Peer Review Organizations of Ohio Foundation

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enjby 	f i r s t priority 	for 	selection a s a 	PRO.^ 	~ h c ym i g h t w e l l
also b able to meet HHS requirements 	for 	RphysLcian-access"
organization 	t h e other 	class sf 	organizations e l i g i b l e 	for FRO
designation.%' 	Rowever, 	it is possible 	t h a t 	those PSROS would
bava difficulty admlnfatctlng 	a statewide peer 	review p 	gram, or
would 	not be interested 	i n doing 	so even 	if they c o u l d , 28
t h a t PRWF will be 	t h e 	sola mechanism 	t h r o u g h 	which 	t h e y
eo$$ectlvely om individually will seek PRO d e s i g n a t i o n ,
7 percent 	of Ohio" 	pphyslcians 	as
42.0,5,C,A, 	S 2 3 2 0 ~ - %(I)[B) (West 1983)8 	49 Fed, 	Req, 	7202,
QFeb, 	29, 19841,

L a r r y 9. 	Spencer 	-6-
antitrust liability, 	A l t h o u g h 	a s u b s l a n t i a i lessening of
competition might 	be 	inferred from a substantial 	r e d u c t i o n 	in 	t h e
nmber 	of competitors 	(such as from three or 	four 	to two), PROOF
could 	seek 	to show that 	the vigor 	and effectiveness 	of the
competitive process would not 	be a d v e r s e l y 	a f f e c t e d ,
t h e 	answers are n o t 	apparent, g i v e n 	t h e 	information currently
available t o u s , 	As we have 	i n d i c a t e d , 	any challenge 	t o PR~QF's
operation would require substantial evidence on each o f 	a nmbar
sf critical elements, 	O n l y 	if a l l were present 	would 	a vloLation
be 	found,
T h e discussion a b v e 	is Limited to PRWF" 	formation and
wish 	to engage in.
We h a v e 	set 	forth a b a v e 	w h a t we consider 	to k 	t h e p t e n t i a l
antitrust r i s k s 	involved 	in PROOFe% p l a n 	t o seek designation as
t h e PRQ for Ohio, 	The significance of 	those risks depends on
f a c t u a l questions that we could 	fully resolve, 	if at a l l , 	only
after 	extended 	inquiry, 	The 	information we 	now h a v e does n o t
give us s t r o n g rehson 	to b e l i e v e 	that PROOF" 	formation, or 	its
plan 	to seek designation as 	t h e PRO 	for O h i o , 	would 	be 	illegal
under 	t h e F e d e r a l 	antitrust 	laws, 	W e hope 	t h a t 	the preceding
discussion will help PROOF determine whether 	and 	h a s 	it can
implement 	its plane 	to seek PRO designation, 	and operate as the
FRO 	for O h i s 	i f 	selected, 	in compliance with 	t h e 	antitrust 	L a w s ,
competition there may 	be, 	or may 	d e v e l o p In the f u t u r e , 	among
those PSROs 	to perform 	non-Medicare 	peer 	review,

Larry D, 	Spencer 	-7-
Thna 	l e t t e r reflects 	infarma$ s t a f f 	g u l d a n e e , 	T h e s t a f f
reserves 	t h e 	r i g h t 	to reconsider this o p i n i o n and, 	w i t h 	notice to
the requesting party. 	to rescind this o p i n i o n 	i f 	t h e p u b l i c
interest so requires. 	In addition, 	under 	Section 1.3(c) 	of 	t h e
mmissiongs R u l e s o f Practice, 	t h e Ce,mbssPon 	is n e i t h e r 	b u w d
b y - t h i s advice nor 	foreclosed from t a k i n g 	action regarding the
mrrduct 	i n question,
S i n c e r e l y y o u r s ,
blrtbun: N, Lernes
Assistant Director