Erica L. Montgomery
Module 4 Case Managed Care
MHM/522 Legal Aspects of Health Administration
Dr. Paulchris Okpala
June 1, 2015
Actions that are illegal are those that have been prohibited under law. In most cases these actions do not need any proof on the surrounding circumstance. This means committing the act makes one liable for the offense. According to American Bar Association (2007), an act is per se illegal if it is supported by three things namely, statute, the constitution and case law.
The arrangement made by the owner PHOs, member hospitals and member physicians cancelling contracts with payers and asking them to pay and enter into a contract only through PHO is illegal under the Federal Trade Commission (FTC) act. This is because this act harmed the people living in this community which comprises of a very large population covering many towns. Additionally, these hospitals took advantage of the people who needed their services by increase hospital and physician prices and providing restrictions to the patients (Ward, 2014).Therefore this act is considered per se illegal because this violates antitrust principle according FTC act.
Additionally the pricing is unjustified therefore making it clear that the business is illegal. Firstly the organization is for-profit limited liability and it was built by the virtue of the law governing the state of Georgia. Unreasonable pricing is an illegal act against the law and this is not supported by FTC. Moreover, price fixing agreement has increased the cost of health care in this state. There are no shared financial risks hence their practices are not integrated with those other competing hospitals.
All in all PHO acts is per se illegal according to the FTC act because of the following three reasons; the first is the orchestrated collective agreement on fees and other terms concerning health matters, secondly carrying out collective negotiations with only some hospitals and lastly their act of refusal to deal and threats to stop dealing with payers who refused to fulfill all their terms and conditions. Considering all these three factors then it is all per se illegal.
There are actions that can be taken in order to restructure this arrangement in order to avoid a determination that the act is per se illegal. The respondents will have to sign a consent order. With this order the respondent are forbidden from entering any agreement with other hospitals or physicians (Broder, 2012). Before any arrangement is made then there must be a notification indicating their interest in changing the agreement.
Another way is by initiating negations by payers on behalf of the physicians. This move will ensure that the payer’s side is put into consideration and at the same time the physician’s interests will be put into account. Here the best agreement will be reached and no party will be disadvantaged.
Thirdly, the organizations should decide whether to deal or not deal with giving any threats to the payers. These will make the parties not to feel betrayed or sidelined if the organizations stop to deal with them. Furthermore, when the threats are not made it will also avoid intimidation of the payers. When the decision is made to deal with the payers then the terms should be clearly drawn to make sure each party knows what they are deciding to enter into. Lastly, when a deal has been made then it should also be clear if the deal will be done individually or through respondent. This will make sure if there is failure on either…