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Minnesota Rural Health Cooperative; Analysis of the Agreement Containing Consent Order to Aid Public Comment

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Information about this document as published in the Federal Register.

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AGENCY:

Federal Trade Commission.

ACTION:

Proposed Consent Agreement.

SUMMARY:

The consent agreement in this matter settles alleged violations of federal law prohibiting unfair or deceptive acts or practices or unfair methods of competition. The attached Analysis to Aid Public Comment describes both the allegations in the draft complaint and the terms of the consent order — embodied in the consent agreement — that would settle these allegations.

DATES:

Comments must be received on or before July 19, 2010.

ADDRESSES:

Interested parties are invited to submit written comments electronically or in paper form. Comments should refer to“Minnesota Health, File No. 051 0199” to facilitate the organization of comments. Please note that your comment — including your name and your state — will be placed on the public record of this proceeding, including on the publicly accessible FTC website, at (http://www.ftc.gov/​os/​publiccomments.shtm).

Because comments will be made public, they should not include any sensitive personal information, such as an individual’s Social Security Number; date of birth; driver’s license number or other state identification number, or foreign country equivalent; passport number; financial account number; or credit or debit card number. Comments also should not include any sensitive health information, such as medical records or other individually identifiable health information. In addition, comments should not include any “[t]rade secret or any commercial or financial information which is obtained from any person and which is privileged or confidential. . . .,” as provided in Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and Commission Rule 4.10(a)(2), 16 CFR 4.10(a)(2). Comments containing material for which confidential treatment is requested must be filed in paper form, must be clearly labeled “Confidential,” and must comply with FTC Rule 4.9(c), 16 CFR 4.9(c).1

Because paper mail addressed to the FTC is subject to delay due to heightened security screening, please consider submitting your comments in electronic form. Comments filed in electronic form should be submitted by using the following weblink: (https://public.commentworks.com/​ftc/​mnhealth) and following the instructions on the web-based form. To ensure that the Commission considers an electronic comment, you must file it on the web-based form at the weblink: (https://public.commentworks.com/​ftc/​mnhealth). If this Notice appears at (http://www.regulations.gov/​search/​index.jsp), you may also file an electronic comment through that website. The Commission will consider all comments that regulations.gov forwards to it. You may also visit the FTC website at (http://www.ftc.gov/​) to read the Notice and the news release describing it.

A comment filed in paper form should include the “Minnesota Health, File No. 051 0199” reference both in the text and on the envelope, and should be mailed or delivered to the following address: Federal Trade Commission, Office of the Secretary, Room H-135 (Annex D), 600 Pennsylvania Avenue, NW, Washington, DC 20580. The FTC is requesting that any comment filed in paper form be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions.

The Federal Trade Commission Act (“FTC Act”) and other laws the Commission administers permit the collection of public comments to consider and use in this proceeding as appropriate. The Commission will consider all timely and responsive public comments that it receives, whether filed in paper or electronic form. Comments received will be available to the public on the FTC website, to the extent practicable, at (http://www.ftc.gov/​os/​publiccomments.shtm). As a matter of discretion, the Commission makes every effort to remove home contact information for individuals from the public comments it receives before Start Printed Page 37439placing those comments on the FTC website. More information, including routine uses permitted by the Privacy Act, may be found in the FTC’s privacy policy, at (http://www.ftc.gov/​ftc/​privacy.shtm).

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FOR FURTHER INFORMATION CONTACT:

Bradley Albert (202-326-3670), Bureau of Competition, 600 Pennsylvania Avenue, NW, Washington, D.C. 20580.

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SUPPLEMENTARY INFORMATION:

Pursuant to section 6(f) of the Federal Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and § 2.34 the Commission Rules of Practice, 16 CFR 2.34, notice is hereby given that the above-captioned consent agreement containing a consent order to cease and desist, having been filed with and accepted, subject to final approval, by the Commission, has been placed on the public record for a period of thirty (30) days. The following Analysis to Aid Public Comment describes the terms of the consent agreement, and the allegations in the complaint. An electronic copy of the full text of the consent agreement package can be obtained from the FTC Home Page (for June 18, 2010), on the World Wide Web, at (http://www.ftc.gov/​os/​actions.shtm). A paper copy can be obtained from the FTC Public Reference Room, Room 130-H, 600 Pennsylvania Avenue, NW, Washington, D.C. 20580, either in person or by calling (202) 326-2222.

Public comments are invited, and may be filed with the Commission in either paper or electronic form. All comments should be filed as prescribed in the ADDRESSES section above, and must be received on or before the date specified in the DATES section.

Analysis of Agreement Containing Consent Order To Aid Public Comment

The Federal Trade Commission has accepted, subject to final approval, an agreement containing a proposed consent order with the Minnesota Rural Health Cooperative (MRHC). The proposed consent order has been placed on the public record for 30 days to receive comments from interested persons. Comments received during this period will become part of the public record. After 30 days, the Commission will review the agreement and the comments received and decide whether to withdraw from the agreement or make the proposed order final.

The purpose of this analysis is to facilitate public comment on the proposed order. The analysis is not intended to constitute an official interpretation of the agreement and proposed order or to modify their terms in any way. Further, the proposed order has been entered into for the settlement purposes only and does not constitute an admission by MRHC that it violated the law or that the facts alleged in the complaint (other than jurisdictional facts) are true.

I. The Complaint

The MRHC is a for-profit corporation of physicians and hospitals located in southwestern Minnesota. In addition, between early 2005 and late 2007, the MRHC also had pharmacy members. The complaint charges that the MRHC has violated Section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45, by, among other things, orchestrating and implementing agreements among competing MRHC members to fix the price at which they contract with health plans and to refuse to deal except on collectively-determined price terms. The allegations of the complaint are summarized below.

A. Price fixing for hospital and physician services

The MRHC has approximately 25 hospital members, which constitute the vast majority of hospitals in the area of southwestern Minnesota in which the MRHC operates. The organization has approximately 70 physician members practicing in 41 clinics, who represent roughly half of the primary care physicians in southwestern Minnesota. The MRHC is controlled by a Board of Directors composed of physicians and hospitals elected by the members.

When providers join MRHC, they agree that MRHC will negotiate and contract with health plans on their behalf and agree to participate in all MRHC contracts. The Board oversees contract negotiations undertaken by a contracting committee of physician and hospital representatives and approves all contracts between MRHC and health plans.

The MRHC has negotiated prices and other competitively significant terms, on behalf of MRHC physician and hospital members, with numerous payers in Minnesota, including Blue Cross Blue Shield of Minnesota, HealthPartners, Medica Health Plans, MultiPlan, Inc., Preferred One, and America’s PPO. After its Board of Directors approved, the MRHC entered into and administered each contract.

The MRHC has threatened to terminate these group contracts with payers to pressure them to increase prices for physician and hospital services. For example, during 2003 contract renewal negotiations with HealthPartners, the MRHC notified HealthPartners that it would terminate the contract unless HealthPartners agreed to higher reimbursement rates. HealthPartners acceded to the MRHC’s demands, eventually agreeing to pay MRHC physician members 27 percent more than comparable non-MRHC physicians and to pay MRHC hospital members ten percent more than comparable non-MRHC hospitals. A similar tactic forced Preferred One to pay MRHC members higher rates than it paid comparable non-MRHC providers.

The MRHC informed payers that the MRHC “expect[s] our group to be accepted or rejected as a group.” It told payers that resisted the MRHC’s price demands that they would be unable to negotiate individually with MRHC members. When these payers attempted to contract directly with individual MRHC hospitals or physicians, the members referred the payers back to MRHC.

Through its collective negotiations and coercive tactics, the MRHC succeeded in obtaining higher payments to MRHC members by obtaining higher reimbursement rates than comparable providers, more favorable payment methods, and increased reimbursements for new MRHC members.

(1) Higher Rates: Five payers — HealthPartners, Medica, MultiPlan, Preferred One, and America’s PPO — paid MRHC members more than they paid comparable rural hospitals and physicians elsewhere in Minnesota. Indeed, the MRHC told its members at the 2005 annual member meeting that improvements in its contract with Preferred One would be “worth $100,000s annually for MRHC members.”

(2) Favorable Payment Methods: Two payers — Medica and Preferred One — pay MRHC hospital and physician members based on a percentage of billed charges, rather than a fixed fee for each service. This mechanism allows MRHC members to increase unilaterally their reimbursement, by increasing their billed charges up to the maximum specified in the contract.

(3) Increased New Member Reimbursements: The MRHC has forced payers to reimburse new MRHC members at the higher MRHC rates, even though these new members had existing contracts with the payer at lower rates. For example, Medica told the MRHC that “because of the Co-op relationship all of the clinics and hospitals, except Rice, are being paid higher reimbursement then they were prior to our Medica agreement with the Co-op.”

B. Price fixing for pharmacy services

In 2004, after being approached by pharmacies, MRHC expanded its Start Printed Page 37440membership to include pharmacies and began recruiting pharmacists for the purpose of collectively negotiating agreements with pharmacy benefit managers (PBMs). The MRHC encouraged pharmacies to join to increase the reimbursement levels they would receive under the new Medicare Part D prescription drug program. Between early 2005 and late 2007, the MRHC had approximately 70 pharmacist members.

The MRHC urged pharmacies not to deal individually with PBMs and instead to act together through MRHC. The MRHC repeatedly reminded pharmacies of the benefits of acting collectively, advising them to “stand together and speak with ONE voice to the PBMs.” For example, in letters to members and prospective members, MRHC stated:

  • “We have to stand together in this effort or once again the PBMs will intimidate us and pick us off one by one with contracts we don’t want.”
  • “Do NOT sign and return your Medicare Part D PBM contracts. MRHC will review and negotiate these for you during the next few weeks. The contracting deadline is not until later this summer and our best leverage is to take our time to negotiate as a block. The bigger block the better [sic].”
  • “We are asking all MRHC members NOT to sign and return their Medicare Part D PBM contracts. MRHC will review and negotiate these for them during the next couple of weeks. Our best leverage is to take our time to negotiate as a block, and the bigger block the better [sic]. . . . Don’t sign contracts but notify the PBMs who will act as your agent - the MRHC!”

To “speed up” the PBMs’ acceptance of the MRHC as the pharmacies’ bargaining agent, the MRHC provided each pharmacy member with pre-printed labels stating that MRHC would act as the pharmacy’s contracting agent. Many member pharmacies followed the MRHC’s instructions to return contract offers from PBMs with these labels attached.

The MRHC negotiated with at least eight PBMs over Medicare Part D reimbursement levels and reached agreements on behalf of the MRHC establishing prices and other competitively significant terms with six of them. The MRHC terminated the pharmacist memberships in November 2007 and transferred management of these agreements to a pharmacy services administration organization in early 2008.

C. Lack of justification

Price agreements among competing sellers, as a general rule, are price fixing and are summarily condemned by the antitrust laws as per se illegal. But joint price setting by provider networks is not per se illegal if: (1) the participants have integrated their activities through the network (whether financially, clinically, or otherwise) in a way that is likely to produce significant efficiencies that benefit consumers; and (2) the price agreements are reasonably necessary to realize those efficiencies. The MRHC’s price fixing for hospital, physician, and pharmacy services, however, was unrelated to any efficiency-enhancing integration of its members’ clinical services.

1. Hospital and physician services

One form of efficiency-enhancing integration among otherwise competing health care providers involves arrangements in which the participants share with one another substantial financial risk for the services provided through the network. Such risk sharing occurs when mechanisms are in place that make the network providers as a group accountable for the total cost of defined services delivered to a group of covered individuals, so that the providers have incentives to cooperate in controlling costs and improving quality by managing the provision of services. The Statements of Antitrust Enforcement Policy in Health Care issued by the FTC and the Department of Justice provide several examples of types of arrangements through which participants can potentially share substantial financial risk.

MRHC’s hospital and physician members have not shared, and do not share, substantial financial risk in the provision of patient care. MRHC considers only three of its contracts with payers to be “risk” contracts, and these contracts pertain only to physician services. Moreover, these contracts do not provide significant financial incentives for members to collaborate to improve the performance of the group as a whole.2 For example, under two of the three “risk” contracts, the payers withheld a relatively modest portion of the payments owed to participating physicians (typically no more than 10 percent), and return of these sums did not depend on the group meeting cost containment or quality improvement performance targets. Instead, physicians merely had to participate in a quality improvement project in which they reported their compliance with clinical practice guidelines for treatment of a few specific conditions. These arrangements, while perhaps benefitting some physicians’ individual delivery of health care, would thus be unlikely to create incentives to motivate MRHC physicians to work together to improve significantly group-wide care to patients. Health Care Statements at 68.

Arrangements among competing health care providers that do not involve the sharing of financial risk may also involve integration that has the potential to create significant efficiencies in the provision of health care services. The Health Care Statements discuss an example of such integration: a “clinically integrated” program, which involves “an active and ongoing program to evaluate and modify practice patterns by the network’s physician participants and create a high degree of interdependence and cooperation among the physicians to control costs and ensure quality.” Health Care Statements at 72-73.

The MRHC has not undertaken any integration regarding its members’ provision of services, clinical or otherwise, that might justify its members’ jointly negotiated fees with health plans. It verifies the qualifications of its members, conducts patient satisfaction surveys, collects patient complaints, and organizes meetings to discuss quality of care issues. In addition, it has a few programs that relate solely to physicians: quality improvement projects involving diabetes and preventative services and inspections of physician clinics. Although these activities may be beneficial, they do not involve any integration among MRHC members that could significantly improve the quality and efficiency of the services MRHC members provide.

First, the scope of these activities is very limited. The clinical programs most likely to improve the quality of patient care do not involve the hospital members at all, and the activities involving physicians are limited to just a few of the many medical conditions the physicians treat. Moreover, even in these limited areas, the programs do not create any collaborative activity or interdependence among the physician members. Although the activities may lead individual physicians to modify their behavior, none of the programs creates enforceable obligations for physicians to improve their clinical Start Printed Page 37441operations or provides members with a shared stake in the performance of the group as a whole. Indeed, all of these activities are essentially informational and each physician clinic could engage in them on its own without any involvement from the other clinics. Finally, the challenged conduct — jointly negotiating with payors and agreeing on prices and other competitively sensitive terms — is unnecessary for members to engage in any of these activities.

2. Pharmacy services

Similarly, the MRHC’s joint price setting for pharmacy services was not related to any integration among its members. The MRHC recruited pharmacies for the purpose of increasing the pharmacies’ bargaining leverage in negotiations with PBMs. Aside from inviting pharmacists to attend continuing education programs that it was already providing for its non-pharmacist members, the MRHC’s sole activity relating to its pharmacy members was negotiating and administering contracts.

In sum, MRHC’s horizontal price fixing does not plausibly promote any efficiency-enhancing integration of its members services and so violates Section 5 of the FTC Act.

D. Lack of protection from the state action doctrine

The MRHC’s anticompetitive conduct is not shielded by the state action doctrine because there was no active supervision of MRHC’s conduct and Minnesota does not appear to have articulated a policy to immunize concerted refusals to deal or other forms of coercive conduct.

Since 1999,3 Minnesota law has authorized health care provider cooperatives to contract with purchasers on a fee-for-service basis and specified that, with certain limitations, such contracts “are not contracts that unreasonably restrain trade.”4 Although state economic regulation can immunize private parties from federal antitrust liability, states may not simply authorize private parties to violate the antitrust laws.5 Instead, a state must substitute its own control for that of the market. Thus, as the Supreme Court explained in California Retail Liquor Dealers Assen v. Midcal Aluminum, Inc., private parties claiming the protection of the state action doctrine must demonstrate that their challenged conduct was both (1) undertaken pursuant to a clearly articulated state policy to displace competition with regulation and (2) actively supervised by state officials.6

First, it is undisputed that state officials did not supervise the MRHC’s anticompetitive conduct. Active state supervision requires that state officials “exercise ultimate control over the challenged anticompetitive conduct.”7 A private party must therefore demonstrate that state officials have “exercised sufficient independent judgment and control so that the details of the rates or prices have been established as a product of deliberate state intervention, not simply by agreement among private parties.”8 But, until recently, Minnesota law did not provide for state review and approval of health care provider cooperative contracting.9 No review or approval of MRHC’s anticompetitive conduct, or the prices that resulted from that conduct, took place during the relevant time period.

In 2009, Minnesota enacted a law establishing a process by which the state Department of Health is to review and approve or disapprove health care provider contracts with third-party payers.10 The prospect of state review of MRHC’s contracts in the future does not provide antitrust immunity for MRHC’s prior unsupervised conduct, and the absence of state supervision by itself establishes that the conduct challenged in the complaint is not protected by the state action doctrine.11

Second, the Minnesota statute does not appear to articulate a policy to protect MRHC’s activities insofar as they involved concerted refusals to deal or other forms of coercive conduct. The statutory provision declaring that health care provider cooperative contracts are not unreasonable restraints of trade is expressly limited, for it is made “[s]ubject to Section 62R.08,” a provision entitled “Prohibited Practices” that bars certain types of conduct by provider cooperatives.12 That provision, among other things, states:

 It shall be unlawful for any health care provider cooperative to engage in any acts of coercion, intimidation, or boycott of, or any concerted refusal to deal with, any health plan company seeking to contract with the cooperative on a competitive, reasonable, and nonexclusive basis.13

Thus, to successfully assert a state action defense, MRHC would have to demonstrate not only active state supervision, but also that the Minnesota Legislature expressed a policy to supplant competition with regulation with respect to all of MRHC’s challenged conduct, including acts of “coercion.” Given the express limitations placed on the state policy regarding health care provider contracting, the Minnesota legislature does not appear to have expressed such a broad policy.

II. The Proposed Order

The proposed order takes into account the change in Minnesota law that occurred during the pendency of the investigation.

A. Impact of the new statute

As noted above, the Minnesota Legislature in 2009 enacted legislation designed to provide state supervision of the contracts that health care provider cooperatives enter into with health plans. The Commission cannot, at this time, determine whether this new law will result in that state engaging in the detailed, substantive review that the Supreme Court has held is required for “active supervision.” Determining whether the active supervision prong of the state action doctrine has been met will require a factual inquiry into the Departments of Health’s actual Start Printed Page 37442implementation of its new authority in specific instances. Although there is no single prescribed method for a state to conduct an adequate review of private anticompetitive conduct, such as the price fixing by the MRHC, such review must include an assessment of the substantive merits of the pricing conduct, based on a factual record that enables the state to exercise “sufficient independent judgment and control so that the details of the rates or prices have been established as a product of deliberate state intervention.”14

Although it is too early to assess the state’s implementation of the new statute, the Commission believes the circumstances here make it appropriate to defer to Minnesota’s expressed intention to actively supervise the contracts that result from the MRHC’s price fixing.15 The Commission has in the past taken a different remedial approach where state officials had authority to actively supervise private conduct but failed to exercise it.16 Here Minnesota officials have only been recently granted that authority, and it is appropriate to allow them an opportunity to utilize that authority.

As a result, the proposed order does not bar collective price negotiations. At the same time, there is certain anticompetitive activity that the state will not supervise and would not be protected under the state action doctrine and the order prohibits such activity. The key prohibitions in the proposed order are aimed at preventing MRHC from using concerted refusals to deal or other coercive tactics to extract favorable contract terms from payers. This relief is appropriate because the new statute only authorizes the Department of Health to supervise the final contracts, not the negotiating process itself, which is where coercive tactics would occur. Further, the new statute does not authorize the Department of Health to reject a contract on the ground that it is the product of coercion. Thus the order is drafted to protect consumers from coercion by the MRHC. In addition, the proposed order provides a remedy for past conduct by requiring renegotiation of all existing contracts and their submission for state approval consistent with the recently enacted Minnesota statute.

B. Order provisions

Paragraph II.A bars MRHC from organizing or implementing agreements to refuse to deal, or to threaten to refuse to deal, with a payer over contract terms, as well as agreements not to deal individually with payers, or to deal only through the MRHC. Paragraph II.B prohibits the MRHC from submitting for state approval any payer contract that it negotiated using acts of coercion, intimidation, or boycott, or any concerted refusal to deal. The prohibitions apply to agreements for hospital, physician, or pharmacy services.

The remaining portions of Paragraph II prohibit conduct that would facilitate a violation of Paragraph II.A. Paragraph II.C bars information exchanges to further conduct that violates the core prohibitions of Paragraph II. Paragraphs II.D and II.E ban attempts and encouragement of such violations.

The order also includes a proviso designed to clarify the scope of the prohibitions in Paragraph II. First, it provides that the provisions of Paragraph II do not prohibit the MRHC, in exercising its business judgment, from rejecting a contract on behalf of its members, so long as there is no agreement between the MRHC and any of its members that the member will refuse to deal individually (or will deal only though the MRHC), with a payer whose contract the MRHC rejects. Second, the order does not prevent the MRHC from exchanging information when necessary to conduct joint payer contract negotiations on behalf of its members. Such information would not, however, ordinarily include whether an individual member is participating in a particular contract or the terms on which it is negotiating with a payer independently of the MRHC.

As this proviso reflects, nothing in the order prohibits the MRHC, in the exercise of its business judgment, from rejecting a contract on behalf of its members, so long as there is no agreement between the MRHC and any of its members that the members refuse to deal individually with the payor whose contract the MRHC rejected, or that the members will only deal with that payor through the MRHC. Additionally, the order does not address any actions taken by any individual MRHC member, acting alone in exercising its business judgment. Thus, for example, the order does not bar any member from unilaterally declining to contract with any payer.

Paragraph III.A requires MRHC to send a copy of the complaint and consent order to its members, its management and staff, and any payers who communicated with MRHC, or with whom MRHC communicated, with regard to any interest in contracting for physician services, at any time since January 1, 2001.

Paragraph III.B requires MRHC to terminate, without penalty, pre-existing payer contracts that it had entered into since 2001, at the earlier of (1) receipt by MRHC of a written request for termination by the payer; or (2) the termination date, renewal date, or anniversary date of the contract. This provision is intended to eliminate the effects of MRHC’s past alleged illegal collective behavior. The payer can delay the termination for up to one year by making a written request to MRHC.

Paragraph III.D contains notification provisions relating to future contact with members, payers, management and staff. For three years after the date on which the consent order becomes final, MRHC is required to distribute a copy of the complaint and consent order to each member who begins participating in MRHC; each payer who contacts MRHC regarding the provision of member services; and each person who becomes an officer, director, manager, or employee. In addition, Paragraph III.D requires MRHC to publish a copy of the complaint and consent order, annually for three years, in any official publication that it sends to its participating members.

Paragraphs IV, V, and VI impose various obligations on MRHC to report or provide access to information to the Commission to facilitate the monitoring of compliance with the order.

Finally, Paragraph VII provides that the proposed order will expire in 20 years.

By direction of the Commission.

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Donald S. Clark

Secretary.

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Footnotes

1.  The comment must be accompanied by an explicit request for confidential treatment, including the factual and legal basis for the request, and must identify the specific portions of the comment to be withheld from the public record. The request will be granted or denied by the Commission’s General Counsel, consistent with applicable law and the public interest. See FTC Rule 4.9(c), 16 CFR 4.9(c).

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2.  Even if MRHC were financially integrated for some contracts, that fact alone would not justify their jointly negotiating on behalf of their physicians for contracts where there was no financial integration. See, e.g., North Texas Specialty Physicians v. FTC, 528 F.3d 346, 368-70 (5th Cir. 2008) (existence of risk contract did not justify physician group’s joint price setting for non-risk contracts).

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3.  Minnesota’s original 1994 statute authorized contracting only “on a substantially capitated or similar risk-sharing basis.” Minn. Laws 1994, c.625, art. 11, § 6, available at (https://www.revisor.mn.gov/​laws/​?doctype=​Chapter&​year=​1994&​type=​0&​id=​625). A 1999 amendment permitted fee-for-service or other financial arrangements. Minn. Laws 1999, c. 245, art. 2, § 14, available at (https://www.revisor.mn.gov/​laws/​?doctype=​Chapter&​year=​1997&​type=​0&​id=​245).

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4.  Minn. Stat. § 62R.06, subd. 3 (2009) (“Subject to section 62R.08, a health care provider cooperative is not a combination in restraint of trade, and any contracts or agreements between a health care provider cooperative and its members regarding the price the cooperative will charge to purchasers of its services, or regarding the prices the members will charge to the cooperative, or regarding the allocation of gains or losses among the members, or regarding the delivery, quality, allocation, or location of services to be provided, are not contracts that unreasonably restrain trade.”).

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5.  Federal Trade Commission v. Ticor Title Ins. Co., 504 U.S. 621, 633 (1992) (“a State may not confer antitrust immunity on private persons by fiat”); Parker v. Brown, 341 U.S. 351 (1943) (“a state does not give immunity to those who violate the Sherman Act by authorizing them to violate it, or declaring that their action is lawful”).

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6.  445 U.S. 97, 105 (1980).

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7.  Patrick v. Burget, 486 U.S. 94, 100 (1988).

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8.  Ticor, 504 U.S. at 634-35.

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9.  From its inception, the Health Care Cooperative Act has required provider network cooperatives to file contracts with the state health department (see Minn. Stat.§ 62R.06),but until the 2009 amendments, the law did not require state officials to review and approve the contracts.

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10.  Minn. Laws 2009, c. 97 § 2 (codified at Minn. Stat. § 62R.09), available at (https://www.revisor.mn.gov/​laws/​?doctype=​Chapter&​year=​2009&​type=​0&​id=​97).

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11.  But, as discussed below, the Commission has considered this legislative change in framing prospective relief in this case.

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12.  See note 2, supra.

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13.  Minn. Stat. § 62R.08(d).

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14.  Ticor, 504 U.S. at 634-35; see also Kentucky Household Good Carriers Assn, 139 F.T.C. 404, 426 (2005), aff’d per curiam, 2006 U.S. App. LEXIS 21864 (2006) (unpublished) (noting the importance of procedural mechanisms to ensure that “relevant facts — especially those that might contradict the proponent’s contentions — are brought to the state decision-maker’s attention”).

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15.  Engrossed version of SF 203, Section 2, Subdivision 1, (b)(1), available at (https://www.revisor.mn.gov/​laws/​?id=​97&​doctype=​chapter&​year=​2009&​type=​0).

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16.  See Kentucky Household Good Carriers Assn, at 26 (order prohibiting collective rate-making to remain in effect until the respondent demonstrates to the Commission that the state has implemented a program of active supervision).

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[FR Doc. 2010-15745 Filed 6-28-10: 7:22 am]

BILLING CODE 6750-01-S