BOISE (CN) - State and federal prosecutors say orthopedists in Boise conspired to fix prices by agreeing not to treat most patients covered by workers' compensation insurance, to raise the fees paid to them by the Idaho Industrial Commission. Prosecutors sued five doctors, the Idaho Orthopaedic Society and the Idaho Sports Medicine Institute in Federal Court.
Prosecutors say the conspiracy began in 2006 in reaction to the Industrial Commission's new fee schedule for workers' compensation patients. The fee schedule determined physician payments through a "Resource-Based Relative Value System." It set the price at $88 for most orthopedic procedures.
Many doctors decided the fee was too low and by October 2006 most of the approximately 65 orthopedists in Boise had stopped seeing workers' compensation patients, according to the complaint.
As a result of the boycott, the Industrial Commission raised the workers' compensation rates by 61 percent the next year. After the new rates were announced, the defendants and their co-conspirators agreed to end their boycott and accept the new rates, according to the complaint.
Fueled by the success of the workers' compensation boycott, groups of independent physicians again joined forces and dropped out of their insurance contracts with Blue Cross of Idaho to force it to offer better terms, according to the complaint.
The defendants are charged violating the Sherman Act and the Idaho Competition Act. Prosecutors seek an injunction and costs.
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