Seeking to address questions raised by a recent U.S. Supreme Court decision that establishes personal liability for medical professionals acting in their roles as Medical Board members, the Federal Trade Commission has issued guidance explaining how Medical Boards can regulate their own professions without violating antitrust law. In N.C. State Bd. Of Dental Exam’rs v. FTC, 135 S. Ct. 1101 (2015) the U.S. Supreme Court ruled that that it was illegal for the Board, composed mostly of practicing dentists, to tell non-dentists working in mall kiosks to stop offering teeth-whitening services. The Board had argued that it was not subject to federal antitrust laws because it was a state agency. The Supreme Court held that the board would have had to show that it was actively supervised by the state in order to claim such immunity from antitrust law.
The effect of this ruling is that members of a licensing board who are practitioners in the industry they regulate may be considered “participants” in a conspiracy to restrain trade if they adopt anticompetitive policies. Under such circumstances, board members may be personally liable under the antitrust laws. Even board members who are not licensed to practice can be held to the same degree of culpability as licensed members. This is especially significant in states where no statutory limits have been placed on a government (or quasi-government) employee’s liability for antitrust violations. See, e.g., Local Government Antitrust Exemption Act, 50 I1.C.S. 35-1(E) (Illinois statute limiting antitrust liability of local government to injunctive relief.) See also Local Government Antitrust Act, 15 U.S.C. § 34-36 (1984) (local government afforded immunity from damages in antitrust litigation under federal law).
In conjunction with the U.S. Supreme Court’s ruling, the FTC has identified certain overarching legal principles governing when and how a state may provide active supervision for a regulatory board. Active supervision requires more than just advice from a state attorney general or other state official to the board. A state supervisor must review the substance of board decisions and have the power to veto or change the decisions to make sure that they are in line with state policy. Factors relevant to establishing active supervision are: whether the supervisor has discovered the relevant facts, collected data, conducted public hearings, received public comment, investigated market conditions, conducted studies and reviewed evidence. While these new factors may be difficult to parse out, it is clear from FTC guidance that antitrust analysis from a board perspective as well as a practitioner is fact-specific and context-dependent.
We urge you to reach out to competent healthcare counsel for customized advice on how best to protect yourself. Frier Levitt has extensive experience working with Boards of Professionals, and can provide valuable insight regarding this new FTC guidance. Contact Frier Levitt to speak to an attorney.
