The American College of Radiology

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IN THE MATl"R OF THE AMERICAN COLLEGE OF RADIOLOGY CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket C-2871. Complaint, Mar. 1, 1977 - Decision, Mar. 1, 1977 Consent order requiring a Chicago, Il., medical association, among other things, to cease developing, publishing and circulating relative value scales which tend to establish prices or otherwise influence fees for medical and surgical procedures and services. Additionally, respondent is required to withdraw relative value scales already published and to send copies of the complaint and order to all recipients of this data requesting the return of all copies of the material.

Appearances For the Commission: Lawrence E. Gray and Judith A. Moreland. For the respondent: James M Nicholson, Nicholson Carter, Washington, D. C. and Paul G. Gebhard, Vedder, Price, Kaufman & Kammholz, Chicago, HI.

COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act as amended, 15 UB.C. 41 et seq., and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that The American College of Radiology has violated the provisions of Section 5 of said Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint stating its charges as follows: PARAGRAPH 1. Respondent, The American College of Radiology ACR"), is a corporation organized, existing and doing business under and by virtue of the laws of the State of California, with its principal offce and place of business located at 20 North Wacker Drive, Chicago, Ill.

PAR. 2. ACR has approximately 12,000 members and fellows who are elected from the ranks of those physicians who have been certified in radiology or one of its Board-recognized branches by the American Board of Radiology or the Royal College of Physicians and Surgeons of Canada, those physicists who have been certified in physics by the American Board of Radiology or the Royal College of Physicians and Surgeons of Canada, and those physicians engaged in nuclear medicine who have been certified as specialists in that practice by the appropriate specialty board which is a member of 144 Decision and Order either the American Board of Medical Specialties or its Canadian equivalent. Such members and fellows elect a majority of the Board of Chancellors which manages the affairs of ACR. PAR. 3. Radiologists are licensed physicians who specialize in the use of X-ray, radium and other radioactive substances, and/or in the use of nuclear medicine and ultrasound and related procedures in the diagnosis and treatment of disease and other physical conditions. Nuclear physicians specialize in tbe use of nuclear medieine and related procedures in the diagnosis and treatment of disease and other physical conditions. Radiologists and nuclear physicians are generally engaged in the private practice of medicine and derive substantial portions of their professional income from fees for medical services charged to patients or to insurers. PAR. 4. The acts and practices of ACR are in or affect commerce as commerce" is defined in the Federal Trade Commission Act. PAR. 5. Since 1958, ACR has, on various occasions, prepared published, and circulated to its members and fellows and others relative value scales" which set forth in non-monetary units comparative numerical values for procedures and services performed by radiologists and nuclear physicians. Each value is convertible into a monetary fee by the application of a dollar conversion factor to the basic unit.

PAR. 6. The preparation, publication, and circulation by ACR of relative value scales have the effect of establishing, maintaining, or otherwise influencing the fees which radiologists and nuclear physicians charge for their professional services and are in violation of Section 5 of the Federal Trade Commission Act, as amended. DECISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondent named in the caption hereof, and respondent having been furnished thereafter with a copy of a draft of complaint which the Bureau of Competition proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondent with violation of Section 5 ofthe Federal Trade Commission Act; and The respondent and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by respondent of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondent that the law has been violated as alleged in such Decision and Order 89 F. complaint, and waivers and other provisions as required by the Commission s Rules; and The Commission having considered the agreement and having provisionally accepted same and placed it on the public record for a period of sixty (60) days, and having duly considered the comments fied thereafter by interested persons pursuant to Section 2.34 of the Commission s Rules, now in further conformity with the procedure provided by Section 2.34 of its Rules hereby issues its decision in disposition of the proceeding against the above-named respondent makes the following jurisdictional findings, and enters the following findings and order:

1. Respondent, The American College of Radiology ("ACR"), is a corporation organized, existing and doing business under and by virtue of the laws of the State of California, with its principal offces located at 20 North Wacker Drive, Chicago, Il. 2. The Federal Trade Commission has jurisdiction over the subject matter of this proceeding and over the respondent, and the proceeding is in the public interest.

ORDER A. The term "relative value scale" means any list or compilation of surgical and/or medical procedures and/or services which sets forth comparative numerical values for such procedures and/or services, without regard to whether those values are expressed in monetary or non-monetary terms.

B. The term "ACR" means the American College of Radiology. C. The term "effective date of this order" means the date of service of this order.

It is ordered, That ACR, its successors, or assigns, and its offcers agents, representatives and employees, directly or through any corporation, subsidiary, division, or other device, shall: A. Cease and desist from directly or indirectly initiating, originating, developing, publishing, or circulating the whole or any part of any proposed or existing relative value scale(s); B. Cease and desist from directly or indirectly advising in favor of or against the use of, or contributing to the whole or any part of any proposed or existing relative value scale(s); Provided, however, that nothing contained herein shall prohibit ACR from furnishing testimony to any government body, committee, or instrumentality, or , .. ..._ ftHJ.Coj.H"".n . '-V""

144 Decision and Order from furnishing to any third party or government body, committee or instrumentality such information as may be requested; to the extent, however, that such information or testimony may bear directly or indirectly on compensation levels for radiological or nuclear medicine services or procedures, it shall be limited to historical data, free of editing or interpretation, and shall be completely described as to methodology;

C. Permanently cancel, repeal, abrogate, and withdraw any and all relative value seales which it has heretofore developed, published circulated, or disseminated;

D. Within thirty (30) days after the effectjve date of this order distribute by first class mail a copy of the Commission s complaint and order in this matter, as well as a letter, in the form shown in Appendix "A" to this order, to each of its fellows and members and to each of the third party payers and others listed in Appendix "B" to this order, instructing such fellows and members and tbird party payers and others to return to ACR all copies of ACR relative value scales in their possession.

It is further ordered That ACR shall notify the Commission at least thirty (30) days prior to any proposed change in its organization which might affect compliance obligations under this order, such as, but not limited to, dissolution, the emergence of a successor corporation, and the creation and/or dissolution of subsidiaries. It is further ordered That ACR shall, within sixty (60) days after the effective date of this order, file with the Commission a written report showing in detail the manner and form of its compliance with each of the provisions of the order.

Nothing in this order shall be construed to exempt The American College of Radiology from complying with the antjtrust laws or the Federal Trade Commission Act. The fact that any activity is not prohibited by this order shall not bar a challenge to it under such laws.

APPE DlX A (ACR LE' EHHEAD) TO: Recipients of ACR Relative Value Studies Decision and Order 89 F. As you may be aware, the FTC has been investigating various components of health care, including relative value scale activities of ACR. The Board of Chancellors of the ('A)llege no longer desires to continue such activities and has discontinued them. It has entered into an agreement with the Federal Trade Commission to formalize the discontinuance of its relative value scales. This agreement resulted in the issuance by the Federal Trade Commission on March , 1977 of a complaint and the entry of a consent order which requires, in essence, that ACR:

(a) stop publishing and participating in the development of relative value scales; (b) withdraw the relative value scales it has already published; (c) distribute a copy of the complaint and consent order to every ACR relative value scale recipient; and (d) instruct all recipients of ACR's relative value scales to return them to ACR. The complaint alleges basically that ACR's relative value scales have the effect of influencing fees charged by radiologists and nuclear physicians. The consent agreement with the :F'TC states that it is for settlement purposes only and does not constitute an admission by the College of the charges in the complaint or that the law has been violated.

In accordance with the provisions of the FTC's order, you are to cease using and to return all copies of any College relative val ue scale in your possession. The proper mailing address is:

The American College of Radiology 20 North Wacker Drive Chicago, Ilinois 60606 Attention:

Copies of the FTC' s complaint and order are enclosed. Sincerely, President APPENDIX B Commissioner Deputy Assistant Secretary for Medical Services Administration Health Resources and Programs Social and Rehabilitation Service Department of Defense Department of Health, Education, and Washington, DC 20301 Welfare 330C Street, S.

Washington, DC 20201 Commissioner of Social Security Directorate Department of Health, Education OCHAMPUS and Welfare Department of Defense 6401 Security Boulevard Washington, DC 20301 Baltimore, MD 21235 ._ .

.Mn.....L 144 Decision and Order National Association of OCIIAMPUS Bl ue Shield Plans Department of Defense 211 East Chicago Avenue Denver, CO 80240 Chicago, lL 60611 Health Application Systems Blue Cross of Southern California 1633 Bayshore Highway Box 27747 Burlingame, CA 94010 4777 Sunset Boulevard Los Angeles, CA 90027 Blue Cross and Blue Shie)d Bl ue Cross of Northern California of Alabama 1950 Franklin Street 930 S. 20th Street Oakland, CA 94659 Birmingham, AL 35298 Blue Cross of Arizona, Inc. Blue Shield ofCaJifornia 321 W. Indian School Road 2 North Point Box 13466 San Francisco, CA 94113 Phoenix, AZ 85002 Arizona Blue Shield Medical Colorado Hospital Service Service 244 University Boulevard 321 W. lndian School Road Denver, CO 80206 Box 13466 Phoenix, AZ 85002 Arkansas Blue Cross and Blue Colorado Medical Service, Inc. BS Shield, Inc. 244 University Boulevard 601 Gaines Street Denver, CO 80206 Box 2181 Little Rock, AR 72203 Connecticut Medical Service, Inc Connecticut Blue Cross, Inc. 221 Whitney Avenue Box 504 New Haven, cr 06509 370 Bassett Road North Haven, cr 06473 Blue Cross and Blue Shield of Hawaii Medical Service Association Delaware, Inc. 1504 Kapiolani Boulevard 201 W. 14th Street Box 860 Box 1991 Honolulu, HI 96808 as Wilmington, DE 19899 Group Hospitalization, Inc. BC Blue Cross ofIdaho, Inc. 550 12th Street, S. 1501 Federal Way Washington, DC 20024 Box 7408 Boise, ID 83707 Medical Service of the District of Colum- North Idaho District Medical Servce biaBS Bureau, Inc. BS .\50 12th Street, S. 1602 21st Avenue Washington, DC 20024 Box 11 06 Lewiston, ID 83501 Decision and Order 89 FTC. Bl ue Cross of Florida, Inc. lHinois Hospital and Health BC 532 Riverside Avenue Service Inc. Box 1798 227 N. Wyman Street Jacksonville, FL32201 Rockford, IL 61101 Blue Shield of Florida, Inc. Hospital Service Corporation BC 532 Riverside Avenue 233 North Michigan Avenue Box 1798 Box 1364 Jacksonvile, FL 32201 Chicago, IL 60601 Blue Cross of Georgia/ Atlanta Ilinois Medical Service - BS Inc. 233 North Michigan Avenue 1010 West Peachtree St., N. Chicago, IL 60601 Box 4445 Atlanta, GA aoa02 Blue Cross of Georgia/Columbus Blue Cross oflndiana Inc. 120 W. Market Street 2357 Warm Springs Road Indianapolis, IN 46204 Box 1520 Columbus. GA 31902 Blue Shield of Gcorgial Atlanta Mutual Medical Insurance Inc. BS Inc. 120 W. Market Street 1010 West Peachtree St., N. Indianapolis, IN 46204 Box 4445 Atlanta, GA 30302 Blue Shield of Georgia/Columbus Blue Cross ofIowa Inc. Liberty Building 2357 Warm Springs Road Sixth Street & Grand Avenue Box 1520 Des Moines, IA 50307 Columbus, GA 31902 Blue Shield of Iowa Blue Cross of Michigan Liberty Building 600 Lafayette E. Des Moines, IA 50307 Detroit, MI 48226 Kansas Hospital Service Blue Shield of Michigan Association, Inc. 600 Lafayette E. 1133 Topeka Avenue Detroit, MI 48226 Box 239 Topeka, KS 66601 Kansas Blue Shield Blue Cross and Blue Shield 1133 Topeka Avenue of Minnesota Box 239 3535 Blue Cross Road Topeka, KS 66601 Box 3560 St. Paul,MN 55165 Blue Cross Hospital Plan Inc. Blue Cross and Blue Shield 3101 Bardstown Road of Minnesota Louisville, KY 40205 2344 Nicollet Avenue Minneapolis, MN 55404 ....

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144 Decision and Order Kentucky Physicians' Mutual Blue Cross and Blue Shield of Mississippi, Inc. Inc. 3101 Bardstown Road 530 E. Woodrow Wilson Drive Louisvile, KY 40205 Box 1043 Jackson, MS 39205 Blue Cross of Louisiana Blue Cross of Kansas City 1022.5 Florida Boulevard 3637 Broadway Box 15699 Box 169 Baton Rouge, LA 70815 Kansas City, MO 64141 Hospital Service Association of Blue Cross Hospital Service, Inc. of Mis- New Orleans- BC souri 2026 St. Charles Avenue 1430 Olive Street New Orleans, LA 70130 St. Louis, MO 63103 Maine Blue Cross and Blue Shield Blue Shield of Kansas City 110 Free Street 3637 Broadway Portland, ME 04101 Box 169 Kansas City, M064141 Blue Cross of Maryland St. Louis Blue Shield 700 E. Joppa Road 5775 Campus Parkway Box 9836 Hazelwood, MO 63042 Towson, MD 21204 Blue Shield of Maryland, Inc. Blue Cross of Montana 700 E. Joppa Raod 3360 10th Avenue S. 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Kitsap Physicians' Service Associated Hospitals, Inc. 820 Pacific Avenue 401 Federal Street Box 339 Box 131 Bremerton, W A 98310 Bluefield, WV 24701 Blue Cross Hospital Service, Parkersburg Hospital Service, Inc. Inc. 203 Union Trust Building Commerce Square Box 1948 Box 1343 Parkersburg, WV 26101 Charleston, WV 23225 West Virginia Hospital Service Surgical Service, Inc. Inc. Commercial Bank BuHding 20th & Chapline Streets Box 131 Wheeling, WV 26003 Bluefield, WV 24701 Blue Shield of Southern West Medical-Surgical Service. Inc. Virginia, Inc. Union National Bank Building Commerce Square Clarksburg, WV 26301 Box 1353 Charleston, WV 23235 Morgantown Medical-Surgical Service Memphis Hospital Service and Surgical Inc. Association, Inc. 265 High Street 85 N. Danny Thomas Boulevard Morgantown, WV 26505 Box 98 Memphis, TN 38101 West Virginia Medical Service Group Hospital Service, Inc. Inc. Main at N. 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Ohio Medical Indemnity, Inc 344 S. Warren Street 6740 N. High Street Syracuse, NY 13202 Worthington, OIl 43085 Medical and Surgical Care, Inc. Blue Cross and HIue Shield of Oklahoma S Hopper Street 1215 S. Boulder Avenue Utica, NY 13501 Box 3283 Tulsa, OK 74102 Blue Cross and Blue Shield of Bl ue Cross of Oregon North Carolina 100 S.W. Market Street O. Box 2291 Box 1271 1830 Chapel Ifill-Durham Blvd. Portland, OR 97207 Durham, NC 27702 il ue Cross of North Dakota Oregon Physicians' Service 301 S. Eighth Street 619 S.W. 11th Avenue Fargo, ND 58102 Box 1071 Portland, OR 97207 Blue Shield of North Dakota Blue Cross of Lehigh Valley 301 S. Eighth Street 1221 Hamilton Street Fargo, ND 58102 Allentown, PA 18102 Blue Cross Hospital Plan, Inc. Capital Blue Cross 201 Ninth Street, N. 100 Pine Street Canton, OH 44702 Harrisburg, PA 17101 Blue Cross of Southwest Ohio Blue Cross of Greater 1351 Wiliam Howard Taft Rd. 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144 Decision and Order 1251 New StotJand Road 306 Spring Street Box 8650 Jamestown, NY 14701 Albany. NY 1 208 Blue Cross of Western New York, United Medical Service, Inc. Inc. 2 Park Avenue 298 Main Street NewYork NY10016 Buffalo, NY 14 Blue Cross of Washington- California Physicians' Service Alaska, Inc. P. O. Box 7608 15700 Dayton A venue, North San Francisco, CA 94120 Seattle, WA 9813:J The Indiana State Medical Colorado Medical Service, Inc. Association 244 University Blvd. 39.15 North Meridian Street Denver, CO 8020(j Indianapolis, IN 16208 Continental Service Life & Health Insur- Connecticut General Life Insurance ance Com pany Company Bux 3397 Hartford, CT 06115 5353 Florida Boulevard Baton Rouge, LA 70g21 Elue Cross & Blue Shield of Medical Association of Georgia Greater New York 8 Peachtree Street, N. 622 :3rd Avenue Atlanta, GA 30309 New York, NY 10016 Missouri Medical Service Mississippi State Medical 5'775 Campus Parkway Association Hazelwood, MO 6.1042 '3 Riverside Drive Jackson, MS39216 Bshington Physicians' Service Medical-Surgical Care, Inc. 220 West Harrison Street 203 Union Trust Building Seattle, WA 98119 Box 1948 Parkersburg, WV 26101 New York Life Insurance Company Metropolitan Life Insurance 51 Madison Avenue Company New York, NY 10010 1 Madison Avenue New York, NY 10010 Prudential Insurance Company The Travelers Insurance Company of America 1 Tower Square Prudential Plaza Hartford, CT 06115 Newark, NJ 07101 Continental Assurance Company Aetna Life Insurance Company CN A Plaza Hi1 Farmington Avenue Chicago, II. 60605 Hartford, CTOfjIJ5 Decision and Order 89 F.T. Bankers Life Company Employers Life Insurance 711 High Street Company ofWausau Des Moines, IA 50307 2000 Westwood Drive Wausau, WI 54401 Nationwide Life Insurance Company Colonial Penn Life Insurance Company 246 North High Street 5 Penn Center Plaza Columbus, on 43216 Philadelphia, PA 19103 Equitable Life Assurance Firemen s Fund Insurance Company Society of the U. 3333 California Street 1285 Avenue ufthe Americas San Francisco, CA 94118 New Yark, NY 10019 Reliance Insurance Group Zurich Life Insurance Company 4 Penn C.-nter Plaz 111 WestJackson Boulevard Philadelphia, PA 19103 Chicago, IL 60604 Occidental Life Insurance Company of Mutual of Omaha Insurance Company California Dodge at 33rd Street Box 2101 Terminal Annex Omaha, NE 68131 Los Angeles, CA 90054 Blue Shield of Ma.c;sachusetts Blue Cross of Eastern Ohio, Inc. Inc. 2400 Market Street 133 Federal Street Youngstown OH44507 Boston, MA 02106 Nevada State Medical Association 3660 Baker Lane Reno, NV 89502 157 Complaint