The Department of Justice (DOJ) recently filed a complaint challenging Chiropractic Associates, Ltd. of South Dakota's (CASD) use of mandatory membership agreements containing collective negotiation provisions. The DOJ alleged that these provisions violate Section 1 of the Sherman Act (Section 1). The membership agreements authorize CASD to collectively negotiate contracts with health insurers and other payers on behalf of its chiropractor-members with the expressed goal of obtaining higher fees from payers. Since 1997, CASD has negotiated collective contracts to set prices and price-related terms with at least seven payers on behalf of its approximately 300 members (nearly 80% of all practicing chiropractors in South Dakota).

The DOJ alleged that, because CASD members comprise a majority of South Dakota chiropractors, the mandatory agreements violate Section 1 by:

According to the DOJ, CASD's contract negotiation does not have any procompetitive effects or efficiencies, as the individual chiropractors do not otherwise integrate their activities but rather compete with each other. For example, CASD members do not share the financial risk associated with performing chiropractic services, nor do they coordinate the level of care delivered to their patients.

As part of the proposed final judgment, the DOJ seeks to have CASD enjoined from, among other things:

This complaint shows the Antitrust Division's continuing focus on competition in the heath care industry.