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  • Essay / Pricing - 305

    Pricing is defined as “an agreement in which two companies coordinate their pricing decisions.” (O’Sullivan and Sheffrin, 2003). The price-fixing case I chose involved Brown and Toland Medical Group. The company is a for-profit, multi-specialty independent physician association based in San Francisco (Rauber, 2004). Brown and Toland Medical Group were charged by the FTC with violating federal antitrust laws by fixing prices and other terms under which it contracts with insurance companies for members of a preferred provider organization (PPO). ). The FTC claims the company asked doctors to agree to prices and terms under which they would contract with health plans or third-party payers. The company also reportedly asked doctors to terminate any pre-existing contracts. Then they asked others to join in their price-fixing agreement. This would increase the prices of medical services in their hometown of San Francisco. The FTC proposed a consent agreement that prohibits Brown and Toland from: • Negotiating with any payer on behalf of a physician. • Dealing or refusing to deal with a payer based on price. or other conditions• Joint determination of price or other conditions under which any physician deals with payersAnother stipulation of the consent is that Brown & Toland must notify the FTC at least 60 days before entering into an agreement with physicians or contact a payer, except those provisions under which Brown & Toland will receive a lump sum and contain standard recordkeeping provisions to assist the FTC in monitoring defendant compliance(www.