The Illinois Attorney General has filed price fixing charges against the two largest physician groups in Champaign County, Illinois, charging them with boycotting Medicaid patients in order to raise prices. Carle Clinic Associates, P.C. has 300 physicians, 200 of which are in Champaign County, Illinois, representing a 60% market share. Christie Clinic, P.C. has 100 physicians, all which are in the Champaign County, representing a 30% market share.

The Attorney General alleges that the clinics agreed to boycott new Medicaid patients in order to increase effective Medicaid reimbursement rates and to accelerate reimbursement payments.

The case raises interesting legal and factual questions. From a factual standpoint, the Attorney General is alleging the existence of an agreement arising out of alleged continual contacts since early 2003 resulting in the clinics implementing similar policies regarding new Medicaid patients. It remains to be seen whether this is an agreement, conscious parallelism or coincidental independent action.

The Illinois Antitrust Act prohibits concerted action to fix, control or maintain prices and concerted action to fix, control or maintain the supply of a commodity or service. Since the prices, i.e., reimbursement rates, are established by the state government, the price fixing argument has weaknesses. On the other hand, if true, the physician groups are apparently limiting the supply of physician services to new Medicaid patients.

The case presents interesting legal issues:

1.         Can the government compel private businesses to provide services to government programs at unacceptable rates, since this is not a tax-exempt situation where the clinics have charitable mission obligations required to qualify for tax exempt status, nor is it a situation similar to Hill-Burton funds, where hospital’s are required to participate in federal programs in order to receive federal funding?

2.         Can the government compel private businesses to provide services to people in a certain economic status in the same manner they compel private businesses with whom meet certain jurisdictional requirements to comply with Americans With Disabilities Act?

Note that neither of these underlying issues is an issue in the case, which just alleges a group boycott on conspiracy that violates the statute.

The press release of the Illinois Attorney General and a copy of the Complaint are available at the link below: