BUSINESS INTEGRITY PROGRAM
Policy Manual
APPROVED: May 14, 1998
by BOARD OF DIRECTORS
WASHINGTON COUNTY HEALTH SYSTEM
formerly titled “Legal Compliance Program”
Revised 12/2000
8. Market Competition
Washington County Health System is committed to compliance with all state and federal
antitrust laws. The antitrust laws apply to all business provided by hospitals and
physicians. These laws help preserve the country’s economy and political and social
institution. The Health System is fully committed to the philosophy behind the antitrust
laws.
Antitrust laws prohibit agreements to fix prices, divide markets, and boycott competitors.
They also prevent conduct that unreasonably restraint competition. Depending on the
circumstances, this can include attempts to tie services together, agreements that harm a
competitor, or unlawfully raising prices. Health System prices may be determined by
HSCRC regulations (for hospital services) and fee schedules based on location. Any
questions about antitrust should be directed to the Director of Business Integrity.
(a) Discussion With Competitors
The policy of Washington County Health System is that the rates it charges for care and
related supplies and services are determined solely by the System. Terms of third party
insurance contracts are also solely within the Health System’s discretion. (HSCRC
regulations also are a prime consideration for pricing hospital services.) Many factors are
used to determine pricing, such as costs, market conditions, commonly used fee
schedules, and market pricing.
The Health System cannot have any verbal or written agreement with any competitor
concerning prices, pricing policy or formulas, bids or bid formulas. The System also
cannot make agreements concerning discounts, credit arrangements, or any related terms
of providing services. Health System policy prohibits any discussions with competitors
relating to prices or terms of providing services. Any joint ventures or affiliations that
may require discussions about price are reviewed individually for antitrust business
integrity.
The Health System is often asked to share information about employee pay and benefits.
Our policy forbids sharing current or future information with competing hospitals. The
System may participate in and receive copies of general surveys, but those surveys must
conform to the guidelines for survey participation below under Trade Associations. Any
requests for pay and benefit information must be referred to the Human Resource
Department.
Health System policy also forbids discussions with competitors about its services,
markets, territories, bids or customers. Competitors may not agree to divide markets.
This includes dividing territories, product lines or customers.
(b) Trade Associations
Washington County Health System is involved in a number of trade and professional
associations. These memberships promote quality patient care by allowing System
members to learn new skills, develop policies, and add our voice to public issues when
appropriate. These memberships do not mean that it is always right to share business
information with these associations and their members. Sharing information is only
acceptable if it provides better information for consumers or promoted efficiency and
competition.
Surveys of prices, costs and wage information as acceptable if conducted by a third party.
Only combined data may be shared, and must be at least 3 months old. If any employee
is asked to provide an association with information about charges, costs or pay and
benefits, he or she should consult the Director of Business Integrity. Joint purchasing
through a trade association may be acceptable, but should first be reviewed by the
Director of Business Integrity. Any employee with questions about the activities of a
trade of professional association may ask the Director of Business Integrity or legal
counsel.
(c) Boycotts
Washington County Health System’s policies prohibit agreements with competitors to
boycott any particular person or organization. Any understanding reaching with a
competitor on such issues is prohibited; it does not need to be in writing. Health System
agents or employee must conduct all negotiations in good faith. A Health System officer
or the Director of Business Integrity must first approve exclusive arrangements with any
organizations based on thorough analysis of the situation.
(d) Physician Services
Credentialing and peer review activities relating to professional staff may also have
antitrust implications. Because physicians possess special training and experience, their
skills are best reviewed by other physicians. It is appropriate for physicians to review the
work of their peers. Often the physician performing the review is a competitor of the
other physician, so special care is required so that free and open competition is
maintained. Credentialing, peer review, and physician discipline are only conducted
through carefully selected committees. Any physician who participates in these functions
must use objective medical judgement.
Any Health System employees who are involved in negotiating employment or service
contracts with other health care providers should carefully review any non-competition
sections of the agreement. The geographic area and length of a non-competition clause
may vary from case to case. Any questions about non-compete agreements should be
directed to the Director of Business Integrity to review with legal counsel.
(e) Penalties
Violating the antitrust laws can be very damaging. Individuals can be fined $350,000 and
corporations can be fined $1,000,000 for each violation. Individuals can receive up to a
three-year prison term for each offense. Sometimes mail fraud or wire fraud charges go
along with antitrust charges, so even larger fines and longer prison terms can be the final
result.
Antitrust violations also can result in private lawsuits. Individuals and companies may
sue to stop antitrust violations and to recover damages resulting from the violations.
These lawsuits can results in judgements awarded equal to three times the damages
suffered, plus attorney’s fees. If there was a conspiracy to commit the antitrust
violations, each member of the conspiracy can be individually liable for the entire
amount.
(h) Unfair or Deceptive Practices
Washington County Health System is committed to compliance with all federal and state
laws concerning market competition. The Federal Trade Commission Act prohibits the
use of “unfair or deceptive acts and practices”. This includes labeling, advertising and
marketing materials that are untrue or misleading. Health System employees responsible
for preparing such materials must be familiar with these laws. If there are questions
about specific items, the Director of Business Integrity should be consulted before
distribution.
If this law is violated, the courts usually issue a “cease and desist” order, and may charge
penalties. State laws may apply as well.