Note by Carol Lynn Wallack
The Maricopa and Pima Foundations for Medical Care (FMCs) are nonprofit Arizona corporations, organized by the medical societies in Maricopa and Pima counties and composed of a large percentage of licensed physicians practicing in the counties. The FMCs provide a type of prepaid medical insurance plan. As agents for insurance companies and employers, one of the FMCs' primary functions was to obtain agreements, by majority vote, among the physicians participating in the plans upon the maximum level of reimbursement that the physicians would accept for medical services rendered to patients insured under the plans. Alleging that the physicians were engaged in horizontal maximum price fixing, the State of Arizona brought suit under the federal antitrust laws to enjoin the two county medical societies and their FMCs from employing the maximum fee schedules. After a limited amount of pretrial discovery, Arizona moved for partial summary judgment on the ground that defendants' horizontal maximum price fixing agreements constituted per se violations of the Sherman Act. The United States District Court for the District of Arizona denied the state's motion for summary judgment on the issue of liability, but certified for interlocutory appeal the question whether the maximum fee agreements were illegal per se. The Ninth Circuit affirmed denial of the motion and held that the legality of the challenged activity must be determined at trial under rule of reason analysis. The Supreme Court reversed and held that the maximum fee agreements among the physicians were unnecessary restraints on competition and, thus, per se violations of the antitrust laws. The Court also declared that the competitive problems of the health care industry provided no legal justification for exempting the physicians' price fixing conduct from the per se rule. Arizona v. Maricopa County Medical Society, 102 S. Ct. 2466 (1982).
About the Author
Carol Lynn Wallack.
Citation
57 Tul. L. Rev. 994 (1983)