Posted by: notdeaddinosaur | October 18, 2009

One of These Two Actions is Illegal

Which of the following two scenarios is illegal under Federal antitrust law:

  • Half a dozen family physicians (of about 50 on a given hospital staff) get together and decide to set all their fees for medical services to the Medicare allowed amount plus $10.
  • Two large insurance companies (together covering 80% of the market in a given municipal area) somehow between them manage to pay between 88% and 95% of the amounts allowed by Medicare.

That’s right. The feds would go after the docs. That’s because the insurance companies are specifically exempted from antitrust legislation known as the Sherman Act.

Perhaps a better question might be, “Which action is more anti-competitive and more detrimental to commerce and society as a whole?” Ah, but when has the law ever bothered itself with common sense?


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