American Academy of Orthopaedic Surgeons

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IN THE MATTER OF THE AMERICAN ACADEMY OF ORTHOPAEDIC SURGEONS MODIFYING ORDER IN REGARD TO ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT March, 1985 Docket C-2856. Consent Order, Dec. 1976-Modifying Order, In response to a petition filed by the American Academy of Orthopaedic Surgeons ("AAOS"), this Order reopens the matter of Docket C-2856, and modifies the consent order entered against AAOS, 88 F. C. 968, by deleting Paragraph IJ(ll of the Order which bars the organization from advising in favor of or against any relative value scale developed by third parties, and inserting a provision identical to one contained in the FTC' s order in Michigan State Medical Society (Michigan State), Docket No. 9129, 101 F. C. 191. that permits AAOS more freedom to discuss reimbursement issues with third-party payers and governmental entities. The Commission noted that it had recently modified a similar order entered against the American College of Obstetricians and Gynecologists ("ACOG"), Docket No. C-2855 , l104 C. 524 (1984)J after finding that the benefits derived from its restriction on ACOG's ability to discuss relative value scales with third-party payers and governmental entities were outweighed by the resulting injury to ACOG and the public, and that finding was applicable to AAOS. Accordingly, the Commission has modified the AAOS ordcr in the same manner as it modified the ACOG order, and that modification is also consistent with the Commission s decision in Michigan State.

ORDER REOPENING AND MODIFYING FINAL ORDER By petition fied November 19, 1984, the American Academy of Orthopaedic Surgeons ("AAOS") asked the Commission to reopen and modify the Commission order in Docket No. C-2856 entered by con- C. 968).sent against AAOS on December 14, 1976 ("Order ) (88 F. AAOS requested that the Commission modify the Order by a) deleting Paragraph lI(B) of the Order, which prohibits AAOS from advising in favor of or against any relative value scale developed by third parties (except that AAOS is permitted to provide historical data), and b) inserting a provision identical to a provision contained in the Commission s Order in Michigan State Medical Society, Docket No. 9129, 101 C. 191 (1983) Michigan State that would allow AAOS more freedom to discuss issues relating to reimbursement with third-party payers and governmental entities. AAOS's petition was placed on the public record and no comments were received. Upon consideration ofAAOS's petition and other relevant information, the Commission finds that the public interest would be served by deleting Paragraph lib) ofthe Order and by inserting the relevant T",","U C1(m r.contained in the order in Michigan State. The Commission AMERICAN ACADEMY OF ORTHOPAEDIC SURGEONS 249 248 Modifying Order order against the American College of Obstetricians and Gynecologists ("ACOG" ) in Docket No. C-2855 is similar to the AAOS order and the Commission recently reopened and modified the ACOGorder finding that its restriction on ACOG's ability to discuss relative value scales with third-party payers and governmental entities had caused injury to ACOG and the public that outweighed any .benefit that might be derived from the restriction. (104 F. C. 524 (1984)) AAOS' petition is based on ACOG's petition and the Commission has determined that its finding in ACOG is applicable to AAOS. Accordingly, the Commission has modified the AA OS order in the same manner as it modified the A COG order. The modification is also consistent with the Commission s decision in Michigan State. The Order continues to prohibit AAOS from developing and circulating its own relative value guide for use by its members. In addition, although the Order no longer will prohibit AAOS from discussing relative value scales with governmental entities and thirdparty payers, serious antitrust concerns would arise were AAOS to negotiate or attempt to negotiate an agreement with any such party or engage in any type of coercive activity to efiect such an agreement. Accordingly, It is ordered That this matter be, and it hereby is, reopened and that the Order in Docket No. C-2856 be modified 1) to delete Paragraph IIE) and to redesignate Paragraphs IIC) and IID) ofthe Order Paragraphs IIE) and IIC) respectively; 2) to renumber Paragraphs , IV and V of the Order Paragraphs IV, V and VI respectively; and 3) to insert the following:

III.

It is further ordered That this order shall not be construed to prevent AAOS from:

A. Exercising rights permitted under the First Amendment to the United States Constitution to petition any federal or state government, executive agency, or legislative body concerning legislation rules or procedures, or to participate in any federal or state administrative or judicial proceeding.

B. Providing information or views, on its own behalf or on behalf of its members, to third-party payers concerning any issue, including reimbursement.

( ....,, ...... ;.. 250 FEDERAL TRADE C()MMISSION DECISIONS Complaint 105 F.