MOULTRIE -- The death of South Georgia Health Partners will go almost unnoticed in Colquitt County, according to Jim Lowry.
Lowry, administrator of Colquitt Regional Medical Center, was among the founders of the physician-hospital organization struck down this week by a consent order from the Federal Trade Commission. The order was announced on the FTC's Web site Tuesday; the PHO will cease to exist Dec. 31.
"Closing it down has not really had any significant effect," Lowry said Wednesday.
SGHP was founded in 1995 to let several South Georgia physicians and hospitals present a united front in negotiations with providers of managed care insurance. It currently includes 15 hospitals and about 500 physicians in 15 counties from the Alabama line to Waycross.
According to the FTC complaint, the joint negotiation strategy was a violation of federal antitrust laws. Lowry disagreed.
FTC rules allow physician and hospital groups to negotiate together, he said, but they have to be set up in a certain way to fit within the law. The FTC allows the groups to fix prices for their members, provided the organization results in "efficiencies," such as lower operating costs, that would not be possible without the price-fixing.
SGHP hired Atlanta law firm King and Spalding to organize the group within those rules. Apparently the effort was flawed.
"We designed something they didn't think was right and they didn't give us the chance to change it," Lowry said.
An FTC news release depicts the issue as being much more serious than that.
According to the complaint, South Georgia Health Partners includes all but one hospital in the 15 counties it covers, and 90 percent of the physicians in those counties belong to the group. No managed care insuror can compete in the region without contracting with the members of SGHP, it said, and it accused SGHP of insisting on higher prices because of that.
One way managed care insurors base their fees is on Medicare's Resource Based Relative Value Scales. Jim Railey, president of South Georgia Purchasing Alliance, a group of Valdosta businesses involved in the complaint, told The Valdosta Daily Times Tuesday that the benchmark for a city the size of Valdosta or Tifton would be 130-150 percent of RBRVS.
The FTC complaint said SGHP members were charging 187 percent of the RBRVS. Coventry Health Care, a company that assembles physicians for health care insurors, described SGHP's rates as "the highest that Coventry pays in Georgia."
Lowry said the accusation is "totally false."
"Nobody was cheated in this," the CRMC administrator said.
Addressing charges of monopoly, Lowry said CRMC contracts with five managed care insurors, of which SGHP is one. Only about 4 percent of Colquitt Regional's total business comes from SGHP, he said.
Colquitt County's largest industrial employer, Riverside Manufacturing, uses Blue Cross, Lowry said, and its employees alone account for more CRMC patients than all of South Georgia Health Partners.
Lowry argued that participating hospitals did not set their fees non-competitively. Membership in South Georgia Health Partners did not determine what an individual hospital charged for a service, he said. Lowry provided statistics for two time periods that showed CRMC's rates being the second lowest of seven South Georgia hospitals (Tift Regional Medical Center in Tifton was slightly lower in both studies).
All the hospitals do give the same 10 percent discount to SGHP members, Lowry said. Colquitt Regional gives the 10 percent discount to all its managed care insurors.
And that, in fact, was one of the issues raised in the FTC complaint.
When an insuror can "play competitors off against each other," it can persuade a hospital to give it a deeper discount to get its business. United Health Group, cited in the complaint, was seeking a 25 percent discount during bargainings with SGHP but was rejected. SGHP's hospitals and physicians refused to negotiate with it individually.
There is a 30-day period for public comment, ending Oct. 9, after which the FTC board of directors will decide whether to make it final. Lowry did not indicate any intent to fight the order.