United States v. American Soc. of Anesthesiologists

• Decision Date: 21 June 1979
• Docket Number: No. 75 Civ. 4640 (KTD).,75 Civ. 4640 (KTD).
• Citation: 473 F. Supp. 147
• Parties: UNITED STATES of America, Plaintiff, v. The AMERICAN SOCIETY OF ANESTHESIOLOGISTS, INC., Defendant.
• Court: U.S. District Court — Southern District of New York

473 F. Supp. 147

UNITED STATES of America, Plaintiff, v. The AMERICAN SOCIETY OF ANESTHESIOLOGISTS, INC., Defendant.

No. 75 Civ. 4640 (KTD).

United States District Court, S. D. New York.

June 21, 1979.

Ralph T. Giordano, Atty., Dept. of Justice, New York City, for plaintiff; John Sirignano, Jr., Douglas C. Foerster, Edwin Weiss, Daniel J. Pearlman, New York City, of counsel.

Simpson, Thacher & Bartlett, Washington, D. C., for defendant American Society of Anesthesiologists, Inc.; John Lansdale, Jr., Rickard F. Pfizenmayer, Timothy W. Bergin of Squire, Sanders & Dempsey, Washington, D. C., of counsel.

OPINION

KEVIN THOMAS DUFFY, District Judge:

This is an action brought by the United States of America against the American Society of Anesthesiologists hereinafter referred to as "ASA" charging that organization with violating Sections 1 and 4 of the Sherman Act, 15 U.S.C. §§ 1 and 4. The government alleges that the ASA combined and conspired with its component societies, individual anesthesiologists and others to engage in a restraint of interstate commerce. This conspiracy allegedly consisted of an agreement to raise, fix, stabilize and maintain fees charged by anesthesiologists for anesthesia services. The government contends that the adoption, publication and circulation of relative value guides is a per se violation of the antitrust laws and as such should be enjoined. The ASA denies that it engaged in any conspiracy and maintains that the drafting, adoption and publication of relative value guides constitutes a proper and reasonable service to its members, government agencies and health insurance carriers.

BACKGROUND

The ASA is a tax exempt membership corporation organized and existing under the laws of the State of New York with its only office in Park Ridge, Illinois. Most of its members are physicians engaged in the practice of anesthesiology, however, there are some non-physician members.

In 1975 ASA membership included:

(a) 9,463 "active members," who are licensed physicians or physicians on active duty in the Armed Forces engaged in the practice of, or otherwise especially interested in, the medical specialty of anesthesiology;

(b) 300 "affiliate members," who are physicians not engaged in the clinical practice of anesthesiology; scientists, not physicians, who are in the service of the United States Government; and physicians who are non-residents of the United States;

(c) 2,388 "resident members," who are physicians in full-time training as interns or residents in anesthesiology;

(d) 1,300 members in other categories including "honorary members," who have attained outstanding eminence in anesthesiology; "life members," who are Past-Presidents of ASA; and "retired members," who are physicians who have been active members for ten or more years and have retired from professional activity.

ASA component societies are organizations of anesthesiologists, chartered by ASA, but independent in the sense that they determine their own policies unless such policies are specifically required by ASA By-Laws. ASA has active component societies in 48 states, the District of Columbia and the Commonwealth of Puerto Rico. Some of these component societies are themselves subdivided based upon geographic area. For example, The New York State Society of Anesthesiologists is comprised of eight "District Societies."

Active members and certain affiliate members become such by joining component societies. A substantial number of ASA members, however, are not members of component societies.

Under its By-Laws, ASA is governed and its policies are determined by a House of Delegates, most of whom are elected by the voting members or the legislative bodies of the component societies. ASA's business affairs are controlled (subject to override by the House of Delegates) by a Board of Directors whose members are elected by ASA's active and life members in 28 "Director Districts", 11 of which are geographically co-extensive with the component societies. The House of Delegates meets annually and, among other items of business, elects officers, including a President, President-Elect, and First Vice President. A Secretary and a Treasurer are elected by the House of Delegates for two-year terms beginning in odd numbered years.

Anesthesiology is a medical specialty which deals with the management of procedures for rendering a patient insensible to pain during surgical, obstetrical and certain other medical procedures; the support of like functions under the stress of anesthetic and surgical manipulation; the clinical management of the patient unconscious from whatever cause; the management of problems in cardiac and respiratory resuscitation; the application of specific methods of inhalation therapy; and the clinical management of various fluid, electrolyte and metabolic disturbances. The specialty had a somewhat stop and start development; although important anesthetic drugs were discovered in the nineteenth century, the techniques and arts of anesthesia did not advance until approximately 1928. As a result of this failure to develop new anesthetic drugs and techniques, surgical procedures were also limited. Prior to 1928 the administration of anesthesia was regarded as a relatively simple procedure that did not necessarily require the expertise of a medical doctor. For the most part, nurses and technicians were utilized to administer anesthetic drugs.

Development advanced significantly in 1928 when Dr. Ralph Waters established the first department of anesthesia at the University of Wisconsin. Other medical establishments followed suit and in 1939 the American Board of Anesthesiology was created to test and certify the competence of physicians in this newly-developed specialty. It was World War II, however, that provided the impetus for the widespread development of the specialty. The government required that physicians be utilized to administer anesthesia wherever possible and, accordingly, young doctors were given crash courses in the area. As a result of this experience, surgeons began to recognize the value of physician-administered anesthesia and demand their expertise when they returned to civilian life. In addition, many of the young physicians who practiced anesthesia during the war decided to pursue that specialty. This new interest spurred efforts to establish additional residency training programs and to recruit more doctors into the field.

When the specialty was still young, it was common for anesthesiologists to work as salaried employees of the hospitals in which they practiced their profession. Anesthesia was considered part of the hospital's services and was billed to the patients as such. Anesthesiologists were dissatisfied with this manner of practice because it impaired their status in the medical community and their recognition by the community at large. Additionally, the level of compensation was below that of other specialists, a factor which contributed to discouraging new entrants into the field.

By 1957 the salaried anesthesiologist had become the exception. Anesthesiologists began to establish independent practices and were able to obtain hospital privileges upon the same terms and conditions as other clinicians. Today, between 80 and 90% of those ASA members who are actively engaged in the practice of anesthesiology derive income from fees paid by or on behalf of individual patients. Although there are no authoritative figures on the income of anesthesiologists, it has been estimated that ASA members realize annual revenues in excess of $675 million. To place this sum in perspective it should be noted that available figures indicate that in 1975 there were approximately 13,370 physicians in the United States engaged in anesthesiology and nearly all were ASA members.

The principal activity of most anesthesiologists who are in the clinical practice of medicine is in connection with the performance of surgery in a hospital. Ordinarily, the patient about to undergo surgery does not choose his anesthesiologist. That decision is usually made by the surgeon or assigned to the patient's case by the operating room supervisor or head of the anesthesiology department. It is not uncommon for a patient to have his first contact with the anesthesiologist just prior to being brought into the operating room for surgery.

It is perhaps a result of this minimal contact that the anesthesiologist and his patient rarely discuss fees prior to surgery. Even where there is a significant presurgical meeting, however, it appears that patients seldom inquire regarding fees. Indeed, the patient usually learns the amount of the fee when the bill is rendered.

It is common practice for a group of anesthesiologists, organized as a single business entity, to carry on all of the anesthesia practice in a single hospital. This does not necessarily mean that a non-group member could not practice in that hospital if a request were made. There are also some hospitals where more than one group practices in the same hospital or where individual anesthesiologists practice in the same hospital. Even where group practices exist, it is not uncommon for fees to vary among members of the group.

INTERSTATE COMMERCE

For the most part, anesthesia fees are covered by health insurance. Health insurance carriers sell insurance policies to individuals or groups of individuals. These policies, in consideration of premiums paid by or on behalf of the insured, cover the expense of health services either by way of reimbursement of payments made by the insured, or by direct payment to the provider of the health service, depending on the terms of the policy. Companies engaged in the business of selling health insurance policies regularly receive premium payments made across state lines and make payments to providers of health services, to the holders of policies and to others across state lines in a regular flow of interstate commerce. Where...