported by local media, and provide a source of information to the public.

4. Physician Discipline.

The vast majority of physicians are ethical. When the few who are not learn that disciplinary action may be taken if they egregiously overcharge, we believe that the practice of overcharging will diminish significantly. It is critical that medical societies have the ability to enforce their ethical codes. They have no other way of assuring that their members meet the standards of the profession. Without the threat of discipline, medical societies are powerless to protect the public by distinguishing ethical physicians from those who are not. Sincerely, Michael L. Ie