This report originally appeared in the August 2010 edition of DOTmed Business News.

The Minnesota Rural Health Cooperative (MRHC) has agreed to a settlement with the Federal Trade Commission (FTC) that prohibits anticompetitive tactics the group allegedly used. The group will be prohibited from using coercion with health insurers in order to increase health insurance reimbursement rates. The FTC's original complaint alleged that the MRHC collectively negotiated prices without any legitimate justification.

The MRHC consists of 25 hospitals and 70 doctors in southwestern Minnesota. The MRHC was accused of threatening to terminate contracts with payers to pressure them to increase prices for physician and hospital services. MRHC also allegedly refused to do business with health plans that did not agree to the inflated reimbursement rates. Besides being prohibited from coercive activities, the proposed settlement order also has a provision that the MRHC refrain from coercive tactics in negotiating contract terms with health insurers.
In addition, the order would require the MRHC to offer a renegotiation of all current contracts with health plans, and revised contracts would be submitted to the state for approval. According to the FTC, since investigation of the MRHC, the Minnesota legislature has passed legislation giving authority to state officials to review and approve contracts negotiated by health care provider cooperatives.

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