Senate passes bill allowing groups of doctors to negotiate

Posted: Thursday, April 20, 2000

JUNEAU (AP) -- Doctors could band together to negotiate fees and other issues with some health insurers under a bill passed Wednesday by the Senate.

Such group negotiation is currently illegal under state and federal antitrust laws designed to foster competition and prevent price-fixing.

Sen. Pete Kelly, who sponsored Senate Bill 256, contends the increasing size and power of health benefit plans has given them enough power in some areas to dictate the terms of the contracts they make with doctors.

''The health care plan providers are getting more and more market power,'' said Kelly, R-Fairbanks. ''This puts the family doctors at a disadvantage.''

Kelly said more is at stake than just the fees doctors charge, including what the health plans cover, and quality assurance programs.

The bill would allow negotiation on fees only with health benefit plans that controlled more than 15 percent of the market in any one area. It would circumvent federal antitrust law by having the state attorney general oversee the negotiating process to guard against anticompetitive practices.

However, the attorney general opposes the bill, along with an unusual coalition of consumer groups and insurance companies.

''Allowing physicians to organize and set higher fees is very bad medicine for consumers,'' said Senate Minority Leader Johnny Ellis, D-Anchorage.

Ellis cited a study by Charles River Associates that estimated that collective negotiation by doctors would drive up health insurance premiums for consumers by 5 to 13 percent.

Kelly responded that competing studies showed a much smaller impact.

The Department of Law contends the bill gives the attorney general too little time and information to review contracts, and doesn't provide for input from consumers.

''All of these factors suggest that no substantive review is contemplated by the legislation, nor would the Attorney General be in a position to exercise independent judgment and control in determining the reasonableness of negotiated terms of the contract,'' Assistant Attorney General Julia Coster wrote in the department's review of the bill.

The bill is similar to a proposal pending in Congress, which is opposed by the Federal Trade Commission.

Kelly's bill passed the Senate 13-7 and now moves to the House.

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