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FTC charges Wisconsin association

The Wisconsin Chiropractic Association and its executive director, Russell A. Leonard, have agreed to settle Federal Trade Commission allegations that they "orchestrated a conspiracy" among the organization's members to increase prices for chiropractic services and to boycott third-party payers to obtain higher reimbursement rates.

Under the settlement arrangement, the doctors agreed to a long list of provisions regulating their actions, but did not have to plead guilty to any of the charges.

The settlement would prohibit the association and Leonard from fixing prices for any chiropractic goods or services, or the terms of third-party payer contracts.

Additionally, Michael T. Berkley, D.C., and Mark A. Cassellius, D.C., have agreed to settle Federal Trade Commission allegations that they conspired to fix prices for chiropractic services and to boycott the Gundersen Lutheran Health Plan to obtain higher reimbursement for chiropractic services in and around La Crosse, Wisconsin.

The Wisconsin Chiropractic Association, based in Madison, is an association of more than 900 Wisconsin chiropractors, representing about 90% of the chiropractors licensed in the state.

In January 1997, the federal government and many private insurance companies began using new billing codes for chiropractic manipulations. According to the FTC's complaint, the association and Leonard used the implementation of the new codes as a vehicle for orchestrating a collective price increase by Wisconsin chiropractors.

The association and Leonard organized and conducted seminars on the new codes throughout the State of Wisconsin, at which, among other things, Leonard advised chiropractors to raise their prices to specific levels, and assured members that if they all raised their rates, third-party payers would not reject or reduce these higher charges for the new codes.

Leonard also surveyed member pricing in certain localities, and reported back to members that chiropractors in these areas had succeeded in raising reimbursement levels, the FTC stated.

The complaint further charges that the group, again acting principally through its executive director, "engaged in other acts and practices in furtherance of its goal of increasing compensation for chiropractors in the state."

Although the consent agreement between the FTC and the doctors and organization does not constitute an admission guilt, it carries the force of law with respect to future actions. Each violation of the order may result in a civil penalty of $11,000.