An analysis of physician antitrust exemption legislation: adjusting the balance of power

Current antitrust law restricts physicians from joining together to collectively negotiate. However, such activities may be approved by state laws under the so-called state action immunity doctrine and by federal legislation under an explicit antitrust exemption. In 1999, Texas became the first state to pass physician antitrust exemption legislation allowing physicians, under certain defined circumstances, to collectively negotiate fees with health plans. Last year, similar legislation was introduced in the US Congress, in 18 state legislatures, and in the District of Columbia. This legislation was passed only in the District of Columbia where its implementation was blocked by the city's financial control board. Nonetheless, legislation permitting physicians to collectively negotiate fees with managed care plans has been introduced in 10 state legislatures this year, and there is continued interest in introducing similar legislation in the US Congress. This analysis examines the basic features of this legislation and its potential impact on the balance of power between physicians and managed care plans.