TriState Health Partners, Inc.

The Federal Trade Commission and the Department of Justice (“the Agencies”) first discussed “clinical
1
integration” among health care providers in their joint Statements of Antitrust Enforcement Policy in Health Care
(August 1996), 4 Trade Reg. Rep. (CCH) ¶ 13,153 (hereinafter referred to as “Health Care Statements”), available at
http://www.ftc.gov/bc/healthcare/industryguide/policy/index.htm. See also Improving Health Care: A Dose of
Competition, A Report by the Federal Trade Commission and the Department of Justice (July 2004) (available at
http://www.ftc.gov/reports/healthcare/040723healthcarerpt.pdf ) at Ch. 2, pp. 36-41.
UN ITED STATES OF AM ERICA
FEDERAL TRADE COMMISSION
W ASH IN GTO N , D .C. 20580
Bureau of Competition
Health Care Division
April 13, 2009
Christi J. Braun, Esquire
Ober, Kaler, Grimes & Shriver
1401 H Street, N.W., Suite 500
Washington, D.C. 20005-3324
Re: TriState Health Partners, Inc. Advisory Opinion
Dear Ms. Braun:
This letter responds to your request for an advisory opinion on behalf of TriState Health
Partners, Inc., a physician-hospital organization based in Hagerstown, Maryland. TriState
proposes to “clinically integrate” its members’ provision of health care services, and to contract
jointly with health plans and other payers on a fee-for-service basis on behalf of its members to
provide services to plan beneficiaries.1
As is discussed in detail below, it appears that, if implemented as you have described, TriState’s
proposed program would be a bona fide effort to create a legitimate joint venture among its
physician and hospital participants that has the potential to achieve significant efficiencies in the
provision of medical and other health care services that could benefit consumers. After
evaluating the proposal, we have concluded that, if implemented as you have described, we
would not recommend that the Commission challenge the program. This opinion rests on three
central conclusions:
∑ TriState’s proposed program, while still in the early stages of development in some
respects, appears to have the potential to create substantial integration among its
participants, with the potential to produce significant efficiencies, including both
improved quality and more cost-effective care.
∑ Joint contracting with payers on behalf of its competing physician members appears to be
subordinate and reasonably related to TriState’s plan to integrate its members’ provision
of services to deliver coordinated care by a group of providers committed to the program,

Letter to Christi J. Braun
April 13, 2009
Page 2
This advisory opinion letter is based on the information that you have provided to us on behalf of TriState,
2
plus some additional information provided by other parties. W e have not conducted an independent investigation to
confirm, or supplement, the information that has been provided to us.
TriState is governed by a board of directors that includes five representatives of its hospital member, and eight
3
physician member representatives, including four primary care physicians, two surgeons, and two medical
specialists, one of whom must be a hospital-based practitioner.
Under TriState’s bylaws, an act to be taken by the board requires that each class of board members have a
4
quorum (i.e., a majority of the board members representing that class of TriState members) present, and requires
approval by a majority of those present for each class. TriState’s operations are managed by an administrative staff
of eight.
TriState’s member physicians include primary care physicians (identified as including pediatricians, family
5
practitioners, general practitioners, and internists, excluding those practicing in internal medicine sub-specialties),
specialty care physicians, hospital-based physicians, and oral surgeons, all of whom are licensed to practice in
Maryland, as well as medical group practices whose individual physician members meet that requirement.
(continued...)
and reasonably necessary to effectively implement the proposed program and achieve its
potential efficiency benefits. Accordingly, TriState’s collective negotiation of contracts
with payers in connection with the proposed program, including the prices to be paid for
the services of the physician participants, should be evaluated under the antitrust rule of
reason.
∑ While TriState’s physician members as a group, and TriState’s hospital member, may
have market power in their respective markets, it appears that the program as described is
unlikely to enable them to exercise or increase any such power. Critical to this
determination is the representation that physician members and the hospital member will
remain available to contract individually outside the proposed program. If participants
were to operate in ways different from what TriState has proposed, TriState’s program
could raise serious competitive concerns.
As is customary with FTC advisory opinions, our conclusions are based on your representations
and the information that you have provided. As a prospective assessment based on limited2
information, the advisory opinion is necessarily tentative and expresses the staff’s current
enforcement views, which likely would change if implementation of the proposed program
proved to have anticompetitive effects.
I. Description of TriState and Its Current Operations
TriState is a physician-hospital organization (“PHO”) based in Hagerstown, Maryland, whose
more than 200 physician members and one hospital member are located in Washington County,
Maryland. TriState is organized as a Maryland non-stock membership organization, and was
incorporated in 1995. It has two classes of membership : Class I members are physicians; and3 4 5

Letter to Christi J. Braun
April 13, 2009
Page 3
(...continued)5
Approximately 40 of these Class I physician members are employees of TriState’s Class II member – W ashington
County Hospital Association – or one of its subsidiaries. These employed physicians practice in eight specialty
areas. The remainder of TriState’s Class I members are independently practicing physicians practicing in a variety
of specialty areas. Currently, TriState also has approximately 70 non-members, including physicians, nurse
midwives, and clinical social workers, with whom it contracts for the provision of health care services.
W ashington County Hospital Association operates the 292 licensed acute care bed W ashington County
6
Hospital, which “offers a full range of adult and pediatric inpatient and outpatient services including intensive and
progressive care units, a family birthing center, mental health services, cancer therapy, surgical care, cardiac
catherization, physical and occupational rehabilitation, and diagnostic imaging.” The hospital’s licensed beds
include 218 medical/surgical, 18 obstetric, 10 pediatric, 18 psychiatric, and 28 acute rehabilitation beds, and the
facility is designated by the State of Maryland as a Level III Trauma Center. W ashington County Hospital
Association also operates a variety of related diagnostic, treatment, and support facilities and services covering
virtually every area of medical service need, including inpatient, outpatient, and home-based services. W ashington
County Hospital Association also owns a minority interest in Maryland Physicians Care, a M edicaid HMO with
approximately 90,000 members in Maryland, about 9,000 of whom are located in W ashington County. Washington
County Hospital Association’s parent organization, W ashington County Health System, Inc., also owns Antietam
Health Services, a for-profit subsidiary that operates or joint ventures in a variety of business enterprises related to
the provision of outpatient health care services, such as diagnostic imaging, outpatient surgery, endoscopy, medical
transport, medical supplies, and management services.
Specifically, you have identified W ashington and Frederick counties in Maryland, Franklin and Fulton
7
counties in Pennsylvania, and Morgan, Jefferson, and Berkeley counties in W est Virginia as the areas served by
W ashington County Hospital and TriState.
You describe InforMed as “an Annapolis, Maryland health-care consulting and information technology
8
company that provides third party administrator (‘TPA’) services, medical management, health information
reporting, health information technology, and a regional network of physicians, hospitals, and ancillary providers.”
You state that “TriState physicians deal directly with InforMed on any issues related to fees or payment of
9
(continued...)
the sole Class II member is Washington County Hospital Association, a non-profit corporation
that operates Washington County Hospital and which, in turn, is a member of the Washington
County Health System, Inc., also a non-profit corporation. TriState’s physician members6
provide medical services to patients located in western Maryland, southern Pennsylvania, and
northern West Virginia, although you state that their primary service area essentially is7
Washington County, Maryland.
TriState began as a risk-sharing joint venture to enter into capitation contracts with payers. It,
however, offered such risk-sharing arrangements for only one year. Since 1998, TriState and its
physicians have offered their services through InforMed, L.L.C. TriState members who wish to8
participate in the InforMed provider network, Community Health Partners, each separately and
individually agree to accept InforMed’s fee-for-service reimbursement rates, and sign
participation agreements with TriState evidencing their agreement to participate in InforMed’s
network through TriState. Under this arrangement, TriState has contracted with InforMed for9

Letter to Christi J. Braun
April 13, 2009
Page 4
(...continued)9
claims. W hen fee schedule modifications are made, practitioners are free to accept, reject, or negotiate
modifications with InforM ed directly. TriState is not involved in these discussions.” W e have not reviewed this
aspect of TriState’s current operations, and offer no opinion regarding TriState’s or its physician members’ current
activities involving InforMed.
Under the proposed program, however, utilization management will be under the supervision of physicians,
10
rather than the TriState staff, and be done by the Quality Assurance/Utilization Management Committee and the
Quality Improvement Committee.
TriState’s contracted non-physician providers include four nurse-midwives employed by W ashington County
11
Hospital Association, and fifteen clinical social workers, who are not eligible to be Class I members of TriState.
You state that TriState’s primary service area, which includes and extends slightly beyond W ashington
12
County, Maryland, has a population of about 145,000. TriState’s secondary service area, which includes parts of
(continued...)
TriState’s providers to participate in the Community Health Partners network, and for TriState to
provide certain administrative services for InforMed, including physician credentialing, network
management, clinical oversight, and utilization review. TriState also has agreed to obtain certain
information technology services from InforMed, including “management of TriState’s claims
information database, design and support of an interactive website, and internet-based software
for eligibility verification and medical referrals.”
TriState currently sells an employee wellness program and provides medical management
services, including case management, disease management, and pharmacy management services.
These programs are operated primarily by TriState’s administrative staff, and are sold separately
from the services of TriState’s physicians. The proposed program will include these services,10
along with the various components that directly involve the provision of services by TriState’s
physicians.
II. The Current Market Environment in Which TriState Operates
You describe TriState as currently having 212 member physicians, including about 40 member
physicians employed by Washington County Hospital, itself also a TriState member, with the
remaining 172 physician members being privately practicing physicians in 78 separate practices.
You also note that there are about 50 additional “contracted” physicians and 19 contracted non-
physician health care providers who, while not formally members of TriState, nevertheless
currently provide services to persons covered under TriState’s existing contracts through
InforMed. Finally, you state that Washington County Hospital – the only hospital in the county11
– has a medical staff of 319 physicians. It therefore appears that TriState physicians represent a
very substantial majority of the physicians practicing at the hospital and in Washington County,
which you identify as both TriState’s and the hospital’s primary service area; that is, the area
from which the hospital draws more than 80 percent of its admissions.12

Letter to Christi J. Braun
April 13, 2009
Page 5
(...continued)12
Pennsylvania and W est Virginia, as well as Frederick County, Maryland, has a population approaching 350,000.
InforMed provides third-party administrator services, such as claims processing, to the contracting employers,
13
and offers utilization and medical management services to employers that want those services.
The W ashington County Health System, Inc., employee benefit plan covers about 5,000 lives. The two other
14
self-insured employer programs that TriState and its physician members serve through InforMed together cover
about 650 lives.
A. Alternatives to TriState or Its Members in TriState’s Service Area
1. Provision of Medical Services by TriState
Physicians Other Than Through TriState
TriState physicians provide their professional medical services through a variety of
arrangements. TriState physicians who participate in InforMed’s Community Health Partners
network provide their services to persons covered under contracts that InforMed has entered into
with self-insured employers in Washington County. InforMed contracts with self-insured
employers to offer access to its provider network, which includes physician and hospital
providers. InforMed currently has contracts with three self-insured employers in the area,13
covering a total of about 5,650 lives. The largest InforMed contract for which TriState provides
medical services is with the employee benefits plan for the Washington County Health System,
Inc., the parent organization of TriState’s sole Class II member, the Washington County Hospital
Association.14
Besides offering their medical services through InforMed’s provider network, you state that
TriState physicians also participate in a variety of programs involving other payers. You
identify various government programs and several commercial payers operating in TriState’s
service area. You state that TriState member physicians participate in these payers’ programs
through individual contracts entered into between the physicians and each payer and, while you
provide no specific statistics in this regard, you state that TriState’s members “contract directly
with most payers.”
2. Other Providers and Networks in TriState’s Service Area
TriState appears to include a substantial majority of the physicians practicing in Washington
County, TriState’s primary service area. And, as you acknowledge,“[t]here are no other IPAs or
PHOs other than TriState operating within Washington County.”
You also state, however, that TriState physicians represent a considerably smaller percentage of
physicians within TriState’s (and Washington County Hospital’s) much broader secondary

Letter to Christi J. Braun
April 13, 2009
Page 6
You note that there are about 1,200 physicians in TriState’s secondary service area, of which TriState
15
physicians represent only about 16 percent. You have not, however, specified what percentage of physicians in
TriState’s primary service area – essentially W ashington County, Maryland – TriState’s physicians represent.
You describe Waynesboro Hospital as “a 62-bed hospital . . . (about 20 minutes north of Hagerstown),” and
16
identify “the 232-bed Chambersburg Hospital . . . [as] located about 30 minutes from Hagerstown.”
You describe City Hospital as “a 144-bed hospital . . . [located] [t]hirty minutes to the south [of
17
Hagerstown].”
You describe Frederick Memorial Hospital as “a 253-bed hospital located about 30 minutes east of
18
Hagerstown.” You state that “Frederick County’s only physician contracting organization ceased operations on
December 31, 2006, and most of its former members now contract directly with payers.”
service area, which accounts for an additional 14.5 percent of hospital admissions. Within this15
broader service area, you identify three other health systems and two related provider networks.
These include Summit Health, with hospitals in Waynesboro and Chambersburg, Pennsylvania,
and the Cumberland Valley Health Network – a PHO “aligned with Summit Health;” City16
Hospital in Martinsburg, West Virginia, and the Eastern Panhandle Integrated Delivery System,
a “provider-sponsored, vertical arrangement of physicians and hospitals serving nine counties in
eastern West Virginia,” through which “many of . . . [City Hospital’s] medical staff members
contract with payers;” and Frederick Memorial Hospital in Frederick, Maryland, which you17
state no longer has a contracting physician network dealing with payers.18
B. Payers Operating in TriState’s Service Area
In addition to InforMed’s Community Health Partners network, through which TriState
physicians provide services under its self-insured employer contracts, you identify a variety of
third-party payers and programs that operate in TriState’s combined primary and secondary
service areas. Government payer programs include Medicare, Medicaid, and Tricare, which you
estimate together cover approximately 48 percent of all patients in the area, with worker’s
compensation covering slightly more than one percent of area patients. About four and a half
percent of patients are identified as self-paying, not covered by any third-party payer program.
The remaining roughly 46 percent of area patients are covered by non-governmental health
plans. The largest commercial payers in the area are CareFirst Blue Cross Blue Shield, and
United Health Care/MAMSI, which together cover almost 71 percent of those with private
coverage. In addition, Aetna and Cigna do business in the area. While you did not provide
statistics specifically addressing payer market shares in the health system’s and TriState’s
smaller primary service area, you state that TriState “has no reason to believe . . . that the
statistics would be different if it looked only at patients residing in Washington County,
Maryland, which is roughly its primary service area.”

Letter to Christi J. Braun
April 13, 2009
Page 7
In contrast to TriState’s current contracts with self-insured employers through InforM ed, under TriState’s
19
proposed program, InforM ed will no longer serve as the third-party administrator for self-insured employers.
InforMed will, however, continue to serve as the data warehouse, software developer, and technical vendor for
TriState.
III. TriState’s Proposed Program
A. Purpose and Description of the Proposed Program
TriState now proposes to develop and implement a program through a “multi-provider network
joint venture that will integrate its members clinically as described in Statements 8 and 9 [of the
joint FTC and Department of Justice Health Care Statements].” Under the proposed program,
TriState’s members would provide medical and other health care services, including hospital
services, to persons covered under health benefits programs offered by self-insured employers
and other payers in TriState’s service area. TriState identifies three main objectives for its
proposed program: (1) to “facilitate and assure cooperative interaction and collaboration among
TriState’s member physicians” so as to “align the efforts of the physicians to improve their
patients’ health and their delivery of services, resulting in the right care being rendered in the
right setting at the right time;” (2) to “engage every TriState stakeholder – physicians, case
managers, administrators, payers, and patients – in a cohesive and comprehensive program of
care management,” that “should result in identifiable quality improvements for patients and
significant financial benefits for payers;” and (3) to allow TriState to offer payers “an integrated
set of services . . . not previously available in the market,” which “will be desirable to self-
insured employers looking to control their rising cost of providing health care coverage to
employees,” and “will also offer a competitive advantage to health plans and other payers
seeking to distinguish their products on the basis of quality or quality-adjusted cost.”19
TriState broadly describes itself and its proposed program as
offer[ing] payers a network of primary care and specialist physicians whose
services will be integrated through a formal and stringent medical management
program that includes protocol development and implementation, performance
reporting, procedures for corrective action when necessary, and aggressive
management of high-cost, high-risk patients. The program will offer payers a
network of coordinated services from physicians committed to improving
outcomes by working together to achieve quality improvements not possible by
working independently. TriState’s physicians will actively collaborate in the
development of all facets of the program, ensuring the cooperative delivery of
high-quality, cost-effective care.

Letter to Christi J. Braun
April 13, 2009
Page 8
This letter broadly summarizes our understanding of various major aspects of the proposed program whose
20
components are described in greater detail in the materials you have submitted.
You state that “[t]he main technology piece is InforMed’s virtual electronic health record, commonly referred
21
to by TriState as the Clinical Claims Chart (‘Chart’). Incorporated into the chart are Ingenix’s Symmetry family of
products – Episode Treatment Groups (‘ETGs’), Episode Risk Groups (‘ERGs’), and Evidence Based M edicine
Connect (‘EBM Connect’).” Episode Treatment Groups will collect data regarding claims and medical encounters
or related services (e.g., pharmacy), and organize the data into episodes of care (similar to Medicare’s diagnosis-
related groups), which can be used for provider profiling, utilization management, clinical benchmarking, and
disease management. Episode Risk Groups can be used to predict health risk and identify high-risk patients in
various categories. Evidence Based M edicine Connect focuses on several important preventative screening
procedures and 50 costly medical conditions for which there is strong evidence supporting documented guidelines.
Evidence Based Medicine Connect allows assessment of both provider and patient compliance with certain
guidelines and preventative screenings, flags non-compliers, and allows the plan to target interventions, such as
disease management, medication adherence, patient safety, and care patterns.
As of mid-July 2008, you reported that 18 clinical practice guidelines had been approved by TriState’s Board
22
of Directors, and that 30 others were in various stages of development and review. The functions of developing and
monitoring compliance with clinical guidelines, both individual and for the entire program, are performed by
TriState’s Quality Improvement Committee, with involvement of multiple ad hoc committees of specialists in the
areas to which the guidelines apply. TriState’s stated goal is to have “at least 80 percent of the medical conditions
comprising at least 80 percent of the cost of care in the community, covered by at least one clinical guideline.”
You note that typically about five percent of health plan beneficiaries account for 60 percent of claims
23
expenses, and that 40 percent of beneficiaries file no claims in a given year, supporting the view that focusing on the
treatment of the relatively few high-cost patients may be the most effective way to achieve program cost savings.
More specifically, you identify a variety of activities that TriState plans to undertake or expand
from its current activities, as part of its proposed program. Central to the proposed program is20
TriState’s plan to implement a web-based health information technology system that will help
identify “high-risk and high-cost patients,” and “will facilitate the exchange of patients’
treatment and medical management information” in order to “more aggressively manage . . .
[TriState’s] patients’ care than . . . [the providers] could achieve working independently.”21
TriState believes that this “aggressive care management should result in identifiable quality
improvements for patients and significant financial benefits for payers.”
TriState is in the process of developing clinical practice guidelines, and will monitor physicians’
adherence to them, as well as more broadly seeking means of improving clinical efficiency
through other changes in the program’s policies and procedures. TriState will use InforMed’s22
software to review episodes of care; i.e., “all of the medical care and services a patient receives
from the onset of an illness or disease through final treatment,” to determine where performance
improvement will have the greatest financial and quality benefits. This information will be23
used to review and, as appropriate, modify specific clinical guidelines or “care protocols” used
by TriState in the proposed program. The Quality Improvement Committee and TriState staff
will seek to identify instances of both overutilization and underutilization of services, and work
with physicians to address these issues.

Letter to Christi J. Braun
April 13, 2009
Page 9
The initial period for current non-members to join TriState is 60 days, after which there will be an annual 30-
24
(continued...)
TriState also will develop, implement, and oversee policies and procedures related to the
program’s utilization management, case management, and disease management activities. As
noted previously, TriState currently offers and sells medical management services, including
case management, disease management, and pharmacy management programs, as well as
employee wellness programs, which are provided by TriState’s administrative staff. These
services also will be part of TriState’s proposed program. TriState will also continue to offer
these services separately from its proposed program for those who are interested only in
purchasing these specific services. However, when they are provided as part of the proposed
program, these services will be under the direction of the physicians on the Quality
Assurance/Utilization Management Committee and the Quality Improvement Committee, rather
than just the TriState staff, and will be coordinated with the program’s protocol development and
implementation, quality monitoring, and patient management services.
As part of the proposed program, TriState will monitor achievement of physician performance
targets, using peer, regional, and national benchmarks, and make recommendations for both
individual and group performance improvement. Individual physicians’ performance will be the
subject of “report cards” and peer counseling and educational efforts, as needed, with eventual
discipline and even expulsion from the program, if necessary, for those who fail or refuse to
conform their practices to the established program parameters. TriState’s stated goal, however,
at least initially, is to “move the mean” in terms of the performance of its participants, rather
than to winnow performance “outliers” from the program. Specific details of how TriState’s
performance measurement and evaluation processes will operate, both for individual TriState
physicians and for the group as a whole, were not provided. You noted that TriState “is in the
very early stages of determining which metrics initially will be measured, how they will be
measured, and how this will be communicated to the membership.”
B. Participants’ Obligations and Commitments Under the Proposed Program
1. Membership and Financial Investment in TriState
While most of the physicians who provide their professional services under TriState’s current
contracts already are Class I members of TriState, a substantial number of physicians and other
health care providers have been non-members who operated under “contractor” arrangements to
provide services under TriState’s payer contracts. In order to assure the necessary commitment
to the proposed program and its requirements, you state that TriState is eliminating this form of
participation status. Physicians who wish to participate in the proposed program will be required
to be or become Class I members of TriState. After an initial, time-limited, opportunity to join
TriState, physicians who subsequently wish to become members will be limited in their
opportunities to do so. For a multi-physician group practice to participate in the proposed24

Letter to Christi J. Braun
April 13, 2009
Page 10
(...continued)24
day open enrollment period for physicians who initially declined enrollment to join. Exceptions to this limitation on
new members also will be made for physicians needed in “must-have” or limited access specialties and for
physicians new to the community who join existing practices that already are members of TriState. You state that
“[m]oving forward . . . [TriState] intends to be much more selective in allowing new physicians to join,” although it
appears that the substantial majority of physicians practicing in TriState’s primary service area already are, or after
the initial enrollment period will be, members of TriState.
Apparently physicians and other health care providers who are not TriState members nevertheless may be
25
allowed to provide services to patients covered under TriState’s program contracts with self-insured employers or
other payers if the employer or payer chooses to allow access to this supplemental provider panel, and separately
contracts with Informed’s Community Health Partners network or other providers or networks for such services.
You anticipate that this type of arrangement may occur regarding the W ashington County Health System, Inc.,
employee benefit plan that currently is TriState’s largest contract. You go on to say that, in order to provide
incentives for enrollees to stay within the program for their care, TriState will attempt to have payers designate these
additional providers as part of a “second tier network,” with higher co-payments and lower benefits (unless waived
due to medical necessity) for enrollees using their services. You should be aware that the conclusions regarding
TriState’s and its members’ joint negotiation and contracting with payers regarding the proposed program does not
apply to any arrangements between payers and such supplemental provider networks, whose participants are not
fully integrated into the proposed program.
program, all of the practice’s physicians – including any who subsequently join the practice –
must become TriState Class I members and agree to all requirements of participation in the
program. TriState’s fifteen currently contracting licensed clinical social workers, who as non-
physicians are not eligible for formal membership, will provide services through direct contracts
with InforMed’s Community Health Partners network. The four nurse midwives currently25
providing services already are employees of TriState’s hospital (Class II) member.
In order to become a Class I member of TriState, a physician must submit a written application,
successfully complete TriState’s credentialing process, be approved for membership by the
TriState’s board of directors, pay the required “joining fee” of $2,500, and sign a participating
provider contract that TriState has designed especially for the proposed program, which spells
out the obligations and requirements of both the physician and TriState regarding the program.
2. Participating Provider Contract
The “TriState Member Participating Provider Contract – Clinical Integration,” which each
physician member must execute, is the primary document formally evidencing TriState
physicians’ commitment to, and specifying their obligations regarding, the proposed program.
One requirement of the agreement is that member physicians agree in advance to participate in
all contracts that TriState enters into with payers for the proposed program, and to comply with
the requirements of those contracts. Physicians cannot opt out of participating in individual
contracts, or pick and choose among them regarding their participation. You state that this
requirement helps to assure that the panel of physicians providing services under the program is
stable and identifiable at the outset, and is not likely to vary from contract to contract. Having a
stable, identified panel of physicians, in turn, is expected, among other things, to facilitate in-

Letter to Christi J. Braun
April 13, 2009
Page 11
Regarding the situation, mentioned previously, where patients enrolled in the proposed program choose to
26
seek care from providers who are not members of TriState, but who are part of the Community Health Partners
provider network, you anticipate that “[i]n the event that Plan enrollees see CHP physicians, the [TriState]
physicians, through monitoring of their patients’ EHRs [electronic health records], should be able to determine
whether or not their patients received guideline-directed care from the CHP physicians and, through follow-up care,
make up for any omissions. Although its achieved efficiencies may not reach the level of a closed-panel product,
[TriState] intends to do what it can to optimize the quality of care its patients receive, even if those patients self-
select and receive some care outside [TriState’s] network.”
network referrals, continuity of care, familiarity by physicians with the program’s standards and
requirements, and adherence to those standards and requirements.26
A second aspect of the proposed program contained in the participating provider contract is that
TriState physicians generally agree to refer patients to other TriState network physicians “when
medically appropriate,” with the exception that this does not require the referring physician “to
direct Enrollees to other Network providers from whom the Enrollee does not wish to receive
treatment.” Requiring in-network referrals as the default standard both helps to assure that
referred patients will continue to receive care under the practice standards and requirements of
TriState’s program, and allows TriState to obtain more complete information regarding both the
care provided to those patients and the performance of the treating physicians regarding that
treatment. This information, in turn, facilitates TriState’s monitoring and oversight activities,
and thus achievement of the program’s potential efficiencies in providing coordinated and
appropriate patient care.
The participation agreement also generally obligates each physician member to comply with all
of TriState’s “policies, procedures, rules and regulations,” and specifically identifies a number of
areas where physicians must cooperate with the proposed program. For example, physicians
must cooperate with the proposed program’s requirements regarding utilization management,
patient referrals, pre-authorization of services, use of clinical practice guidelines, provision of
information to TriState for it to effectively monitor physician performance and patient care, and
operation of various other oversight and review aspects of the program. Physicians also agree
that they and their office staff will be trained in, and use, TriState’s health information
technology capabilities.
3. Personal Participation by TriState Member Physicians in
the Development and Operation of the Proposed Program
You state that “every physician who agrees to participate in the clinical integration program will
acknowledge their commitment to fully support the tenets of the program by assisting in the
development of, and practice to, the clinical practice guidelines created in collaboration with
their peers, utilizing the tools embedded in the EHR [electronic health record], and showing
progress towards continual process improvement (‘moving the mean’).” You point out that

Letter to Christi J. Braun
April 13, 2009
Page 12
In addition to its board, TriState has committees responsible for various non-clinical operational functions
27
(Nominating, Bylaws, Communications, and Contracting Finance Administration), as well as committees and sub-
committees for clinical operations. The Clinical Integration Oversight Committee, which is the body most directly
responsible for overall supervision and oversight in this area, includes the chairs of five related sub-committees –
Credentialing, Quality Assurance/Utilization Management, Quality Improvement, Pharmacy Benefits Management,
and Care Coordination.
Physicians may request that they be excused from such activities if they would “constitute a serious hardship
28
or undue burden,” including such justifications as “excessive demands of professional practice, personal or family
health considerations, and service on committees or boards.”
more than forty physicians “currently are participating in formal committees and governance”
regarding TriState. You also state that27
[m]any more physicians, although not formal committee members, have served
on an ad hoc basis, assisting in the review of clinical practice guidelines that
impact their specialty. It is expected that virtually the entire membership, at one
time or another, will participate in the development of some component of the
program. This not only is an expectation of continued membership in [TriState],
but also an affirmation of commitment to clinical integration.
Under the participating provider contract, physician members agree to “cooperate with [TriState]
in the development and implementation of [TriState’s] clinical integration program.” They also
agree to “give due consideration to a request . . . to participate in” such activities as sharing
clinical best-practice ideas and methods; developing, reviewing, or commenting upon clinical
practice guidelines; leading a training session regarding a clinical practice guideline; reviewing
patient files of a Network Practitioner and making recommendations for improvement; and
mentoring a Network Practitioner.28
C. Mechanisms to Assure Physicians’ Compliance
with TriState’s Program Requirements
TriState has established mechanisms to identify physicians who appear to be high-cost providers
or over/under users of resources. As noted previously, to participate in the proposed program,
TriState physicians will be required to execute a “TriState Member Participating Provider
Contract – Clinical Integration,” which identifies the various core aspects of the proposed
program, and evidences the physicians’ agreement to participate in the program and comply with
its requirements. Among those requirements are providing TriState with patient and treatment
information necessary to implement its programs, complying with TriState’s clinical practice
guidelines, assisting TriState in completing quality, safety, and cost assessments, serving on
TriState clinical integration oversight subcommittees, cooperating in the development and
implementation of the program, referring enrollees to other network practitioners, when
medically appropriate, and accepting, being trained on, and using TriState’s information
technology hardware and software, and complying with TriState’s rules and regulations.

Letter to Christi J. Braun
April 13, 2009
Page 13
TriState will monitor each physician’s compliance with its treatment protocols and other practice
requirements. This process will include providing the physician with comparative data relative
to the performance of the other TriState physicians, and using other benchmarks and peer
counseling in order to generate performance improvement. You identify instances where, in the
past, TriState had to deal with physicians or practices that were reluctant to accept certain
monitoring or practice standard requirements, and where TriState was successful in convincing
those physicians to embrace those requirements. Finally, you note that “[w]hen necessary,
however, TriState will remove physicians from its network who refuse to improve (‘culling the
outliers’).”
D. Measurement and Achievement of Efficiencies from the Proposed Program
TriState has not attempted to quantify the potential or likely overall efficiency benefits of its
proposed program, or specified how overall cost or quality efficiency gains will be measured.
However, as evidence of TriState’s capability to achieve measurable efficiency improvements,
you describe the results of a pilot “pay for performance” disease management program for
diabetes that TriState implemented for Washington County Health System, Inc., employees from
2005 through 2008. Using 2005 data as a baseline, TriState reports achieving what appear to be
significant improvements in population clinical results (e.g., hemoglobin A1c values, and
frequency of several indicated tests), and reductions in several measures of use of expensive and
potentially avoidable hospital and other medical resources (population utilization results). The
pilot program was credited with achieving savings calculated at $159,898.00, which were evenly
split between TriState and Washington County Health System, Inc.
Regarding measures of performance for the proposed program, you state that TriState “is in the
very early stages of determining which metrics [of performance] initially will be measured, how
they will be measured, and how this will be communicated to the membership.” You state that
TriState’s proposed program will identify “best practices” and then identify both over-utilization
and under-utilization of services by participating physicians. Through feedback, and promoting
“best practices,” TriState will seek to “move the mean” on key quality indicators, such as
increasing rates of colorectal cancer screening, lowering hemoglobin A1c levels, and improving
lipid profile scores. TriState will monitor the cost of care and use of resources by each physician
and, through use of “report cards,” provide performance feedback to each physician, including
comparisons with both their peers’ performance and regional and national performance
benchmarks. You, however, have not provided details of this feedback process, such as the form
and the frequency of the performance report cards, or how the system of applying remedial
measures to improve performance will operate.

Letter to Christi J. Braun
April 13, 2009
Page 14
See, e.g., Arizona v. Maricopa County Medical Society, 457 U.S. 332 (1982); United States v. Trenton
29
Potteries Co., 273 U.S. 392 (1927).
See United States v. Addyston Pipe & Steel Co., 85 F. 271 (6 Cir. 1898), modified 175 U.S. 211 (1899). This	th	30
analytical approach was subsumed within the analysis that the Commission applied in Polygram Holding, Inc., 5
Trade Reg. Rep. (CCH) ¶ 15,453 (FTC 2003) (available at www.ftc.gov/os/caselist/d9298.shtm, aff’d. sub nom.
Polygram Holding, Inc. v. FTC, 416 F.3d 29 (D.C. Cir. 2005), and North Texas Specialty Physicians, 2005-2 Trade
Cas. (CCH) ¶ 75,032, (available at http://www.ftc.gov/os/adjpro/d9312/index.shtm, aff’d. sub nom. North Texas
Specialty Physicians v. FTC, 528 F.3d 346 (5 Cir. 2008). Likewise, this analytical approach was incorporated by	th
the federal antitrust enforcement agencies in both the Health Care Statements and the Federal Trade Commission
and the U.S. Department of Justice, Antitrust Guidelines for Collaborations Among Competitors (April 2000)
(hereinafter Competitor Collaboration Guidelines) (available at http://www.ftc.gov/os/2000/04/ftcdojguidelines.pdf).
The Health Care Statements, for example, specify how, consistent with general antitrust law principles, physician
network joint ventures’ negotiating and contracting with payers on behalf of their competing physician members will
be analyzed by the antitrust enforcement agencies: “In accord with general antitrust principles, physician network
joint ventures will be analyzed under the rule of reason, and will not be viewed as per se illegal, if the physicians’
integration through the network is likely to produce significant efficiencies that benefit consumers, and any price
agreements (or other agreements that would otherwise be per se illegal) by the network physicians are reasonably
necessary to realize those efficiencies.” Health Care Statements at Statement 8, § B.1. See also Health Care
Statements, Statement 9 at § A. (regarding multi-provider networks). The Competitor Collaboration Guidelines
state (at § 3.2), “If . . . participants in an efficiency-enhancing integration of economic activity enter into an
agreement that is reasonably related to the integration and reasonably necessary to achieve its procompetitive
benefits, the Agencies analyze the agreement under the rule of reason, even if it is of a type that might otherwise be
considered per se illegal.” See also Letter to Clifton E. Johnson, Esquire, and W illiam H. Thompson, Esquire from
David R. Pender, Acting Assistant Director, Bureau of Competition, Federal Trade Commission (March 28, 2006)
(staff advisory opinion concerning Suburban Health Organization, Inc.) (available at
http://www.ftc.gov/os/2006/03/SuburbanHealthOrganizationStaffAdvisoryOpinion03282006.pdf), at n. 14-17, and
accompanying text.
IV. Analysis
A. The Legal Standard
Tristate’s proposed program will involve agreement on the levels of fees to be charged by its
competing physician members for their professional medical services provided under contracts
between TriState and various payers. TriState also will be collectively negotiating on behalf of
its competing physician members the terms of dealing, including price terms, by those
physicians under contracts between TriState and various payers. In the absence of adequate
justification for this activity, such a course of conduct would be summarily condemned as per se
illegal price fixing under long-standing antitrust law standards. Further analysis as to29
competitive effects of this type of conduct is required, however, when it occurs in the context of
a potentially efficiency-enhancing joint venture among otherwise competing market participants,
and the competitive restraints are “ancillary” to the joint venture – i.e., subordinate to the
primary purpose of the legitimate and potentially procompetitive joint venture, and reasonably
necessary to its success and achievement of the efficiencies it makes possible. We address30
TriState’s proposed program under this standard for “clinical integration.”

Letter to Christi J. Braun
April 13, 2009
Page 15
See Health Care Statements at Statement 8, § A.4. (Sharing of substantial financial risk “normally is a clear
31
and reliable indicator that a physician network involves sufficient integration by its physician participants to achieve
significant efficiencies. Risk sharing provides incentives for the physicians to cooperate in controlling costs and
improving quality by managing the provision of services by network physicians.”); Statement 8, § B.1. (“W here the
participants in a physician network joint venture have agreed to share substantial financial risk . . . their risk-sharing
arrangement generally establishes both an overall efficiency goal for the venture and the incentives for the
physicians to meet that goal.”).
Health Care Statements at Statement 8, § B.1. The Health Care Statements emphasize, however, that these
32
are only illustrative examples: they “are not . . . the only types of arrangements that can evidence sufficient
integration to warrant rule of reason analysis [also assuming, of course, that the agreements eliminating competition
among the participants in the arrangement are reasonably necessary to achieve the arrangement’s potential
efficiencies], and the Agencies will consider other arrangements that also may evidence such integration.”
B. Integration and Likelihood of Achieving Significant
Efficiencies Through TriState’s Proposed Program
The Health Care Statements address certain ways in which physician or other health care
networks may be able to evidence that they involve sufficient integration among the participants
so as to be likely to produce significant efficiencies. One type of arrangement through which
integration may occur involves creation of a high degree of interdependence among the
network’s participants in the provision of care to patients served by the provider network. In
networks involving significant clinical integration, the antitrust inquiry and analysis initially
seek to ascertain whether the program’s structure and operation have the capability, and the
participants have the necessary motivation, to achieve the program’s intended efficiency goals in
the absence, for example, of the financial incentives and constraints typically provided by
arrangements that involve the sharing of substantial financial risk by the network’s participants.31
In describing networks whose members clinically integrate, the Health Care Statements note that
such integration can be demonstrated:
by the network implementing an active and ongoing program to evaluate
and modify practice patterns by the network’s physician participants and
create a high degree of interdependence and cooperation among the
physicians to control costs and ensure quality. This program may include:
(1) establishing mechanisms to monitor and control utilization of health
care services that are designed to control costs and assure quality of care;
(2) selectively choosing network physicians who are likely to further these
efficiency objectives; and (3) the significant investment of capital, both
monetary and human, in the necessary infrastructure and capability to
realize the claimed efficiencies.32

Letter to Christi J. Braun
April 13, 2009
Page 16
Health Care Statements at Statement 8, § B.1. See also Statement 9, § B.2.c.
33
Most multiprovider networks will contract with some, but not all, providers in an area. Such
selective contracting may be a method through which networks limit their provider panels in an
effort to achieve quality and cost-containment goals, and thus enhance their ability to compete
against other networks. One reason often advanced for selective contracting is to ensure that the
network can direct a sufficient patient volume to its providers to justify . . . adherence to strict
quality controls by the providers. It may also help the network create a favorable market
reputation based on careful selection of high quality, cost-effective providers. In addition,
selective contracting may be procompetitive by giving non-participant providers an incentive to
form competing networks.
Health Care Statements at Statement 8, § B.1.
34
It is not clear whether other physicians practicing in TriState’s service area, but who currently are neither
35
TriState members nor contracting physicians, are also being given the opportunity to join TriState and participate in
the proposed program.
1. Selective Participation of Network Physicians
in the Proposed Program
One aspect of provider network programs that is likely to affect their success in
achieving integrative efficiencies is “selectively choosing network physicians who are
likely to further . . . [the program’s] efficiency objectives.” These physicians must33
agree to certain practice and business constraints, as well as to be subject to a variety
of monitoring, oversight, and remedial activities by the network, in order to assure that the
anticipated integration and efficiencies of the program can be achieved. There may exist a
tension between a network arrangement’s desire to include all interested or eligible providers,
and its need to restrict participation only to those who are fully committed to accepting the
significant limitations on their independent decision making that are necessary if the network is
to succeed in controlling costs and improving quality. Moreover, the larger a network becomes,
the more difficult it may be to establish the “high degree of interdependence and cooperation
among the physicians to control costs and ensure quality” that is the hallmark of clinical34
integration.
TriState has stated that participation in the proposed program is open to all current members who
agree to the proposed program’s requirements and to all contracting physicians who become
TriState members and likewise agree to the program’s requirements. Thus, TriState is not35
initially being “selective” by excluding in any significant way local area providers from
eligibility to participate in the proposed program. TriState’s proposed program will, however,
impose a number of requirements that are likely to discourage providers not fully committed to
the program from seeking to join it, and thus assure that those who do choose to participate will
be fully committed to its goals and requirements.

Letter to Christi J. Braun
April 13, 2009
Page 17
See Health Care Statements at Statement 8 at § B.1.; Statement 9 at § A. (referencing Statement 8 at § B.1.).
36
W hile not specifically addressed in the Health Care Statements, nor readily quantifiable, we nevertheless are
37
aware that many physicians, as responsible professionals, may be self-motivated to enthusiastically participate in
innovative programs aimed at improving quality and reducing costs for their patients. This type of incentive for
efficiency, however, may not apply or apply equally to all physicians. This particularly may be the case where the
prevailing method of payment for physicians’ services is on a fee-for-service basis, which creates financial
incentives to provide more services, rather than rewarding the more efficient and effective provision of services.
Most important among the requirements of participation is that each physician must become a
full member of TriState, and execute a participating provider contract, which obligates the
physician to participate and cooperate in all of the various efficiency-enhancing aspects of the
proposed program. With regard to membership, TriState is eliminating the category of
“contracting physicians,” whereby physicians previously could provide, and be paid for, services
under TriState contracts, without becoming full members of the organization. Thus, to
participate in the proposed program, physicians must commit to membership in TriState, incur
the financial and other obligations of membership, sign the new provider participation contract
for the program, and accept the obligations that agreement entails. Concurrently, TriState is
restricting the circumstances under which physicians subsequently may join TriState and
participate in the proposed program. These actions appear to be intended, and likely, to require
both current physician members and contracting physicians to assess their willingness to commit
to the requirements of the proposed program at this time. This, in turn, should result in TriState
having a provider panel that will largely be “closed,” and which will include only physicians
who have fully and knowingly committed to both the organization and its proposed program.
2. Physician Investment of Monetary and Human Capital
in the Proposed Program
The Health Care Statements note that “the significant investment of capital, both monetary and
human, in the necessary infrastructure and capability to realize the claimed efficiencies” of a
network joint venture may help evidence that it involves substantial integration that is likely to
result in significant efficiencies. Such “investment” by participants can evidence their stake in,36
and degree of commitment to, the successful operation of the venture, and therefore support the
likelihood of the program achieving efficiencies as a result of the participants’ joint activity
through the enterprise. While not necessarily sufficient in itself, substantial financial or other
investment by participants in a joint venture supports the view that the participants are likely to
be motivated to work toward the venture’s success in the market – which, in this case, requires it
to succeed in improving the quality, and controlling the costs, of the health care services
provided pursuant to the proposed program to their patients who are enrolled in the program.37
As mentioned earlier, physicians are required to pay an initial “joining fee” upon
becoming members of TriState. Most of TriState’s physician members presumably paid this fee
around the time of TriState’s establishment in the mid-1990s, with those joining since then
paying the fee upon becoming new members. Physicians that previously were contracted

Letter to Christi J. Braun
April 13, 2009
Page 18
W hile no such additional fees currently are contemplated, TriState’s board is empowered to levy additional
38
assessments on the membership, if it deems such action to be necessary.
physicians, rather than members, and who accept TriState’s offer to now become members, also
will be required to pay this fee as a condition of membership. There will, however, be no
additional direct financial contributions or investments required of TriState members in order to
fund or participate in the proposed program. While you state that “[t]he program’s success will38
require a portion of the members’ capital contributions to finance the infrastructure and HIT
[health information technology],” it is difficult to characterize using a portion of the initial joining
fee paid by most TriState members many years ago as a significant financial investment in the
proposed program, or as one that is likely to instill in long-time members a particular sense of
commitment to the new proposed program’s success. For new member physicians of TriState,
however, the joining fee of $2,500 may provide at least some sense of financial investment in the
proposed program, and a consequent degree of “buy-in” by them to the program’s success.
In addition, you state that those physicians – for example, previously contracted physicians who
newly become members of TriState in order to participate in the proposed program, likely will
need to invest an estimated $2,600 in computer and related equipment in order to participate in
the program. Finally, all participating physicians and their office staffs will be required to devote
time to being trained in the program’s operation, particularly those aspects related to use of its
health information technology and electronic health records. You estimate that this will equate to
a cost of about $2,500 in physician billing and office staff time for the average two-physician
office.
These combined financial investments in the program – for joining TriState, for purchase of
computer and related equipment, and for lost billing and staff time to receive training for the
program – while not trivial, nevertheless appear relatively modest for many physician practices,
particularly for the substantial majority of physicians who previously paid the $2,500 TriState
joining fee, and may also have acquired the computer systems needed for the proposed program
as part of their participation in TriState’s previously existing programs. For physicians newly
joining TriState to participate in the proposed program, the total investment, which by your
estimate could be as much as $7,600, is a more substantial sum. Overall, in our opinion, while
this financial investment may provide some sense of identification with TriState and its proposed
program, it appears unlikely, by itself, to be sufficiently great to strongly motivate the majority of
TriState physicians to work toward the success of the program.
However, financial investment is not the only form of investment in the proposed program by
TriState’s physician members. You state that “[t]he [proposed] program’s success will also
require the physician participants’ to invest significant amounts of time and effort serving on
TriState’s formal and ad hoc committees, implementing guidelines and protocols in their
practices, integrating medical management into their practices, collaborating in the care of their
patients, and working together to achieve their quality and cost benchmarks.” As mentioned
earlier, a substantial number of TriState physicians already have contributed their time and effort

Letter to Christi J. Braun
April 13, 2009
Page 19
Regarding what the Agencies refer to as the necessary infrastructure and capability to achieve significant
39
integrative efficiencies, knowledgeable commentators have emphasized the importance of systematized approaches
– sometimes referred to as “organized processes” – in achieving the potential efficiency benefits of clinical
integration arrangements among otherwise independently practicing physicians. See, e.g., L. P. Casalino, The
Federal Trade Commission, Clinical Integration, and the Organization of Physician Practice, 31 J. of Health
Politics, Policy and Law 569 at 580-81 (June 2006) (“[T]here is ample evidence both that the use by physician
groups of organized processes to improve quality is effective and that it is uncommon (citations omitted). The
processes suggested by the FTC clinical integration policy are consistent with the literature on quality improve-
ment . . . .”); L. P. Casalino, R. R. Gillies, et al., External Incentives, Information Technology, and Organized
Processes to Improve Health Care Quality for Patients with Chronic Diseases, 289 JAM A 434 (January 22/29,
2003); and S. M. Shortell and L. P. Casalino, Health Care Reform Requires Accountable Care Systems, 300 JAMA
95 (July 2, 2008) (an “accountable care system” is “an entity that can implement organized processes for improving
the quality and controlling the costs of care and be held accountable for the results.”).
in developing various aspects of the proposed program and in serving on various formal and ad
hoc committees. Moreover, you state that you expect that most physicians participating in the
program will be called upon and expected, at one time or another, to contribute to the program’s
operation and success by doing any of a number of tasks related to the design and successful
implementation of the program’s specific aspects, and this expectation is specified in the
Participating Provider Contract.
In our view, and as described above, a significant number of TriState physicians appear to have
made, and likely will continue to make, non-trivial investments of time and effort in the
development and ongoing operation of TriState’s proposed program. In addition to many
physicians participating in various committees and projects to develop the proposed program,
most or all physicians will be required to incur significant opportunity costs in order to devote the
necessary time for themselves and their staffs to be trained in use of the health information
technology and electronic health records components of the program. TriState physicians also
will be making some degree of financial investment in the program, particularly those physicians
who newly become members of TriState, including previously contracting physicians who wish
to participate in the proposed program. These various forms of “investment” by physicians in the
proposed program together appear to evidence a substantial degree of commitment to the
program’s success. Likewise, Washington County Hospital Association will be contributing
significantly to the proposed program through having hospital and hospital affiliate employed
staff participate in various committees and provide their expertise in a variety of and positions,
and through the matching of physicians’ $2,500 joining fee for TriState membership.
3. Infrastructure and Program Capability for Integrating
the Provision of Care and Achieving Efficiencies39
TriState appears to have included in its proposed program a variety of structural and operational
aspects that seem likely to result in significantly increased interaction and cooperation among its
physician members in the treatment of patients covered under the program. Among these are:
(a) establishing a largely closed panel of providers committed to practicing consistently with
evidence-based medicine standards and clinical guidelines developed or tailored by the program’s

Letter to Christi J. Braun
April 13, 2009
Page 20
Payers frequently seek to provide enrollees with access to a broad network of providers in response to
40
consumer backlash against past restrictive provider panels under some managed care programs.
participants; (b) maintaining continuity and coordination of care through a within-network
referral policy; (c) requiring use of health information technology, including electronic health
records, to coordinate care, effectively communicate among network providers, eliminate
unnecessary duplication of tests, and collect performance data; (d) establishing mechanisms to
collect and evaluate treatment and performance data, including data on appropriate use of health
care resources; (e) requiring broad participation of the program’s physicians in various aspects of
the program’s development, implementation, and ongoing operation; and (f) establishing
procedures and mechanisms, including various committees that include participating physicians,
to provide feedback on both individual and group performance, address performance deficiencies
and, if necessary, impose sanctions for physicians whose performance is chronically deficient
regarding program requirements and standards.
One potential area of concern regarding the program’s ability to provide integrated care and
achieve potential efficiencies, which you acknowledge, is the possibility of “leakage” of patients
to non-TriState providers where a contracting employer or other payer allows enrollees to seek
care out of network – for example by separately contracting for additional access to a broader
network, such as InforMed’s Community Health Partners network. In addition to removing40
patients from TriState’s integrated care systems, this may create gaps in the information available
to TriState regarding the patients’ treatment and health status. These types of potential gaps in
care coordination and information for the proposed program, while perhaps unavoidable,
nevertheless could prove to be problematic for TriState in achieving its integration and efficiency
goals. TriState states that it intends to seek a tiering system in its payer contracts for the proposed
program, providing financial incentives in the form of lower deductibles and copayments for
enrollees who stay within the TriState network for their treatment. TriState also has arranged
with InforMed to obtain access to data regarding enrollees’ use of services from other
Community Health Partners network providers, and hopes to do this with other contracting
payers, such as CareFirst Blue Cross Blue Shield, as well. Whether patient leakage outside the
TriState network proves to be a significant problem for the proposed program, whether these
remedial approaches can and will be implemented effectively, and whether they will prove
adequate to address the problem, all are questions that cannot be answered with any confidence at
this time.
4. Measurement and Evaluation of Performance Results
The proposed program identifies a number of measures of physician performance, such as
frequency of adherence to clinical practice guidelines, and both patient status and physician
performance measures. But other than to generally state that individual and group performance
on various as-yet-undetermined measures will be compared to peer, regional, and national
benchmarks, you have provided very little information concerning how success or failure of the

Letter to Christi J. Braun
April 13, 2009
Page 21
The hospital has matched physicians’ initial membership fee for joining TriState since TriState’s inception,
41
and continues to do so for new physician members. Several physicians employed by the hospital also serve in
leadership positions in TriState, and several hospital and Antietam Health Services directors and managers serve on
TriState committees.
proposed program will be measured over time on a more macro level, such as in terms of cost or
utilization of services by covered populations, or improvements in health status or outcomes.
TriState’s pilot pay-for-performance program for diabetes treatment involving Washington
County Health System, Inc., employees, which appears to have generated significant positive
results – including financial savings from reduced hospital admissions and use resulting from the
interventions – suggests that TriState already has some capability to measure and evaluate its and
its members’ performance. The information you have provided indicates that TriState is in the
process of further developing this capability. Moreover, it seems likely that, as a business
necessity, TriState will have to be able to provide this type of performance outcome data over
time and on a broader scale in order to convince employers and other payers of the potential
benefits of contracting with TriState for the program. Thus, we are reasonably confident that
TriState is or will be capable of implementing, and will have the incentive to implement,
appropriate mechanisms to measure and evaluate its and its participants’ performance under the
proposed program.
We also note that TriState has expressed its intention to further develop a pay-for-performance
program regarding its services, although that future aspect of the program will require a period of
time for accumulation of baseline data, and is not formally addressed in this opinion letter.
5. Effect of Washington County Hospital Association’s Involvement on
the Proposed Program’s Ability and Likelihood of Achieving
Significant Efficiencies
As noted previously, TriState is a physician-hospital organization that has as the sole member of
one class of its membership Washington County Hospital Association, which operates the
Washington County Hospital. Washington County Hospital Association has significant
representation on the TriState board, and its representatives serve in numerous positions within
the TriState organization. The potential effects of Washington County Hospital Association’s
involvement (and, indirectly, that of its related organizations) in the proposed program on the
likelihood of its achieving significant efficiencies are not clear. On the one hand the hospital has
considerable resources, including financial contributions, technical support, and infrastructure,
that it has made and will continue to make available to the program. These contributions to the41
joint venture by the hospital may help the proposed program to operate more effectively and may
even have been essential for the program’s development and establishment in the first place. The
hospital’s parent organization – Washington County Health System, Inc. – also is the largest
employer in TriState’s primary service area, and its employee benefits program is the potential
source of the largest number of covered lives for the proposed program. Washington County

Letter to Christi J. Braun
April 13, 2009
Page 22
See also, e.g., L. R. Burns and R. W . Muller, Hospital-Physician Collaboration: Landscape of Economic
42
Integration and Impact on Clinical Integration, 86 The Milbank Quarterly 375-434 (2008) (discussing the differing
and only partially overlapping goals of physicians and hospitals, and the implications for hospital-physician
relationships). See also A. E. Cuellar and P. J. Gertler, “Strategic Integration of Hospitals and Physicians” (May 1,
2002) (available at http://faculty.haas.berkeley.edu/gertler/working_papers/hospital_VI_5_10_02.pdf) (paper
examining whether efforts at hospital-physician integration leads to efficiency gains or is a strategy for the
participants to improve bargaining power, and thereby increase prices.).
This holds true where the price paid exceeds the cost of providing the service.
43
Moreover, under TriState’s bylaws, the board requires a majority vote of both the Class 1 Physician member
44
representatives and the Class 2 hospital representatives in order to take any action. Thus, it does not appear that the
(continued...)
Health System, Inc.’s related health care operations, such as lab and pharmacy, potentially also
are positioned for effective use as part of the integration of care to enrollees under the proposed
program.
As you acknowledge in your submission, however, there also is a potential conflict of interest
between the hospital and the proposed program. Under most current reimbursement systems,42
hospitals, as sellers of their services, often have an incentive to admit patients and fill available
beds with paying customers, and to have them use diagnostic and treatment services for which the
hospital receives additional payment. Due to the unique rate regulatory system in Maryland,43
however, although Washington County Hospital Association has an economic incentive to ensure
that incremental admissions come to its hospital, it does not appear to have the incentive, and may
even have a disincentive, to provide diagnostic and treatment services or lengths of stay in excess
of the regulated reimbursement per discharge set by the state. Under these circumstances,
Washington County Hospital Association’s financial incentives as a seller of services potentially
could conflict with the proposed program’s goal of rationalizing the use of services provided to
patients, including keeping them out of the hospital through disease management, use of
preventive services, and adherence to treatment protocols, or even providing certain services to
admitted patients.
Any financial incentive of the hospital to increase admissions, however, may be tempered by the
fact that Washington County Health System, Inc., as the area’s largest employer and TriState’s
largest customer, pays for all the hospital services used by its employees and their dependents
covered under its employee benefits program. Thus, in its role as a purchaser and payer of
services on behalf of its employees, Washington County Health System, Inc., has a financial
incentive to rationalize and more efficiently provide health care services, improve quality, and
control its program costs, and to help TriState succeed in its efforts to do so. In sum, it is difficult
to conclude one way or the other as to whether Washington County Hospital Association’s and its
affiliates’ involvement in TriState’s operation is likely to enhance, undermine, or have no net
effect on the ability and likelihood of TriState’s achieving significant efficiencies as a result of
the proposed program.44

Letter to Christi J. Braun
April 13, 2009
Page 23
(...continued)44
hospital’s involvement in TriState’s governance could result in TriState being forced to adopt policies or undertake
activities that would benefit the hospital at the expense of successful operation of the proposed program.
This conclusion, of course, represents only our best prospective assessment of the proposed program’s
45
potential. W hether TriState’s program in fact will create substantial integration among its physician participants,
whether the program is capable of achieving significant efficiencies as a result of that integration, and whether the
program’s participants will bring the requisite commitment and rigor to its implementation so as to achieve that
integration and resulting efficiencies, can only be determined by TriState’s actual performance over time. W hile the
potential benefits of a robust program appear intuitively obvious, the expected results of such efforts may not
necessarily occur. See, e.g., D. Peikes, et al., “Effects of Coordination on Hospitalization, Quality of Care, and
Health Care Expenditures Among Medicare Beneficiaries,” 301 JAMA 603 (Feb. 11, 2009) (finding no reduction in
hospitalizations or other cost benefits, and only modest or no quality improvements, resulting from care coordination
programs in fifteen Medicare demonstration projects); C. L. Damberg et al., “Taking Stock of Pay-For-Performance:
A Candid Assessment From the Front Lines,” 28 Health Affairs 517 (March/April 2009) (evaluation after three years
of the nation’s largest pay-for-performance program, by the Integrated Healthcare Association in California, found
that, despite physician organizations reporting “increased physician-level performance feedback and accountability,
speeded up information technology adoption, and sharpened . . . organizational focus and support for improvement
in response to P4P,” investment in the program “had not translated into breakthrough quality improvements.”).
Moreover, while some components of clinical integration programs may have been the subject of study in particular
contexts, we are unaware of any significant body of the technical literature that has looked at, much less
conclusively demonstrated in any generalizable way, that physician or provider networks undertaking such programs
can achieve significant efficiencies in terms of either quality improvement or cost containment, or that have
identified the conditions or circumstances under which they are likely to do so.
6. Conclusion Regarding Integration and Potential to
Achieve Significant Efficiencies
Overall, it appears that TriState’s proposed program is both intended and structured so as to be
likely to create substantial integration among its participating providers, particularly its member
physicians, in the provision of medical and other health care services. Operation of the program,
as proposed, will involve a significant degree of participation by, and interaction among, many or
most of the physician members of TriState regarding the services provided by each member under
the program, and the group as a whole. Member physicians will no longer provide their
professional services without a significant amount of reporting, observation, oversight, review,
evaluation, and, if appropriate, intervention by their peers to assure that practices conform with
evidence-based medicine “best practices.” This integration among the participating physicians in
the program, in turn, appears to have the potential to result in significant efficiencies, both in
terms of cost and quality, in the delivery of medical services to patients covered under payer
contracts for the program. Moreover, it appears that achievement of those efficiencies, if it45
occurs, will be the result of the joint activities and infrastructure that TriState makes possible, and
which could not occur absent the TriState participants’ acting jointly and integrating their
provision of services through the proposed program.

Letter to Christi J. Braun
April 13, 2009
Page 24
Citing Polk Bros., Inc. v. Forest City Enterprises, Inc, 776 F.2d 185, 189 (7 Cir. 1985).	th	46
C. Need and Justification for Joint Pricing and
Collective Negotiation of Payer Contracts
We have concluded, as discussed above, that TriState’s proposed program appears likely to
involve substantial integration by its physician participants that appears to have the potential to
achieve significant efficiencies in the physicians’ performance and the care of patients covered by
the program. We now consider whether the joint pricing of its physician members’ services and
collective negotiation of contracts with payers, are “ancillary” to – that is, related and subordinate
to, and reasonably necessary to further – that integration and the proposed program’s ability to
achieve integrative efficiencies. Accordingly, we turn to TriState’s explanations of why it
believes that its program’s competitive restraints are ancillary to the integration and achievement
of efficiencies, and therefore warrant a more detailed inquiry into their likely competitive effects
under the antitrust rule of reason.
1. TriState’s Proffered Justifications for Joint Contracting
You state TriState’s primary argument as to the need to jointly contract with payers for the
proposed program as follows:
For TriState to integrate its members’ services with the quality improvement
measures and medical management, it is important for all TriState physicians to
participate, and be included, in the contracted network. . . . The success of
Tristate’s program depends significantly on its physicians participating in all its
contracts. The only way to ensure that all TriState physicians participate in all
TriState payer contracts is for TriState to negotiate payer contracts for its complete
network and prohibit its members from “opting out” of its contracts. No other
contracting methodology will ensure full participation.
You go on to identify several reasons why you believe that full participation of all TriState
physicians in all payer contracts is reasonably necessary to the program’s success, and how joint
contracting on behalf of all physicians for all contracts will be “part of a larger endeavor whose
success they [the restraint(s)] promote.”46
First, you argue that, in order to effectively integrate the program’s quality improvement
initiatives and medical management services into the physicians’ practices, it is necessary to
maximize the number of patients in each physician’s practice subject to those practice
requirements.
Each . . . patient is an opportunity for the physicians to collaboratively treat a
patient, integrate guidelines and protocols into their practices, use the Clinical
Claims Chart, and incorporate medical management into their practices. The more

Letter to Christi J. Braun
April 13, 2009
Page 25
In this regard, as noted previously, you have stated that TriState intends to seek to have included in all payer
47
contracts a tiered coverage provision that rewards patients in terms of lower deductibles and co-payments for staying
within the TriState provider network for their care.
TriState physicians engage in integrative activities, the more interdependent they
become, increasing the likelihood they will achieve the anticipated cost and quality
efficiencies.
Thus, in addition to assuring that more patients will be subject to the potential quality and
efficiency benefits of the program than would be the case if not every physician was a part of
every payer contract, you assert that maximizing the physicians’ activity under the constraints of
the program will accustom the physicians to the program’s system of integrating care, and
maximize its effective operation.
Next, you assert that having all physicians in the program for all payer contracts and enrollees
will reinforce the in-network referral requirement, again maximizing the potential effectiveness of
the program, both in the provision of services and in the program’s ability to obtain data and
monitor both physician performance and patient treatment and status. “[E]ach time a TriState
patient goes out of network, TriState loses an opportunity to gather information for the Clinical
Claims Chart, to ensure [that] physicians have an accurate record of care, to improve the health of
that patient, and to control the costs of that patient’s care.”47
You then argue that having all physicians in all payer contracts will provide greater incentive for
those participating physicians to contribute their time and effort in developing and implementing
the program than would be the case if physicians had less involvement due to participation in
only a subset of contracts for the program. You state that “[w]ithout the physicians’ investment
of time in developing and implementing the clinical integration strategy, there will be no
integrated product for TriState to sell,” and note that physician participation in the program
involves a range of activities such as “reviewing guidelines, developing protocols, teaching their
peers about the guidelines and protocols, monitoring their peers’ quality, developing medical
management policies, reviewing prescription drug literature, or developing and maintaining a
drug formulary.” We understand this argument, in essence, to be that if physicians are not
required to participate in all payer contracts, which will result from joint contracting with payers,
their patient volume under the program may be too small for them to care sufficiently and devote
the necessary time and effort toward its operation and success.
Finally, you make some more purely business-related justifications for joint contracting. You
state that joint contracting allows TriState to offer a network of providers that is readily
identifiable by payers and their subscribers in seeking services covered by the program. It also
provides transaction costs efficiencies for payers in avoiding the need for individual provider
contracts with each physician, as well as reducing TriState’s administrative costs and burden,
which would be considerably greater if different subsets of its physicians were participating under
each payer contract.

Letter to Christi J. Braun
April 13, 2009
Page 26
As likely would occur if TriState, for example, used a “messenger” arrangement to convey each payer offer to
48
it physician members, who then individually would decide whether or not to participate in each payer contract.
2. Analysis of TriState’s Ancillarity Arguments
TriState’s primary argument of the reasonable necessity of joint contracting on behalf of all of its
physicians, in essence, is two sides of the same coin: that not having all member physicians
participating under all contracts would seriously undermine the ability of the program to function
efficiently and achieve its hoped-for benefits; and that the various aspects of the proposed
program, which require physicians to cooperate and interact in both their development and
implementation, will be far more effective if all physicians are maximally involved because,
through joint contracting, they are participating in all payer contracts under the program.
Without joint contracting, which will assure, and reinforce, TriState’s membership requirement,
that all physicians participate under all contracts, TriState potentially could have different
provider panels representing a subset of its membership for each payer contract. This, in turn,48
could make it difficult to effectively maintain the in-network referral requirement, since referring
physicians might have to use different physicians for referrals under each contract. Likewise,
with varying provider panels for each contract, the ability of TriState to coordinate the care
provided to patients, and its ability to obtain information on both patients and providers would be
more difficult and the results less robust. Reduced information on provider behavior could
interfere with the program’s evaluation of, and feedback regarding, physicians’ practices in
treating patients, again undermining a key component of the program’s effort to improve
efficiency. Thus, while it might be theoretically possible to have a program without joint
contracting on behalf of all physicians in the program, such an approach appears likely to be far
more difficult, and potentially could compromise TriState’s ability to effectively integrate its
physician members’ provision of care, and to achieve the program’s potential efficiencies.
On the positive side, uniform participation will facilitate the program’s in-network referral
requirement, which is central to the program’s success in rationalizing and effectively providing
evidence-based care to the program’s enrollees. With a stable, defined network of participating
providers, physicians will easily be able to make referrals to other network physicians, knowing
that they also will be participating in the provision of coordinated care under the program’s
strictures. Likewise, maintaining a pre-set network makes it easier to assure that data and
information on patient treatment and provider activity and use of resources – necessary for
monitoring patient status and physician behavior, as well as the program’s achievement of its
efficiency goals – is available to the greatest extent possible. As noted above, achieving these
operational necessities would be far more difficult if different physicians were participating in
different payer contracts, referral patterns had to be adjusted accordingly to keep patients within
the applicable network, and information on patient treatments and provider behavior were less
uniformly available.

Letter to Christi J. Braun
April 13, 2009
Page 27
See, e.g., Statement 8 of the Health Care Statements at § B.2. (observing that while a physician network
49
generally is likely to achieve more significant efficiencies from the integration of its participants, “the Agencies will
consider [as efficiencies] a broad range of possible cost savings, including . . . economies of scale, and reduced
administrative or transaction costs.”). However, such “efficiencies,” in the absence of integration, occur in any
cartel, and alone do not justify rule-of-reason treatment of a price agreement. See Competitor Collaboration
Guidelines at § 3.2 (“The mere coordination of decisions on price, output, customers, territories, and the like is not
integration, and cost savings without integration are not a basis for avoiding per se condemnation.”).
Having complete provider participation as a result of joint contracting on their behalf also will
maximize the number of patients each physician has that are subject to the program’s various
efficiency-enhancing mechanisms, thereby increasing the physicians’ familiarity with, acceptance
of, and efficient participation in those program aspects and requirements. In essence, the more
physicians participate in the program, the faster they are likely to climb the learning curve in
effectively treating patients under the clinical integration system and its required components.
Guaranteed uniform participation by all physicians under all contracts, through joint contracting,
also is likely to contribute to the physicians’ commitment to the success of the program. The
greater the number of patients that a physician has who are under the proposed program, the more
he or she is likely to care about its operation and success, and the greater is likely to be the
physician’s willingness to invest the necessary time and effort in the various aspects of its
operation. Joint contracting on behalf of all TriState physicians will maximize each physician’s
opportunities to treat patients who are covered by the program which, in turn, should make them
more committed to the program’s success.
Having a stable provider network for all contracts also appears capable of enhancing TriState’s
effective business operations by helping to “brand” its product, and identify the program as a
single entity with a stable provider panel and a reputation regarding its product, much like the
way more highly integrated clinics are identified in the public’s mind.
Joint contracting also can reduce administrative costs for the program, and reduce transaction
costs for both its members and payers with which it contracts. Administrative and transaction
costs efficiencies, by themselves, are unlikely to be of sufficient magnitude to offset the loss of
competition from joint negotiation of prices by physicians in a provider network. Nevertheless,
these types of efficiencies may be real, and are cognizable under the antitrust laws in the context
of an integrated joint venture.49
We agree that having a predetermined, identified provider network for all services provided
pursuant to contracts with payers for the proposed program appears likely to promote the
program’s intended integration of its physician members’ provision of care, and the efficient
operation of the various aspects of the proposed program. It also may help in the effective
branding and marketing of the program. Increased physician participation and interaction, in
turn, should further TriState’s ability to achieve the program’s anticipated efficiency benefits.
Moreover, without such joint contracting on behalf of all member physicians, effective operation
of TriState’s proposed program is likely to be far more difficult and its effectiveness could well

Letter to Christi J. Braun
April 13, 2009
Page 28
TriState’s justification for what otherwise would appear to be an anticompetitive and unlawful price
50
agreement among its physician members rests on the proposed program’s procompetitive potential to achieve
efficiency benefits as a result of the participants’ integration through the program. If, however, the proposed
program ultimately were to fail to achieve significant integrative efficiencies, the anticompetitive effects of the
program would likely dominate. A prospective assessment of the program thus does not ensure its legality for all
time, and the Competitor Collaboration Guidelines make clear that assessment of the competitive effects of a joint
venture is an ongoing process that occurs over the life of the venture:
The competitive effects of a relevant agreement may change over time . . . . The Agencies assess the
competitive effects of a relevant agreement as of the time of possible harm to competition, whether at
formation of the collaboration or at a later time, as appropriate. However, an assessment after a
collaboration has been formed is sensitive to the reasonable expectations of participants whose significant
sunk cost investments in reliance on the relevant agreement were made before it became anticompetitive.
Competitor Collaboration Guidelines at § 2.4.
Thus, absent the realization of significant efficiencies at some point, it might be difficult to sustain the justification
that the arrangement’s competitive restraints are necessary to achieve such efficiencies, and that the arrangement,
overall, is not anticompetitive as a result of those restraints. W e are not in a position to specify prospectively when
those efficiencies must be achieved, or what level of efficiencies would be “significant.” The best judges of that are
likely to be TriState’s customers “voting with their feet” if the program fails to achieve acceptable results within
what they view as a reasonable period of time. If payers at some future date conclude that the program does not
provide sufficient value, and decline to contract for it with TriState, this might signal the need for a prospective
reassessment of the overall competitive effects of the program. However, absent the exercise of market power by
the program or its participants, the market itself is likely to effectively address any competitive concerns that such a
situation might raise.
be compromised. Overall, such joint contracting appears to be subordinate to TriState’s
legitimate effort to improve efficiency and quality in the delivery of healthcare services through
integration by its participants. We therefore conclude that, on balance, joint contracting with
payers by TriState on behalf of its entire participating physician membership is an ancillary
restraint – one that is subordinate to, and reasonably necessary to further or make more effective
the potentially efficiency-enhancing and procompetitive integration that the proposed program
represents.50
D. Likely Competitive Effects of TriState’s Proposed Program
1. TriState’s Position and Available Alternatives in the Market
We have not done an investigation or formal market analysis to define relevant geographic and
product markets within which TriState and its physician and hospital members compete. Rather,
our consideration of the likelihood that TriState would be capable of exercising market power in
the sale of those services under the proposed program, or that the proposed program otherwise

Letter to Christi J. Braun
April 13, 2009
Page 29
The Health Care Statements note that “a variety of factors may tend to corroborate a network’s
51
anticompetitive nature, including: statements evidencing anticompetitive purpose; a recent history of
anticompetitive behavior or collusion in the market, including efforts to obstruct or undermine the development of
managed care; obvious anticompetitive structure of the network (e.g., a network comprising a very high percentage
of local area physicians, whose participation in the network is exclusive, without any plausible business or efficiency
justification); the absence of any mechanisms with the potential for generating significant efficiencies or otherwise
increasing competition through the network; the presence of anticompetitive collateral agreements; and the absence
of mechanisms to prevent the network’s operation from having anticompetitive spillover effects outside the
network.” Health Care Statements at Statement 8, § B.1.
TriState physicians represent half or more of the physicians with admitting privileges in anesthesiology,
52
cardiology, family medicine, internal medicine, nuclear medicine, obstetrics/gynecology, oral and maxillofacial
surgery, orthopedics, pediatrics, physical medicine, plastic surgery, podiatry, radiation oncology, and radiology.
TriState physicians comprise 100 percent of physicians with privileges at the hospital in the specialties of allergy,
endocrinology, gastroenterology, infectious disease, neurosurgery, hematology/oncology, otolaryngology, pain
management, and pathology. TriState notes that in many specialties the high percentages are the result of there
being very few practitioners in the specialty that practice in the area, so that a relatively small number of TriState
member physicians nevertheless may represent a significant percentage of area physicians in a particular specialty.
A similar concern about the network including relatively high percentages of area physicians in certain
53
specialties was raised in the MedSouth advisory opinion letter. See Letter from Jeffrey W . Brennan, Assistant
Director, Health Care Services and Products, Bureau of Competition, Federal Trade Commission, to John J. Miles at
6 (Feb. 19, 2002), available at http://www.ftc.gov/bc/adops/medsouth.shtm.
might result in anticompetitive effects, is based solely on the information that you have provided51
to us.
a. Physician Services
You state that TriState currently has 212 physician members who are expected to participate in
the proposed program. While you represent that there are about 1,200 physicians in TriState’s
secondary service area, TriState physicians apparently represent a much higher percentage of the
physicians within its primary service area – essentially Washington County, Maryland, which
accounts for over 80 percent of admissions at Washington County Hospital. In fact, you state that
TriState physicians comprise 64 percent of Washington County Hospital’s medical staff, and half
or more of the physicians in a large number of specialties in TriState’s and the hospital’s primary
service area that have admitting privileges at the hospital. Thus, TriState, as a combination of a52
substantial portion of the physicians in Washington County with privileges at the only hospital in
that county, appears to have the potential to exercise market power in the sale of its member
physicians’ services. This concern arises regarding the proposed program since, unlike53
TriState’s current contracts, in which its physician members deal individually with InforMed and
other payers regarding price and related contract terms of their participation in those networks
and programs, TriState will be jointly contracting on behalf of its competing physician members
under the proposed program, including negotiating and agreeing regarding the prices to be
charged for those physicians’ services under the program.

Letter to Christi J. Braun
April 13, 2009
Page 30
This contrasts with the situation faced by the proposed network arrangement by the Greater Rochester
54
Independent Practice Association (GRIPA), where other large provider networks appeared to be available to payers
as alternatives to GRIPA. See Letter from Markus H. Meier, Assistant Director, Bureau of Competition, Health Care
Division, Federal Trade Commission to Christi J. Braun, Esquire, and John J. Miles, Esquire at 25-26 (of Sep. 17,
2007), available at http://www.ftc.gov/bc/adops/gripa.pdf.
For a discussion of the Agencies’ approach to determining the exclusivity or non-exclusivity of physicians’
55
participation in a network joint venture, including an enumeration of several “indicia of non-exclusivity” that may
weigh in that assessment, see Health Care Statements at Statement 8, § A.3. See also Id. at Statement 9, § B.2.b.
You state that TriState “has not tied, and will not tie, hospital services and physician services in contracting
56
with customers. W CHA also will not tie the sale of its hospital services to payers’ purchasing [TriState’s] physician
services. . . . W CHA will not force any payer to buy [TriState’s] clinically integrated product by conditioning the
sale of W CHA’s hospital services on the payer contracting with [TriState].”
You also state that “[t]here are no IPAs or PHOs other than TriState operating within Washington
County,” and it therefore is not clear that there are any competitively reasonable alternatives to
TriState available to payers in TriState’s primary service area. Your submission mentions54
InforMed’s “regional” network and certain networks used by some large private payers, which
apparently cover a much broader area than just Washington County, as well as other providers
operating within TriState’s secondary service area. You, however, provide little information
about these networks or providers, and it is not obvious that they represent realistic or practical
alternatives to TriState and its members for payers to offer to their beneficiaries in order to obtain
health care services within TriState’s primary service area.
A potential concern may arise where a network’s provider panel is over-inclusive – for example,
comprising significantly more total physicians or physicians in particular medical specialties than
is necessary for it to provide services effectively to its likely customers. Such over-inclusiveness
may make it more difficult for, and lessen the likelihood that, other, potentially competing
networks and programs will develop in the area. We are not in a position to do a detailed
specialty-by-specialty assessment of TriState’s provider needs, and none was provided to us.
Nevertheless, TriState’s non-urban geographic location and the limited total number of physicians
in its primary service area, combined with the fairly modest absolute numbers of member
physicians and physician practices in each specialty area, suggest that TriState’s physician
network may not be over-inclusive. This view is supported by TriState’s historical operation,
where its largest customer – the Washington County Health System, Inc., health plan – essentially
required TriState to add a significant number of “contracting physicians” to supplement its
provider panel of physician members.
TriState attempts to address these potential competitive concerns by providing assurances that its
proposed program will be non-exclusive, “both de jure and de facto,” and that payers who do55
not wish to contract for the proposed program will be able to contract individually with TriState’s
member physicians, as well as with Washington County Hospital, as they currently do. While56
TriState will inform payers and its members of this non-exclusivity, and will counsel its members

Letter to Christi J. Braun
April 13, 2009
Page 31
The MedSouth advisory opinion raised similar concerns about possible anticompetitive effects – both in
57
terms of physician participants not dealing individually with payers and regarding possible “spillover” price effects –
potentially resulting from that program’s having high percentages of available physicians in certain specialties,
despite the program’s “explicit policy of ‘nonexclusivity’.” The opinion letter noted that, despite the claimed non-
exclusivity:
MedSouth members may have the incentive and the ability to agree not to contract independently
of the venture. They have incentives to seek higher fees to recoup their investments in developing
and implementing the proposed program. Negotiation of fee-for-service rates for the group will
involve identification of price levels that could become the focal point for collusion on individual
contracts. To the extent that the program creates greater communication and interdependence
among the doctors, the easier it likely would be for them to coordinate their activities. Particularly
in light of the doctors’ existing referral arrangements, MedSouth members may be able to
discipline members of the IPA who might be inclined to break ranks and contract independently.
The letter went on to state, however, that:
[w]e cannot conclude with certainty that MedSouth’s physicians actually will contract outside the
IPA; nor can we conclude . . . that MedSouth’s operation will restrict competition unreasonably
. . . W e assume for purposes of this advisory opinion that your representations regarding the
availability of MedSouth members to contract individually with health plans at competitive rates is
accurate and will be borne out by the members’ actual conduct.
In considering the blanket license arrangement in Broadcast Music, the Supreme Court noted that “[t]he
58
District Court found that there was no legal, practical, or conspiratorial impediment to . . . [customers] obtaining
individual licenses [to use individual compositions]; . . . [customers], in short, had a real choice.” 441 U.S. at 24.
Assuming that TriState, in fact, operates in a truly non-exclusive fashion, payers likewise should have the option to
purchase the services of individual TriState member physicians without having to deal through TriState.
about antitrust concerns regarding agreements to refuse to deal, it cannot guarantee that its
members individually will decide to accept a payer’s contract offer, or that payers choosing not to
contract for TriState’s proposed program will be able to secure an adequate physician network
through such individual dealings, or obtain those services at prices that are not above market-
determined levels as a result of the physicians’ interaction through the joint venture.57
A payer’s inability to obtain an adequate provider network through individual contracts, by itself,
normally would not raise antitrust concerns where it was clear that this was the result of
individual decisions by each provider as to the terms on which the provider was willing to deal
with a payer. In the present circumstance, however, with TriState negotiating collectively on
behalf of all of its members, and with TriState physicians representing a very significant
percentage of both the total number of physicians and of those in several specialty areas within
TriState’s primary service area, the inability of a payer to attract sufficient individual TriState
member physicians to contract outside of TriState likely would at least raise serious questions
requiring further investigation and clarification. Consequently, non-exclusivity in practice is of58
critical importance to our conclusion that TriState’s proposed program is unlikely to create or
allow it to exercise market power on behalf of its member participants, or to result in
anticompetitive market effects.

Letter to Christi J. Braun
April 13, 2009
Page 32
Because of the ownership of numerous other related medical and health care providers and services by
59
W ashington County Hospital’s parent organization – W ashington County Health System, Inc. – W ashington County
Hospital may have, or be able to exercise, some degree of market power regarding health care services beyond just
hospital services, as well. See n. 6, supra.
Health Care Statements at Statement 9, § B.2.b.
60
See discussion in Section IV.D.3, infra, re physician complaints regarding the proposed program.
61
b. Effect of Washington County Hospital’s Involvement on
Competition Regarding Physician Services, Hospital Services,
and Related Services
As a physician-hospital organization, TriState and its proposed program involves the participation
by Washington County Hospital. One possible competitive concern about this involvement is
that the hospital – which is the only hospital in the primary service area served by TriState, and
therefore likely possesses a degree of market power regarding hospital services – could act in
ways that adversely affected competition for physician services in that area. A “monopoly”59
hospital’s involvement also could affect competition for related services provided by the hospital,
but for which there are, or might be, competitive alternatives available. These types of
competitive concerns are identified in the Health Care Statements’ discussion of multiprovider
networks:
If there is only one hospital in the market, a multiprovider network by definition,
cannot reduce any existing competition among hospitals. Such a network could,
however, reduce competition among other providers, for example among
physicians in the network and, thereby, reduce the ability of payers to control the
costs of both physician and hospital services [for example, by aligning itself with a
large share of physicians in the market, a monopoly hospital may effectively be
able to insulate itself from payer efforts to control utilization of its services and
thus protect its monopoly profits]. It also could reduce competition between the
hospital and non-hospital providers of certain services, such as outpatient
surgery.60
The latter concern is one that you acknowledge may be present in TriState’s case. You note that
many private physicians who have been expanding into the provision of outpatient services and
seeking new business opportunities view the hospital as a competitor, and this is a particular
source of tension insofar as Washington County Health System, Inc., insists that the care for
which it pays for its health plan enrollees be provided within the Washington County Health
System, Inc., including Washington County Hospital.61
While you have assured us that Washington County Hospital will continue to contract directly
with payers independently of the proposed program where payers so prefer, this could be an area

Letter to Christi J. Braun
April 13, 2009
Page 33
The Supreme Court, in Broadcast Music, alluded to this type of “spillover” concern through possible
62
anticompetitive agreements by the participants in the blanket license arrangement regarding the sale of their
individual compositions outside the joint venture, but found no evidence of the existence of any such agreements.
441 U.S. at 23-24.
See discussion of “spillover effects” in Health Care Statements at Statement 8, § B.2.
63
of serious concern if the providers’ relationship through TriState were to be used strategically to
benefit either the physician participants or the hospital by reducing or eliminating competition
that otherwise would exist in the absence of the participants’ agreement through the joint venture.
Despite these concerns, it appears that if TriState operates as it has proposed, payers unwilling to
contract jointly with physicians through TriState nevertheless should be able to deal individually,
or perhaps through other regional networks, in order to obtain the services of some or all of
TriState’s physicians and hospital member at rates that are not artificially elevated due to the
providers’ coming together through the proposed program. If so, it is not apparent how TriState’s
proposed program would facilitate it or its physician members attaining or exercising market
power or otherwise having anticompetitive effects in the market for physician services.
Likewise, it is not apparent how TriState’s proposed program would enhance Washington County
Health System, Inc.’s already existing leverage to insist that patients covered under its employee
health benefits program be treated within its own system, a current policy that predates the
proposed program. Consequently, it is not clear that its participation in the proposed program is
likely to harm competition or increase Washington County Health System, Inc.’s, market power
beyond that which it already possesses.
Should it, however, become apparent that TriState and its physician members in fact are not
operating on a non-exclusive basis, that payers are unable to obtain access to physician services
needed for their programs outside of TriState and at market-determined rates, or that TriState is
being used strategically to undermine actual or potential competition for services provided by
Washington County Health System, Inc., our initial view of TriState’s market power and the
proposed program’s likely competitive effects would require reassessment. Under those
circumstances, we might rescind this advisory opinion, and might recommend that the
Commission institute appropriate law enforcement activity to remedy any anticompetitive
conduct.
2. “Spillover” Price Effects
Another area of potential concern with a physician network relates to possible “spillover” effects
on pricing by member physicians of their medical services sold outside the network. The62
competitive analysis of a network considers whether the arrangement is likely to facilitate
collusion, either overt or tacit, regarding activities by the participants outside the network. For63
example, agreement by TriState physicians as to the fees they will charge outside of TriState, or

Letter to Christi J. Braun
April 13, 2009
Page 34
In discussing possible anticompetitive “spillover” effects, the Health Care Statements observe that “a
64
network that uses an outside agent to collect and analyze fee data from physicians for use in developing the
network’s fee schedule, and avoids the sharing of such sensitive information among the network’s physician
participants, may reduce concerns that the information could be used by the network’s physician participants to set
prices for services they provide outside the network.” See Statement 8 at § B.2. W hile not technically an “outside
agent,” TriState’s proposed use of non-physician staff to survey its physicians, coupled with its other precautions to
prevent that information from being conveyed to the physicians, may be adequate to achieve essentially the same
result, if the proposed protections are adhered to rigorously.
any agreement only to deal with payers outside of TriState on collectively-determined terms,
would raise antitrust concerns. We therefore would have serious concerns if the proposed
program’s operation facilitated any such agreements among its physicians in selling their services
outside of TriState’s proposed program.
TriState says that it will “take steps to prevent any anticompetitive spillover.” Specifically,
TriState “will limit its members’ access to competitively sensitive information;” “will provide
antitrust counseling to members of the committees responsible for dealing with competitively
sensitive information, and antitrust guidelines to its members;” and “will require all board and
committee members to sign confidentiality agreements and will use those agreements to enforce
its confidentiality policy, which prohibits the disclosure of competitively sensitive information.”
When developing its fee schedule, a non-physician TriState staff person will survey the members’
practices, and only non-physician staff will see actual physician prices. After aggregating this64
information, the staff will destroy the information records from individual practices. Once a
contract is in place, physicians overseeing the program’s operation will “have access only to cost,
not pricing, information as they perform utilization, quality, and cost-effectiveness reviews.
TriState will make every effort to limit the competitively sensitive information reviewed by its
committees.” Finally, TriState’s committee and board members “will receive antitrust counseling
to keep competitively sensitive information confidential, not to use TriState’s information for any
business they conduct outside TriState, and not to discuss or exchange their own prices or
competitive terms.” Any board or committee member who breaches a signed confidentiality
agreement will be removed from the committee or board.
One possible type of spillover effect that is not dependent on sharing of competitively sensitive
information among competing physicians is that TriState physicians individually might seek to
charge the potentially higher prices they receive for their services through the jointly negotiated
contracts under the proposed program even when providing services outside of that program,
without the quality and efficiency enhancements provided through the program’s integrative
aspects. This form of spillover would involve individual member physicians using the
information they each necessarily would obtain about the program’s negotiated reimbursement
levels for their individual services (as evidenced by their payments under the program) in dealing
with payers outside of the program. The concern would be that this information could influence
the prices at which the physicians would offer their services outside the program, and potentially
could allow some TriState physicians, particularly those practicing in specialty areas where there
are few alternative providers in the area, to obtain higher fees from payers.

Letter to Christi J. Braun
April 13, 2009
Page 35
While higher prices certainly are a concern, physicians generally know the payment levels they
receive from various payers for their individual services, and presumably price their services as
the market permits (or demands, in the case of certain government programs). Having
information on their individual payment levels from payers under the proposed program would be
no different from the type of information that they currently have from all other payers under all
programs in which they participate. Payers would remain free to accept or reject those terms to
the same extent that they currently are able, and any ability of particular TriState physicians to
individually obtain higher fees outside of TriState would appear to be the result of supply and
demand or other factors unrelated to TriState’s operation. However, we would be greatly
concerned if activity in the market suggested the possibility of coordinated interaction – either
explicit or tacit – among TriState physicians regarding their dealings outside of TriState. This
could become apparent if payers were unable to contract with physicians outside of TriState at
market rates, which presumably would be lower than the TriState rates, since the latter would be
based on the additional integrated systems, services, and value that the program promises to
provide.
3. Competitive Concerns Expressed by Some Area Physicians
We received several letters from physicians who participate in TriState’s existing programs, but
who expressed concern that if TriState’s proposed program were to receive a favorable opinion
and proceed to operate, it would allow Washington County Hospital Association and its
affiliates/subsidiaries “to gain such a great market share or monopoly on the privately insured
patients of Western Maryland that all other competition would be effectively eliminated.” The
proposed program, they asserted, would create
great potential for the PHO [i.e., TriState to] . . . control the majority of private
insurance eligible patients in [the] . . . region thus leading to marked decrease in
competition, the potential manipulation of reimbursement fees to favor [the
hospital and its subsidiaries] . . . with the potential reduction in appropriate
physician fees and the inability of physicians to adequately respond to these
reductions due to the monopoly situation that would be created. This would
certainly result in the diminution of services to the . . . people of the Washington
County area, less efficient and less prompt service.
The letters and other accompanying memoranda submitted by the physicians raising concerns did
not, however, explain how operation of TriState’s proposed program would have these effects.
As best we can ascertain from the submission, these physicians are concerned about the degree of
market power they believe is already possessed by Washington County Hospital Association
through operation of its subsidiaries, Washington County Hospital, TriState, and Antietam Health
Services, and fear that TriState’s proposed program would add to Washington County Hospital
Association’s market power, to the disadvantage of physicians who do not affiliate with
Washington County Hospital Association and its programs. The materials they submitted also

Letter to Christi J. Braun
April 13, 2009
Page 36
To the extent that Washington County Hospital Association, including its parent organization, subsidiaries,
65
and affiliates, already may have market power or be a monopolist within a relevant geographic and product market,
any activity by it to increase or maintain such market power by means other than competition on the merits –
including through strategic use of its participation in TriState and its proposed program – could raise antitrust
concerns.
See n. 52, supra.
66
indicate a concern that Washington County Hospital Association will use its market power to
essentially require use by all area physicians of Washington County Hospital Association’s health
care facilities and capabilities, thereby making it impossible for independent practices to establish
or successfully operate alternative outpatient services.
It is not evident, nor do the physicians’ letters explain, how operation of TriState’s proposed
program would increase any market power that Washington County Hospital Association may
already have due to its current position as the only hospital in Washington County or its
ownership of certain primary care and other physician practices in the region. TriState’s
commitment to non-exclusive contracting with payers under the proposed program should allow
payers to deal with any area providers, on an individual basis and without going through TriState,
should the payers prefer to do so. Likewise, TriState has stated that access to hospital services
from Washington County Hospital Association will not be tied to, or conditioned on, the purchase
of physician services through TriState.
While it therefore is not apparent how the concerns expressed by these physicians would result
from the proposed program or Washington County Hospital Association’s involvement, as we
have stated generally regarding the program, we would be greatly concerned if the program or the
hospital’s involvement somehow were to be used strategically, in order to increase Washington
County Hospital Association’s power in any area of the health care services market, or to
otherwise disadvantage competitors or unfairly foreclose competition that otherwise might exist
or develop in the market. This could be of particular concern given that TriState physicians65
comprise 64 percent of Washington County Hospital’s medical staff, and half or more of the
physicians in a large number of specialities with admitting privileges at the hospital.66
V. Conclusion
TriState’s proposed program, while still in the relatively early stages of development in certain
respects, nevertheless appears to involve substantial integration by its physician participants that
has the potential to result in the achievement of significant efficiencies that may benefit
consumers if it is implemented as you have described. It also appears that TriState’s joint
negotiation of contracts, including price terms, with payers on behalf of its physician members
who will be providing medical services to the payers’ enrollees under those contracts is
subordinate and reasonably related to TriState’s members’ potentially procompetitive integration

Letter to Christi J. Braun
April 13, 2009
Page 37
In Broadcast Music the Supreme Court observed that per se condemnation of apparently anticompetitive
67
conduct first requires an inquiry focusing on “whether the practice facially appears to be one that would always or
almost always tend to restrict competition and decrease output . . . or instead one designed to ‘increase economic
efficiency and render markets more, rather than less, competitive’.” 441 U.S. at 19-20 (quoting United States v.
United States Gypsum Co., 438 U.S. 422, 441 n. 16 (1978)).
through the proposed program, and appears reasonably necessary to achieve the potential
efficiencies of that program.
Because of the procompetitive potential of the proposed program, the apparent ancillarity of its
joint contracting to furthering achievement of the program’s potential efficiencies, and the
indications that, if operated as you have proposed, TriState is unlikely to be able to attain,
increase, or exercise market power for itself or its participants as a result of implementing the
proposed program, we do not believe that the proposed program’s operation should be summarily
condemned ab initio under prevailing antitrust law standards. We therefore would not67
recommend that the Commission challenge TriState’s proposed program unless it became
apparent that TriState in fact was able to increase or exercise its participants’ market power, or
otherwise have an anticompetitive effect in a relevant market. Because of TriState’s
interrelationship with Washington County Hospital Association, we also would be concerned if
TriState or the proposed program, were used in a way that unfairly eliminated or restricted
competition for the services provided by Washington County Hospital Association and its
subsidiaries, divisions, or affiliates.
This letter sets out the views of the staff of the Bureau of Competition, as authorized by the
Commission’s Rules of Practice. Under Commission Rule § 1.3(c), 16 C.F.R. § 1.3(c), the
Commission is not bound by this staff opinion, and reserves the right to rescind it at a later time.
In addition, this office retains the right to reconsider the questions involved and, with notice to the
requesting party, to rescind or revoke the opinion if implementation of the proposed program
results in substantial anticompetitive effects, if the program is used for improper purposes, if facts
change significantly, or if it otherwise would be in the public interest to do so.
Sincerely,
Markus H. Meier
Assistant Director

OBERIKALERA Professional Corporation
Dber. Kaler. GrimBS & Shriver
Attorneys at law
1401 HStreet. NW, Suite 500
Washington, DC 20005·3324
202·408·8400 Fax 202·40B'()640
www.ober.com
Mr. Donald S. Clark
Secretary
Federal Trade Commission
Room 172
600 Pennsylvania Avenue. N.W.
Washington, D.C. 20580
Dear Mr. Clark:
July 9, 2007
Christi J. Braun
cjbfaun@ober.com
202·326·5046
Offices In
Maryland
Washington. D.C.
Virginia
Pursuant to Federal Trade Commission Procedure Rules 1.1 through 1.4, 16 C.F.R.
§§ 1.1-1.4 (2007), TriState Health Partners, Inc. ("TriState") requests a staff advisory
opinion. Recognizing the need of area employers to control health care expenses and
ensure optimal care for employees and beneficiaries, TriState proposes to develop a non-
exclusive multi-provider network joint venture that will integrate its members clinically as
described in Statements 8 and 9 of the U.S. Department of Justice and Federal Trade
Commission Statements of Antitrust Enforcement Policy in Health Care (1996)
(,'Statements"). I If TriState develops contract proposals that include performance bonuses,
negotiates contract terms (including price), and enters into contracts with third-party payers
for the sale of the integrated product described in this letter, what are the Commission's
enforcement intentions and how would it analyze those activities under Section 5(a)(1) of
the Federal Trade Commission Act?
TriState is a non-exclusive physician-hospital organization ("PHD") whose
approximately 200 practitioner and one hospital system members' are located in
Washington County, Maryland and provide medical services to patients from Maryland,
Pennsylvania, and West Virginia. Originally marketing its integrated product to the local
business community, TriState intends to offer payers a network of primary care and
specialist physicians whose services will be integrated through a formal and stringent
medical management program that includes protocol development and implementation,
performance reporting, procedures for corrective action when necessary, and aggressive
management of high-cost, high-risk patients. The program will offer payers a network of
I To maximize potential efficiencies, TriState intends to align the financial incentives of the joint venture
partners, and further establish the interdependence of its practitioner members, through pay-for-perfonnance
("P4P") risk agreements with payers. The amount of the risk funds, however, will be detennined through
negotiations with payers, and TriState cannot say at this time whether the financial risk sharing through its
P4P contracts will qualify as "substantial," as that tenn is used in the Statements.

OBERIKALE:R.A prureJ$~f\81 Co{poratalo
Mr. Donald S. Clark
July 9, 2007
Page 2
coordinated services from physicians committed to improving outcomes by working
together to achieve quality improvements not possible by working independently.
TriState's physicians will actively collaborate in the development of all facets of the
program, ensuring the cooperative delivery ofhigh-quaIity, cost-effective care.
I. 	TriState
A. 	Members
TriState, which is based in Hagerstown, Maryland, is a Maryland non-stock,
membership organization that incorporated in June 1995. It has two classes of
membership.2 Class I members are primary care physicians ("PCPS"),3 specialty care
physicians ("SCPs"), hospital-based physicians, or oral surgeons licensed to practice in
Maryland, or medical group practices whose physicians or surgeons meet that
requirement.4 The sole Class II member is Washington County Hospital ("WCH"), a
member of the Washington County Health System, Inc. ("WCHSI"), located in
Hagerstown.
1. 	Practitioners
To join TriState, physicians or oral surgeons (collectively "practitioners'') must
complete a written application for membership, meet TriState's credentialing criteria, and
be approved by the TriState Board. TriState has no restrictions on the addition of new
Class I members. Each new Class I member pays ajoining fee of $2,500, which WCH
matches.
There are currently 204 Class I physician members, 64 of which are PCPs
practicing in the specialties of family practice, internal medicine, and pediatrics. The
remaining members are SCPs who practice in 29 specialties.
2 See Exhibit 1, TriState's Bylaws.
3 TriState defines PCPs as those physicians who specialize in family practice, pediatrics, general practice or
internal medicine (excluding its subspecialties).
~ Approximately 17 percent of TriState members are employees of Washington County Health System, Inc.,
through its subsidiaries Washington County Hospital Association and Antietam Health Services (a for-profit
corporation), or Antietam's subsidiary Medical Practices of Antietam, LLC. These employed phYSicians
must comply with all of TriState's clinical integration policies and rules, and they are subject to discipline
deemed appropriate by their TriState peer physicians, including expulsion from TriState.

OBERIKALERA PrDfe.sstONii COqxNlIIJgn
Mr. Donald S. Clark
July 9,2007
Page 3
SPECIALTY
Allerg)'} Asthma/Immunology
Anesthesio logy
Cardiology
Dermatology
Eme~enc:x Medicine, Express Care
Endocrinology
Family Practice
Gastroenterology
General Surgery
Infectious Disease
Internal Medicine Primary Care
Internal MedicinelPediatrics Primary Care
Nephrology
Neurology
Neurosurgery
Nuclear Medicine!Nuclear Cardiology
Obstetrics/Gynecology
Oncology
Ophthalmology
Oral & Maxillofacial Surgery
Orthopedics
Otolaryngology
Pain Management
Pathology
Pediatrics Primary Care
Physical Medicine/Rehabilitation
Plastic Surgery
Podiatry
Psychiatry
Pulmonary Disease
Radiation Oncology
Radiology
Urology
TOTAL
wcns)
EMPLOYED
0
0
0
0
0
2
9
4
t
0
5
6
0
0
0
0
5
0
0
0
0
0
0
0
0
0
0
0
3
0
0
0
0
35
17%
TRISTATE
MEMBERS 5 	TOTAL
2 (l) 	2
9 (1) 	9
11 (4) 	11
3 (2) 	3
1 (1) 	1
I (1) 	3
18 (10) 	27
2 (2) 	6
7 (3) 	8
1 (1) 	1
15 (13) 	20
0 	6
3 (1) 	3
5 (5) 	5
4 (1) 	4
2 (2) 	2
9(4) 	14
4 (2) 	4
2 (2) 	2
5 (2) 	5
12 (3) 	12
6(3 	6
3 (2) 	3
4 (1) 	4
11 (4) 	II
4 (3) 	4
I (1) 	1
7(3) 	7
0 	3
5 (2) 	5
1 (l) 	1
10 (I) 	10
I (1) 	1
169 	204
83% 	100%
Historically, TriState has elected to contract with additional providers to fill
geographic or specialty-coverage gaps in the network. 6 These medical providers do not
pay membership fees and have no governance rights in the PHO. Although TriState will
strongly encourage these contracted practitioners to be a part of its clinical integration
5 The first numbers in the column represents the total number of TriState physicians in each specialty, and the
number in parentheses represents the number of medical groups within which those physicians practice.
6 See Exhibit 2, Chart of Professionals with privileges at WCHA, WCHSI employees, TriState Members, and
TriState Contracted Providers.

OBERIKALER
A Prufl!~onal Corporation
Mr. Donald S. Clark
July 9, 2007
Page 4
program, it anticipates that some may choose not to participate. 	For payers (most of
which are likely to be local employers) that need these non~participating providers in order
to have a complete network but do not wish to contract directly with the providers, TriState
will facilitate agreements with those providers through a messenger arrangement.
TRISTATE CONTRACTED PROVIDERS
SPECIALTY 	TOTAL
Emergency Medicine 	3 (1)
Fami!y_ Practice 	5 (3)
General Practice 	2 (2)
General Surgery 	1 (I)
Hospitalist 	7 (1)
Infertility/Reproductive Endocrinology 	1 (I)
Internal Medicine 	I (I)
Mental Health (non-Physician) 	15
Nurse Midwives 	5
OB/GYN 	1 (1)
Ophthalmology 	4 (2)
Oral & Maxillofacial Surgery 	2 (I)
Pediatrics 	4 (1)
Plastic Surgery 	I (1)
Psychiatry 	10 (6)
Rheumatology 	2 (2)
Urology 	4 (1)
Wound Care 	1 (1)
TOTAL 	69
2. 	The Hospital
WCH, TriState's Class II Member, is an acute-care hospital operated by
Washington County Hospital Association ("WCHA"), a Maryland non-profit membership
corporation that is a subsidiary ofWCHSI. 7 WCH has a medical staff of 319 physicians
who practice in 58 specialties and sUbspecialties through more than 120 group practices in
Washington County and the surrounding area. WCHA is licensed to operate 292 acute
care beds, including 218 medical/surgical, 18 obstetric, 10 pediatric, 18 psychiatric, and 28
acute rehabilitation beds. Designated a Level III Trauma Center by the State of Maryland,
WCH offers a full range of adult and pediatric inpatient and outpatient services including
intensive and progressive care units, a family birthing center, mental health services,
cancer therapy, surgical care, cardiac catheterization, physical and occupational
rehabilitation, and diagnostic imaging.
7 WCHSI has approximately 3,000 employees and serves a tri-state region, including western Maryland,
southern Pennsylvania, and northern West Virginia. See Exhibit 3 for a full description of the programs and
services provided through WCHS[ and its subsidiaries.

OBERIKALER
A f'<or....",..1Cotp<>"'~O"
Mr. Donald S. Clark
July 9, 2007
Page 5
B. 	Organizational Structure
TriState's Board of Directors is comprised of five representatives of the Class II
member and eight Class I members (four PCPs, two surgeons, and two medical specialists,
one of which must be a hospital-based practitioner). 8 On a daily basis, an administrative
staff of eight oversees TriState's operations. 9
To facilitate the implementation of its clinical integration program, the TriState
Board left only its Nominating and Bylaws Committees unchanged and modified or
approved the addition of the following committees: 10
1. 	Finance-Contracting-Administration - monitors the financial performance of
TriState and develops contracting strategies and proposals, including pay-for-
performance models.
2. 	Communications - establishes communication and marketing strategies to
effectively reach all present and potential clients and practitioner members with
information and access to TriState, its products, services and staff.
3. 	Clinical Integration Oversight ("CIOC")- oversees all clinically-related
corporate activities; will establish sub-committees as deemed necessary to
conduct clinically-related activities. I I The sub-committees currently include: 12
a. 	Credentialing - oversees the credentialing and recredentialing processes,
including the development of participation criteria, and works closely with
the Utilization Management/Quality Assurance ("UM/QA") Committee in
evaluating the physicians' quality; solicits, evaluates and recommends
candidates for Class I membership and non-Member provider participation
status; and establishes and maintains participating provider files.
b. 	UMlQA - develops implements, and oversees policies and procedures
related to TriState's utilization management, case management, and disease
8 See Exhibit 4, TriState's Current Board of Directors.
') See Exhibit 5, TriState's Administrative Staff.
10 See Exhibit 6, TriState's Committee Charges.
II A Class I Director chairs the ClOe. Its members are the sub-committee chairs plus one Class II Director.
12 See Exhibit 7, TriState's Committee Membership.

()BER IKALERA P~llft!'S:l>lonal CotpOration
Mr. Donald S. Clark
July 9,2007
Page 6
management activities, including monitoring the metric and benchmark
achievement; and makes recommendations for group improvement.
c. 	Service Improvement ("SIC") - reviews, monitors, and makes
recommendations for improvement of clinical efficiency, utilizing available
technology; annually reviews TriState's clinical policies and procedures and
makes recommendations for changes; and develops new policies and
procedures.
d. 	Quality Improvement ("QIC") - develops and monitors clinical practice
guidelines, reviews and monitors the evidence-based medicine rules,
ensures use of and adherence to the guidelines by the physicians, and
ensures that processes are in place for migrating guidelines and rules to
TriState's membership.
e. 	Pharmacy Benefits Management ("PBM") - reviews the prescription drug
formulary, making recommendations for formulary changes and monitoring
drug utilization.
f. 	Care Coordination ("CCC") - performs concurrent review of care,
identifying issues for resolution through policy and/or procedure changes
and transmits such recommendations to the SIC for action.
c. 	Background
Although TriState started as a risk-sharing joint venture, it contracted on a
capitation basis only for a single year before ceasing to function as a financial risk-sharing
PHD. In 1998, TriState entered into an arrangement with InforMed, L.L.C.
("InforMed"),13 an Annapolis, Maryland health-care consulting and information
technology company that provides third party administrator ("TPA") services, medical
management, health information reporting, health information technology, and a regional
network of physicians, hospitals, and ancillary providers. TriState members who accepted
InforMed's rates and agreed to participate in the InforMed provider network, Community
Health Partners ("CHP"), signed new participation agreements with TriState. 14 In turn,
TriState signed a contract with InforMed for its providers to participate in the CHP
network; to provide some administrative services for InforMed, including credentialing,
network management, clinical oversight, and utilization review; and to obtain health
13 See http://www.infonned-lIc.com/(providing more infonnation on InforMed).
14 The TriState physicians deal directly with InforMed on any issues related to fees or payment of claims.
When fee schedule modifications are made, practitioners are free to accept, reject, or negotiate modifications
with InforMed directly. TriState is not involved in these discussions.

nSERIK/\LERA PrtlfesSlooal COf~QI'at«m
Mr. Donald S. Clark
July 9, 2007
Page 7
information technology ("HIT") services from InforMed. including management of
TriState's claims information database, design and support of an interactive website, and
Internet-based software for eligibility verification and medical referrals.
Through the years, InforMed has contracted with self-insured employers in
Washington County to provide TPA services, hospital and physician services through its
CHP network, and utilization and medical management to employers desiring these
services. Starting in 2004, TriState began working with InforMed on a plan for TriState to
assume more control, responsibility, and accountability over the medical management
functions. TriState has since hired a data analyst, a care coordination manager, and two
case managers, allowing it to subcontract with InforMed to provide all medical
management services for InforMed's Washington County clients.
InforMed currently has contracts with three Washington County employers for
which TriState provides medical management services and its providers, as part ofCHP,
render medical services. The largest employer is WCHSI, which contracts for its own
health plan, the Washington County Health System 	Health Benefits
"Plan"). Currently, the Plan covers 4,974 lives
The other two W~U.lll!;'VU
II. 	TriState's Market
A. 	Geography
TriState is based in Hagerstown, Maryland, the largest town in Washington
County, but its primary service area ("PSA") extends slightly beyond the county.
Washington County is located in a part of western Maryland that, at its narrowest point, is
only eight miles wide. In addition, Interstates 70 and 81 intersect in Hagerstown, making
interstate travel relatively easy. As such, TriState's secondary service area ("SSA")
includes parts of Pennsylvania and West Virginia, as well as Frederick County, Maryland.
To the east of Hagerstown, the next largest town is Frederick, approximately 25 miles
away. To the west, the next town is Hancock, again about 25 miles away. To the north,
about 15 miles away, is Waynesboro, Pennsylvania, and to the south, about 25 miles, is
Martinsburg, West Virginia.
B. 	Alternative Providers
The 2007 population forecast for TriState's PSA is approximately 145,000, and its
SSA is forecast to include more than 350,000 people. TriState's PSA accounts for 80.4%
ofWCH admissions, while 14.5% are from its SSA and 5.1% from other areas. Although

OBERIKALERA Pmfe:$..'~lcnal CorporntlOf1
Mr. Donald S. Clark
July 9, 2007
Page 8
it has not studied how far patients travel for its physicians' services, TriState believes that
the physicians' service area data would be similar to WCH's. There are no IPAs or PHOs
other than TriState operating within Washington County.
The closest competing health system in TriState's service area is Summit Health,
which includes Waynesboro Hospital, a 62-bed hospital, in Waynesboro, Pennsylvania
(about 20 minutes north of Hagerstown) and the 232-bed Chambersburg Hospital
(Chambersburg, Pennsylvania), located about 30 minutes from Hagerstown. Cumberland
Valley Health Network ("CVHN"). the PHO aligned with Summit Health, is a payer-
contracting organization.
Thirty minutes to the south, TriState's main competition comes from the providers
associated with City Hospital, a 144-bed hospital in Martinsburg, West Virginia. City
Hospital and many of its medical staff members contract with payers through Eastern
Panhandle Integrated Delivery System ('"EPIDS"). Based in Martinsburg, EPIDS is a
provider-sponsored, vertical arrangement of physicians and hospitals serving nine counties
in eastern West Virginia.
TriState's closest Maryland competitor is Frederick Memorial Hospital (Frederick,
Maryland), a 253-bed hospital located about 30 minutes east of Hagerstown. Frederick
County's only physician contracting organization ceased operations on December 31,
2006, and most of its former members now contract directly with payers.
C. 	The Payers
Approximately four percent of all patients in TriState's service area are self-pay
patients. Medicare, Medicaid, and TriCare-the government payer~over approximately
50 percent of patients, and workers compensation covers an additional two percent.
Private health insurance or self-insured employers using the services of health plans or
TPAs cover the remaining 44 percent of patients. The major commercial payers in
TriState's market include CareFirst BlueCross BlueShield ("CareFirst"), United Health
Care/MAMSI ("United"), Aetna, CIGNA, and InforMed. Together, CareFirst and United
cover almost 66 percent of the private insurance subscribers. The dominant form of payer
reimbursement for physician services in Washington County is discounted fee-for-service,
although United still reimburses PCPs on a capitation basis for its MDIPA and Optimum
Choice products.
III. 	TriState's Proposed Clinical Integration Strategy
TriState has three main objectives in developing and implementing its clinical
integration strategy. First, the components and processes of the program--exchange of
patient treatment information, clinical guideline development and adoption, performance

USERIKALERA Profosslonal CorporattCn
Mr. Donald S. Clark
July 9,2007
Page 9
monitoring and reporting, and collective work towards improved quality-will facilitate
and assure cooperative interaction and collaboration among TriState's member physicians.
This cooperation and collaboration should align the efforts of the physicians to improve
their patients' health and their delivery of services, resulting in the right care being
rendered in the right setting at the right time. Second, the clinical integration strategy will
engage every TriState stakeholder-physicians, case managers, administrators, payers, and
patients--in a cohesive and comprehensive program of care management. Through the
physicians' adherence to clinical practice guidelines, the physicians' and TriState's use of
HIT to identify high-risk and high-cost patients, the interactive patient support of
TriState's case managers and Medical Director, and involvement of payers in designing
care management initiatives, TriState will more aggressively manage its patients' care than
the stakeholders could achieve working independently. This aggressive care management
should result in identifiable quality improvements for patients and significant financial
benefits for payers. IS Third, the clinical integration strategy will allow TriState to offer
payers an integrated set of services-coordinated physician services focused on quality
improyement and medical management-not previously available in the market. This
integrated product will be desirable to self-insured employers looking to control the rising
cost of providing health care coverage to employees. It will also offer a competitive
advantage to health plans and other payers seeking to distinguish their products on the
basis of quality or quality-adjusted cost.
Although ultimate responsibility for the clinical integration strategy rests with
TriState's Board of Directors, TriState's members are, and will continue to be, actively and
collectively engaged in the strategy. The Clinical Integration Oversight Committee
("ClOG') will oversee development and implementation of the program through its sub-
committees-Credentialing, Utilization Management/Quality Assurance ("UMlQA"),
Service Improvement C'SIC"), Quality Improvement ("QIC"), Pharmacy Benefits
Management ("PBM") and Care Coordination ("CCC"). In addition to establishing the
strategic goals for each subcommittee, the CIOC provides a formal communication forum
for the subcommittee chairs, facilitating the exchange of information regarding the
activities of the subcommittees.
The clinical integration strategy will embrace the following key elements, all of
which will require the active and ongoing participation of TriState's member physicians:
1. 	TriState's program will be built around web-based HIT that will facilitate the
exchange of patients' treatment and medical management information, resulting
in coordinated care delivery, appropriate utilization of resources, controlled
costs. and improved quality and efficiency.
15 Data reflects that about five percent of beneficiaries in any health plan consume about 60 percent of claims
expense, while 40 percent of beneficiaries submit no claims in a given year. Thus, aggressive management
of the five percent can result in significant savings.

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2. 	TriState's SIC will use InforMed's software to review episodes of care-all of
the medical care and services a patient receives from the onset of an illness or
disease through final treatment-encountered in their community and
determine where performance improvement will have the greatest financial and
quality impact. Using this information, the QIC and ad hoc committees of
TriState member physicians will review the appropriateness of existing
guidelines already incorporated in their HIT and develop additional, TriState-
specific clinical guidelines, or Care Protocols. The CIOC and QIC will conduct
periodic reviews of the clinical guidelines to ensure that the performance
improvement sought has been met and, if not, to modify the protocols.
3. 	Through ad hoc peer education committees, the QIC will educate and train
TriState's member physicians in the use and adoption of the Care Protocols.
TriState will encourage use of HIT by the physicians to facilitate application of
the Care Protocols to patient care and to create interdependence in their
provision of medical care.
4. 	The CIOC and SIC will engage in ongoing monitoring to gauge the efficacy of
the guidelines. Using HIT, the SIC will provide personalized feedback to
TriState's members that compares each physician's actual performance against
the performance goals for the TriState network. To assure progress in meeting
its cost and quality efficiency goals, TriState has developed a performance
improvement program, which includes peer education, behavior modification
plans, and sanctions, if necessary.
5. 	TriState will involve its customers in the clinical integration program by
sharing network performance reports, seeking customer input into
modifications or additions to the quality improvement initiatives, and engaging
the customers in the medical management program.
6. 	To complete its integrated product, TriState will integrate medical management
with its physician services. The UMlQA will oversee the delivery of medical
management services and the design of TriState's medical management
program. The SIC will develop policies and programs to incorporate medical
management into the physicians' practices. Using their HIT resources, TriState
physicians and staff will identify patients who could benefit from disease and
case management, and, with the support of the CCC, they will ensure that their
patients receive cost-effective preventive care and avoid high-cost adverse
incidents. Through the PBM, TriState physicians will work with local
pharmacists to develop appropriate, cost-effective prescribing policies, medical
necessity criteria for high-dollar drugs, recommended prescription drug

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fonnularies, and initiatives for educating TriState's physicians and patients
about generic drug alternatives. The PBM will also monitor patient medication
compliance and will work with physicians and patients to improve compliance.
TriState fully intends to implement the program outlined herein. The CIOC and its
subcommittees will closely monitor protocol compliance, benchmark achievement, patient
outcomes, utilization data, and claims costs. If TdState does not achieve the anticipated
quality and cost efficiencies within a reasonable time after implementation of the clinical
integration strategy, the CIOC and its subcommittees will closely re-examine the strategy,
detennine whether changes need to be made and, if so, where, and implement those
changes.
A. 	Integrative Health Information Technology
Internet-based HIT will serve as the foundation for TriState's clinical integration
strategy. InforMed, TriState's historic partner in serving Washington County's self-
insured employers, is tapping its extensive experience and expertise in HIT and supplying
the technology for TriState's strategy. To provide the optimal HIT tools, InforMed is
working with TriState's physicians on the UMlQA committee to redevelop its technology
products to meet the needs of this program and facilitate an infonnation exchange between
the physicians' offices, WCH, and anciUary providers in the community.
The main technology piece is InforMed's virtual electronic health record,
commonly referred to by TriState as the Clinical Claims Chart ("Chart"). Incorporated
into the chart are Ingenix's Symmetry family of products-Episode Treatment Groups
("ETGs"), Episode Risk Groups ("ERGs"), and Evidence Based Medicine Connect ("EBM
Connect,,).16 When delivered to the physician via the Internet, the Chart and its powerful
analytical tools should facilitate a high degree of cooperation, collaboration, and mutual
interdependence previously unattainable by these physicians working independently.
16 Exhibit 8 provides a detailed description of the Symmetry components of the Chart. For more information
on ETGs, see http://www.symmetry-health.com/ETGTut_Descl.htm.

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B. 	Development, Approval, and Implementation of the Care Protocols
1. 	Developing and Approving Guidelines to Improve Quality
EBM Connect's evidence-based guidelines for the treatment of 50 common, costly
medical conditions and screening for eight preventive measures will serve as a starting
point for TriState's guideline development efforts. Although panels of medical experts
developed EBM Connect's guidelines, TriState's QIC is reviewing all of the EBM Connect
guidelines for relevance to the population in the area served by TriState to ensure that the
guidelines incorporate the best, most up-to-date practices. To ensure that the most
qualified individuals review Symmetry's medical condition guidelines and preventive
screenings, the QIC is convening multiple ad hoc committees of specialists in particular
medical conditions (e.g., imaging, orthopedic and neurosurgical specialists to examine
acute low back pain guidelines). 	The QIC is asking these ad hoc committees to carefully
review each guideline and its care components to determine whether the guidelines follow
current national standards and incoworate the best practices of TriState's members and, if
not, what changes should be made? 	By subjecting these guidelines to exhaustive
physician reviews, the QIC anticipates the TriState members will see that the guidelines
are tested and ready for implementation in the community, thus increasing the members'
comfort level.
To truly affect all of its members' quality, TriState knows it will need guidelines in
addition to those currently included in EBM Connect. The goal of the QIC is to have at
least 80 percent of the medical conditions comprising at least 80 percent of the cost of care
20 Tn a cardiology review already begun, the physicians discovered that a particular EBM Connect guideline
is no longer considered a recommended best practice. A diabetes committee determined that a
pharmaceutical drug used to treat diabetes mellitus also is used to treat infertility. Patients being treated for
infertility with this drug were flagged as patients with diabetes. Through InforMed, the Symmetry licensee,
TriState communicated both of these findings back to Symmetry so the software could be modified
accordingly.

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in the community, covered by at least one clinical guideline. The SIC, which will be
monitoring the ETGs and the network medical costs, will determine where improvement in
the treatment of specific ETGs encountered in the community would have the greatest
impact on quality and cost. The SIC will then select specific diseases, diagnoses, and
procedures from the identified ETGs and make recommendations to the QIC. Working
from nationally available evidence-based guidelines, the QIC and its ad hoc committees
will then develop TriState-specific clinical guidelines, or Care Protocols, covering those
specific diseases, diagnoses, and procedures.
The QIC and its ad hoc committees will also develop the quality improvement
benchmarks against which the TriState physicians' performance will be monitored. When
setting the benchmarks for the guidelines and protocols, the QIC will look at the TriState
physicians' current baseline, captured from the InforMed claims data, and then set the
benchmarks at a level above the baseline that will be challenging, yet not unobtainable.
After an ad hoc committee reviews and, if necessary, revises a Care Protocol and its
benchmarks, the QIC will review them and, if no additional modifications need to be made
will present the guideline and benchmarks to the CIOC for its review and approval. The
Board of Directors will conduct a final review and approve all Care Protocols and their
benchmarks. After a Care Protocol receives final approval, the physicians to whom the
guideline applies will be required to incorporate the Care Protocol into their practice and
comply with the guideline when medically appropriate.
2. 	Implementing Quality Improvement
Once the TriState physicians sign on to the clinical integration concept, they will
need to be educated about the program, the guidelines, the protocols, and the Chart. 21 Just
as the QIC will appoint specialty-specific ad hoc committees to review the guidelines and
develop the Care Protocols, it will also appoint specialty-specific ad hoc committees to
educate their peers and implement the guidelines and protocols. TriState believes strongly
that the best way to change its members' practices will be through peer education and
training. By teaching each other and collectively working to improve their quality scores,
TriState's physicians will become more interdependent.
TriState also believes that the Clinical Claims Chart will be instrumental in helping
the physicians to adopt the guidelines and protocols into their clinical practices. By
reviewing patients' records of treatment in the Chart, TriState physicians will be able to
improve their compliance. Through peer teaching sessions, TriState physicians will work
on peer engagement and improvement-first, by personal contact with colleagues when
~I TriState requires in its participation agreement that the physicians will comply with all quality
improvement policies, which would include the EBM Connect guidelines and TriState'S Care Protocols.
Exhibit 9 is a copy of TriState's provider participation agreement.

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they are out of compliance for particular patients, and second, by monitoring network
performance scores and encouraging each other to raise those scores.
c. 	Performance Monitoring and Feedback for Successful Improvement
To obtain the best result from its quality improvement and integration strategy,
TriState, through the CIOC and its subcommittees, will monitor guideline compliance,
benchmark achievement, hospital and emergency room admissions, service utilization, and
network costs. Because TriState is most interested in improving the performance of non-
compliant physicians ("moving the mean"), its focus will be on providing feedback to all
its members and using competitiveness and education to improve outliers. When
necessary, however, TriState will remove physicians from its network who refuse to
improve ("culling the outliers").
The SIC will be the main CIOC subcommittee responsible for reviewing and
monitoring practice efficiency, as well as moving the mean. Much of this will be done
utilizing the ETG tooL By risk-adjusting each patient's data to account for their illness
severity, the ETG report results are normalized, allowing direct comparisons across
patients with similar diseases and physicians who treat those conditions. Where the ETG
tool reveals TriState "best practices"-cost-effective methods of care with high quality
results-the SIC will formally, positively recognize the TriState members who met or set
the high standards. 	When the SIC identifies negative outliers or physicians who fail to
meet TriState's benchmarks, it will use the ETG tool to show the lower-performing
physicians their personal levels of utilization (both under and over) compared to the group,
as well as particularly high-cost care, or unnecessary care, provided to individual patients.
These physicians will be given an opportunity to discuss their quality and utilization data
with the TriState Medical Director and the SIC members so that they can agree what the
data indicates and discuss why, and how, practice modifications may need to be made.
TriState's goal for the SIC is to create opportunities for peer discussions of the individual
and network quality data, so that the physicians can exchange ideas about moving the
mean and support each other as they all work to improve. It is expected that the SIC
members will be aggressive instruments of change as they teach their peers about how to
use the ETG tool information and work with their peers to improve their quality and cost
performance.
When pay-for-performance ("P4P") incentives and peer education are insufficient
to change providers' practice patterns, TriState will take more aggressive steps, which may
include culling the outliers. Physicians who fail to improve after meeting with the SIC and
Medical Director will be given a choice of resigning from the panel or working further on
improvement. A physician who chooses to continue in the program will collaborate with
the Medical Director and one or more physicians from his or her medical specialty in
designing a behavior modification plan, which will set out improvement goals and a

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timeline within which those goals will be met. The SIC will monitor the physician's
progress in meeting the goals and will work with the physician, as necessary, to help him
or her to achieve the goals. If, at the end of the period allotted in the behavior modification
plan, the physician has not met the goals, the SIC will make a recommendation to the
CIOC as to whether the physician should be given additional time or terminated from the
panel. lithe SIC recommends termination, the physician will be given an opportunity for a
hearing before the CIOC. The CIOC will then make a recommendation to the Board,
which will have the final say in a physician's tennination from the TriState network.
The UMlQA will also perform a monitoring function, but it will do so as the
payers' intermediaries. Thus, when it reviews the quality metrics and achievement of
benchmarks, it will be looking at how the network performed with respect to the patients
of specific payers. The UMlQA will identify quality deficiencies, or treatment regimens in
need of improvement, and will make recommendations to the CIOC, such as educational
meetings, specialty-specific meetings, out-reach to specific physicians or practices, or
integration of medical management components into the delivery of the physicians'
services. Once the CIOC decides upon a course of action, the UMlQA will oversee the
new program and assure follow-through for improvement. Once TriState begins
incorporating P4P into its contracts, the UMlQA committee will work with payers to
determine which benchmarks will be used for the P4P initiatives, and it will work with
TriState's physicians to ensure that they make changes in their practices necessary to
achieve theP4P goals and obtain performance bonuses.
D. 	Incorporation of Medical Management for Higher Quality Care
Medical management is the final component of TriState's integrated product.
Unlike medical management programs run by payers or offered by independent companies,
TriState's medical management services will be integrated with its physician services, such
that one set of services cannot be separated from the other. To do this, TriState is tapping
its membership and its CIOC subcommittees to develop its medical management program.
All medical management services will be overseen by the UMlQA, which will ensure that
TriState's physicians are integral members of each managed patient's medical management
team. In addition to working with TriState's case managers on specific patient cases and
following guidelines and protocols that fit into TriState's disease management programs,
the TriState physicians will monitor patient cost and claims data in the Clinical Claims
Chart and engage medical management resources-disease and case management
programs, assistance of case managers, or support of the CCC-when necessary to ensure
patients receive cost-effective care and avoid high-cost adverse incidents. Through the
PBM, the TriState physicians will be engaged in pharmacy benefit design, as well as
review and development of prescribing policies.

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The UMlQA will provide oversight and monitoring for all of TriState's medical
management programs and functions. The Medical Director and the Manager of Care
Coordination will report to the UMlQA committee regarding all active programs. The
UM/QA will also develop, implement, and oversee policies and procedures related to
TriState's utilization, case and disease management activities. To do this, it will actively
engage the TriState physicians in developing the programs and policies, seeking feedback
as the programs are implemented to ensure the physicians find value in participating in
medical management efforts and make use of the available resources for their patients.
The UMlQA will also utilize ad hoc physician committees to provide training to the
TriState membership on medical management programs as they are rolled out, further
reinforcing the concept of medical management integrated with physician services. Based
on recommendations from the TriState physicians and administrators, the UMlQA will
make policy and program change recommendations, as necessary, to improve quality and
reduce costs for the patients and payers.
On the recommendations of the UMlQA committee, the CIOC will draft TriState's
quality improvement policies and procedures relating to medical management. These
policies and written procedures will be a means of memorializing the "lessons learned," as
TriState's physicians become more involved in the medical management process, and
should also facilitate quality improvement over time. The croc will annually review all
medical management policies and procedures and recommend changes when necessary.
1. 	Disease Management/Case Management
One of the main roles of the UMlQA will be to recommend, based on data from the
ETG and ERG tools, the development of disease management programs that will integrate
case management services with the delivery of primary and specialty care physician
services. In addition to working with TriState physicians and administrative staff to create
these programs, the UMlQA committee will oversee and monitor the disease management
programs, recommending changes to improve coordination and collaboration in the
delivery of disease management services. Unlike many commercially-available or payer-
run disease management programs, TriState's disease management programs will be
developed and overseen by the physicians, who will be actively involved in working with
their patients, their patients' other health care providers, and the TriState case managers in
managing and improving their patients' health, as well as engaging patients to manage
their own health. TriState believes its members, patients, and client-payers will see
significant benefits from these disease management initiatives because of the success it has
already had with the more limited diabetes management program that it currently
operates. 22
22 Two years ago, TriState launched a diabetes management program for WCHSI Plan members that involved
aggressive case management work with diabetic patients and their PCPs. TriState identified participants by
their ERG risk score, enrolling the highest risk patients first. Although costs for these patients went up in the

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Supporting the medical management from the administrative side is TriState's
Care Coordination Committee ("CeC"), which meets on aweekly basis to perfonn
concurrent review of physician and hospital services. Although it perfonns a utilization
review function, the purpose of the eec is to identify operational and medical
management issues in the delivery of physician and hospital services, reduce the expenses
for high-cost patients, and ensure that patients receive the appropriate amount of service
from TriState member physicians and care managers. The ecc involves the patients'
PCPs in making decisions about care and, when necessary, also sees that patients are
referred to SCPs who can recommend additional means of improving the patients' health.23
TriState believes that its new approach to medical management will destroy the negative
view of medical management as interfering and disruptive that many physicians have and
already has seen that its members see the wisdom of working more closely with TriState's
case managers to improve the health of their patients.
2. 	Pharmacy Management
Pharmaceuticals are among the largest contributors to payers' health care costs.
Although payers often provide fmancial incentives to patients to use generics and less-
costly alternatives, the payers' costs will not significantly change unless the physicians'
prescribing patterns change. Payers attempt to do this through the creation of prescription
drug fonnularies, which list the drugs the payers are willing to cover and the amount or
portion of the drugs' cost the payers will cover. 	The problem with fonnularies is that they
are often put together without physician input and differentiate coverage solely on the basis
of cost for the individual medications. Thus, many physicians chafe at the restrictions of
the fonnularies.
TriState believes that only through the collaborative efforts of physicians can
pharmaceutical costs be reduced. To spearhead its pharmaceutical strategy, TriState
established the PBM, which includes both local pharmacists and TriState physicians. One
of the main functions of the PBM will be to monitor drug utilization, which will help
TriState and its contracted payers to identify high-cost prescribing practices and low-cost
alternatives. Through this committee, TriState's members will be able to debate the value
first year due to the provision of preventive physician services and increase in case management, costs for the
second year have decreased almost to the base year level. Given the progressive nature of the disease, it is
not expected that costs will decrease over time below that of the base year. However, it is expected that the
program will slow the rate of increase.
23

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of certain therapies, as compared to their costs and risks, and identify "best prescribing
practices." The physicians and pharmacists of the PBM will develop medical necessity
criteria for high-dollar drugs and create generic drug initiatives to educate physicians and
their patients about low-cost alternatives. The PBM will also make recommendations to the
QIC regarding best prescribing practices that it believes should be translated into Care
Protocols for TriState physicians. For self-insured employers and other payers seeking to
get a better handle on theirpharmaceutical costs, the PBM will review the payers'
formularies and drug tiers2 and, through the CIOC, recommend changes that will be both
beneficial to the patients and approved by the physicians. Although payers will have the
right to reject proposed formulary and tier changes, ideally TriState will have a single
formulary with which its physicians comply, thus simplifying and standardizing the
prescribing process. For self-insured employers, thePBM will also review and decide
appeals for coverage of non-formulary drugs. TriState anticipates its physicians will be
more responsive to determinations by this committee because they will know their peers
reviewed their patients' appeals.
Because pharmaceutical costs consume a large portion of health care dollars, the
PBM and UMlQA will work together in determining how to incorporate pharmaceutical
management more intensely into TriState's medical management program. The physicians
will benefit from pharmacists' expertise when trying to determine the best, most cost-
effective course of treatment for their high-risk patients, and the patients will benefit from
pharmacists reviewing their medications.
IV. 	TriState's Contracting with Payers
Payers who choose to purchase the integrated product will receive TriState's
complete network of physicians, collaborative quality and cost improvement initiatives,
and all of the medical management services integrated with the physicians' services. The
TriState physicians will not be allowed to "opt out" of TriState's payer contracts; they will
be contractually required to participate in any contracts TriState enters. When payers enter
contracts with TriState, they will have the option of terminating any pre-existing direct
contracts with TriState physicians or allowing the TriState contract to supercede the
physician contracts. TriState will, however, be non-exclusive. If a payer doesn't want the
complete physician network, or doesn't want to contract with TriState, then it will have the
option of contracting directly with the physicians, and TriState's physician members will
be free to do so. If a payer wants an employee wellness program-to address lifestyle
changes necessary to prevent chronic disease--or medical management--<:ase, disease,
and/or pharmacy-services, TriState's administrative staff (rather than its physicians) will
oversee and provide those services. But, the core parts of its product-protocol
24 Many payers influence their members' choice of drugs by having tiered co-pays. Generally, generics have
the lowest co-pay and lifestyle drugs, such as Viagra, have the highest co-pay.

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development and implementation, quality monitoring, and cooperative management of
patients' medical needs--<:annot be sold separately because they will be integrated into,
and inseparable from, the physicians' services. TriState believes that to fully achieve the
anticipated cost and quality efficiencies of its clinical integration strategy, it must price and
sell the full set of services as a single product. When selling its integrated product to
payers, TriState will offer payers two different payment systems, P4P and fee-for-service.
A. 	Paying for Superior Outcomes and Quality Processes
While P4P is a relatively new payment methodology, the concept is rapidly gaining
traction and many of the major payers-including Medicare and the managed Medicaid
plans-are developing their own particular strategies for paying for documented quality.25
While recognizing and paying for quality is generally a laudable goal, the issue at the
individual physician level is that each payer's P4P strategy will be different and each will
have attendant incremental costs for compliance. 26 In many cases, the costs to an
individual physician to comply with a payer's program is greater than the available
perfonnance payment or recognition for the physician, making it unlikely many solo- or
small-practice physicians will participate.
To bring about change through P4P. TriState plans to develop a single P4P
program in which all commercial payers in the community will participate. TriState's
model for its P4P pror,am is the California P4P run by the Integrated Healthcare
Association ("IHA"). 7 The IHA's P4P program measures the perfonnance of physician
groups in treating their HMO patients on a common set of measures used statewide by
seven participating payers who make incentive payments to the physician groups based on
their perfonnance on the standardized measures. Like the IHA collaborators, TriState
2S See, e.g., http://www.cms.hhs.gov/PhysicianFocusedQuallnits/ (providing information on Medicare's P4P
initiative); http://www.bridgestoexcellence.orgimarketsistatesimaryland.mspx (describing programs operated
by CareFirst and Aetna in Maryland); http://www.uhc.com!healthcaretrendslhealthcarequality.htrn
(introducing United's concept of "premium" physicians who meet certain quality requirements).
26 For example, one payer's P4P initiative may pay physicians higher if they receive "recognition status"
through one of National Committee for Quality Assurance's ("NCQA") prograrns-diabetes, heart/stroke,
back pain, and physician practice technology. To achieve the status and qualifY for the payments, a
physician must pay an application fee and incur a "data mining" cost for reviewing his or her medical records
to determine compliance with the NCQA standard. A second payer's P4P program, though, may be based
entirely on compliance with a set of guidelines that deal with performance of cancer screening tests. The
physician then incurs incremental costs for complying with this requirement.
27 See www.iha.org for details on the program. The IHA's program is a collaborative effort of payers,
physician organizations, hospitals, phannaceutical representatives, technology professionals, consumers and
academic representatives. lHA's P4P program facilitates the financial reward of physicians, through their
integrative groups, for improved performance in clinical care, HIT adoption, and patient satisfaction by
providing a clear set ofperfonnance expectations.

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physicians will work with the other stakeholders in the community-patient
representatives, self-insured employers, and commercial payers-to develop a consensus-
based P4P model that includes guidelines (Care Protocols), performance measures, and
outcomes-based metrics. By having a program with unifonn requirements and
benchmarks, the TriState physicians will be able to focus all of their efforts and resources
on working cooperatively to achieve quality improvements that will benefit all of the
collaborating parties in the Washington County P4P. Unlike the IHA's program, TriState
does not intend for its P4P to provide merely a bonus payment to its participating
providers. Rather, TriState envisions a payment methodology under which all payments to
its providers will take into account the quality of services its members provide.
TriState understands that its program must be sufficiently compelling to incentivize
commercial payers like CareFirst and United to step outside of their own model and agree
to work with a physician group that is focused on superior outcomes, achieving superior
costs, and is data-driven. As a result, TriState believes that it will need to collect a year or
more of performance data from its physicians, showing the success of its clinical
integration strategy for self-insured employers and smaller payers. Thus, it will need to
contract on a fee-for-service basis for some period before it is able to implement its P4P
program.
B. 	Fee-for-Service Contracting
As part of its clinical integration strategy, TriState plans to negotiate both price and
non-price terms with payers for the sale of its integrated package of services. TriState
anticipates that its fee proposals will be based on a percentage of the Medicare Resource
Based Relative Value Scale, which will cover its members' integrated physician services
and the other components of the integrated product.
To develop competitive fee proposals, TriState's PHO External Relations
Representative will survey the practices to detennine what the physicians' price
expectations may be and then will aggregate the data into a fee proposal. Only TriState's
non-physician administrative staff will see the practice surveys, and, once the aggregation
is complete, the survey responses will be destroyed.
Although TriState will show payers this aggregated fee proposal, it anticipates that
some payers will make other proposals or counter proposals. TriState's Finance-
Contracting-Administration committee ("FCA") will be responsible for reviewing the
payers' offers and advising TriState's administrative staff. TriState's Board of Directors
will review contract approval recommendations from the FCA. TriState's antitrust
attorney will counsel the members of the FCA and Board of Directors regarding the need
to keep all competitive terms confidential and not to allow negotiations of the joint venture

OBER/KALERA PrClfEJs:uonal f.GrporatKln
Mr. Donald S. Clark
July 9, 2007
Page 26
product to influence the tenns and conditions upon which the physicians will agree to
contract individually.
C. 	TriState's Need to Contract on its Members' Collective Behalf
TriState will negotiate the price and other tenus for the sale of its integrated
product. Although TriState acknowledges that contracting on its members' behalf will
eliminate competition among its physicians as to the integrated product and, therefore,
constitute "inherently suspect" conduct under Polygram. TriState's integration will
generate significant cost and ?uality efficiencies, and its joint contracting is ancillary to
achieving those efficiencies. 2
Under the Polygram framework, TriState's joint negotiations are not summarily
condemned if TriState can explain why the joint contracting is either not expected to have
an adverse effect on competition, or is likely to provide benefits to consumers. 29 TriState
must proffer justifications that are both cognizable-i.e., they explain how the collective
negotiation enables TriState and its physicians to "improve product quality, service, or
innovation"-and plausible--:-i.e., there is a "specific link" or "logical nexus" between the
joint contracting and the articulated pro-competitive effects.)O Specifically, TriState needs
to show that its program "involves potentially efficiency-enhancing integration" among its
members and that the collective negotiation is "reasonably necessary-i.e., 'ancillary'-to
the achievement of the proposed program's integrative efficiencies.") 1 If, as TriState
purports, its joint contracting is ancillary, the rule of reason applies to its joint negotiations,
28 See Polygram Holding, Inc., No. 9298, slip op. at 29-35 (FTC luI. 21, 2003), reprinted in 5 Trade Reg.
Rep. (CCH) 1 15,453, aff d 416 F.3d 29 (D.C. Cir. 2005) ("Polygram"). The Commission has detennined
that physiCian collective negotiation through a provider-controlled contracting organization is "inherently
suspect under Polygram. N. Tex. Specialty Physicians, No. 9312, slip op. at 26 (ITC Nov. 29,2005),
reprinted in 2005-2 Trade Cas. (CCH) 1 75,032, appeal argued, No. 06-60023 (5 th Cir. Mar. 5,2007)
("NTSP").
29 At this point in the analysis, TriState "need only articulate a legitimate justification, and is not obliged to
prove the competitive benetits." NTSP at ]2.
30 As the Commission explained in NTSP, the "concept of ancillary restraints, which allows an agreement
that would otherwise be viewed as a naked restraint of trade to be evaluated in light of the procompetitive
effects of an efficiency-enhancing integration of economic activity to which it is reasonably related, is
subsumed in the Commission's Polygram analysis." Id. at 13 n. 20.
31 Letter from David R. Pender, Acting Assistant Director, Bureau of Competition, to Clifton E. Johnson,
Esq., Hall, Render, Killian, Heath & Lyman (March 28, 2006), available at
http://www.ftc.gov/osl2006/03/SuburbanHealthOrganizationStaffAdvisoryOpinion03282006.pdf ("SHO").
See also, NTSP at 33 (" ... if an JPA can establish that its joint negotiation of price is reasonably related to an
efficiency-enhancing integration of the participants' economic activity and is reasonably related to achieve
the procompetitive benefits of that integration, the price-related activities may be lawful.").

UBERIKALERA p(Qre'5:nonat Corporatioo
Mr. Donald S. Clark
July 9, 2007
Page 27
and the primary question becomes whether, through TriState, its physicians would be able
to exercise market power.
1. 	Efficiency-enhandng Integration
TriState's integration strategy should create a degree of interdependence and
facilitate collaboration among its members in their provision of care to their patients in
ways that should generate significant cost and quality efficiencies. As explained above,
TriState members are working together to develop and implement "an active and ongoing
program to evaluate and modify practice patterns by the network's physician
participants."n The QIC is reviewing EBM COIlllect guidelines and developing Care
Protocols, which the TriState physicians will incorporate into their practices. The
physicians, individually and through TriState's committees, will track their quality and
cost performance using the Clinical Claims Chart. The SIC will evaluate the physicians'
progress, work to improve individual's and the network's quality, and recommend, if
necessary, expUlsion of persistently underachieving members. To further control costs and
assure quality of care, the UMlQA committee will "establishD mechanisms to monitor and
control utilization of health care services" and develop policies and programs to integrate
medical management services into the physicians' practices. 33 Thus, the quality of services
the TriState physicians provide should improve, and health-care services and resources will
be delivered and utilized more efficiently. Patients should also benefit from the time saved
by the TriState physicians' use of the Clinical Claims Chart and electronic exchange of
referral information.
The program's success wiH require a portion of the members' capital contributions
to finance the infrastructure and HIT. The program's success will also require the
physician participants to invest significant amounts oftime and effort serving on TriState's
formal and ad hoc committees, implementing guidelines and protocols in their practices,
integrating medical management into their practices, collaborating in the care of their
patients, and working together to achieve their quality and cost benchmarks.
2. 	An Ancillary Agreement
TriState's contracting on behalf of its physician members will substantially
enhance the success of its integrated product. TriState's contracting will be "part of a
larger endeavor whose success they promote.,,34 The following interrelated reasons
provide "logical nexus[es]" between TriState's joint contracting and its achievement of
32 Statements, Statement 8.B.l.
33 Id.
34 Polk Bros .. Inc. v. Forest City Enter .. (nc., 776 F.2d 185, 189 (7111 eir. 1985).

OBERIKALEK
A Professional CorPJl'auon
Mr. Donald S. Clark
July 9, 2007
Page 28
cost and quality efficiencies. 35 For TriState to integrate its members' services with the
quality improvement measures and medical management, it is important for all TriState
physicians to participate, and be included, in the contracted network. Unless it sells its
members' services as part of a single package, TriState cannot discern how it will be able
to ensure that all of its physicians are included in each contracted payer's network. In this
respect, the collective contracting "serves to make the main transaction [the integration of
medical services] more effective in accomplishing its purpose" of improving the quality of
medical care and reducing health care costS. 36
The success of TriState's program depends significantly on its physicians participating in
all its contracts. The only way to ensure that all TriState physicians participate in all
TriState payer contracts is for TriState to negotiate payer contracts for its complete
network and prohibit its members from "opting out" of its contracts. No other contracting
methodology will ensure full participation.
First, having the same network for all integrated product contracts is important to
integrating the quality improvement initiatives and medical management services into the
physicians' practices. Maximizing the physicians' collective participation in payer
contracts for the integrated product will, by extension, maximize the number of patients in
each physician's practice covered by the integrated product. Each integrated-product
patient is an opportunity for the physicians to collaboratively treat a patient, integrate
guidelines and protocols into their practices, use the Clinical Claims Chart, and incorporate
medical management into their practices. The more the TriState physicians engage in
integrative activities, the more interdependent they become, increasing the likelihood they
will achieve the anticipated cost and quality efficiencies.
Second, and related to the first, by having a single integrated network provide
services under its integrated product contracts, TriState will be able to reinforce its in-
network referral policy, ensuring that patients stay within the TriState network to the
greatest extent possible. In-network referrals are important to TriState's integration
strategy because each time a TriState patient goes out of network, TriState loses an
opportunity to gather infonnation for the Clinical Claims Chart, to ensure physicians have
an accurate record of care, to improve the health of that patient, and to control the costs of
the patient's care. If TriState's network changed from contract to contract, it would be
difficult to ensure that referrals stay within the appropriate network because the TriState
providers could not be certain that all TriState providers were part of a payer's network.
Having a single, integrated network for every payer with which TriState contracts ensures
that the TriState physicians will be able to keep referrals in the network for all services
TriState physicians provide. In addition, TriState intends to seek contractual reinforcement
35 NTSP at 29.
36 Rothery Storage & Van Co. v. Atlas Van Lines, Inc., 792 F.2d 210,224 (D.C. Cir. 1986).

OBERIKALERA""'''',,,,,,,,., Corpora_
Mr. Donald S. Clark
July 9, 2007
Page 29
from payers of its in-network referral policy. TriState's current self-insured-employer
contracts through InforMed provide coverage through a tiered network-TriState is the
first tier, contracted out-of-county and tertiary-care providers are the second tier, and a
national rental PPO network is the third tier. Patients have a financial incentive, through
lower co-payments and coinsurance, to stay within the TriState network, the first tier.
InforMed data suggests that this tiered system has successfully limited out-of-TriState
referrals, and TriState intends to negotiate for the inclusion of a similar tiered system in its
payer contracts for its clinical integration product.
Third, joint contracting provides an important incentive for the TriState physicians
to develop and implement the clinical integration program. "A restraint is ancillary when
it may contribute to the success of a cooperative venture that promises greater productivity
and outpUt.,,31 	Absent assurance of participation in TriState's contracts, and thus a share
of the revenue generated by those contracts, the physicians would have less incentive to
devote substantial time to reviewing guidelines, developing protocols, teaching their peers
about the guidelines and protocols, monitoring their peers' quality, developing medical
management policies, reviewing prescription drug literature, or developing and
maintaining a drug formulary. Without the physicians' investment of time in developing
and implementing the clinical integration strategy, there will be no integrated product for
TriState to sell. Thus, collective negotiations are integral to the clinical-integration
strategy's success.
Fourth, TriState's offering a single network for its integrated product, and requiring
all members to participate in all network contracts, ensures that its network is readily
identifiable by payers and their subscribers. When payers contract with a physician
organization, it is often important to them that the organization provides an accurate list of
its providers and guarantees those providers' participation. Only by contracting on behalf
of all members, and requiring its members' participation in those contracts, can TriState
ensure that payers will get the full network and thus that they need not negotiate contracts
with numerous individual physicians as wel1. 38 Likewise, when patients sign up for
benefits, they want to be able to quickly determine whether their physicians are in the
payer's network. If it's clear that all TriState physicians must participate in a payer's
TriState network, patients will not need to rely on the accuracy of provider directories.
J7 Polk Bros., 776 F.2d at 189.
38 Payers will also get the benefit of the transaction cost efficiencies from single-signature contracting.
Although these efficiencies may be insufficient by themselves to justify TriState's collective contracting,
their value to payers should be considered in light of the other proffered justifications. See generally.
Broadcast Music, tne. v. Columbia Broad. Sys., 441 U.s. 1 (1979).

USERIKALERA Prntru;s~l1al COrpofatton
Mr. Donald S. Clark
July 9, 2007
Page 30
Finally, having a single network will reduce TriState's administrative burdens and
increase operational efficiencies. TriState won't have to deal with problems of monitoring
and enforcing guidelines and protocols for different physicians for different contracts. It
also will not need to create different lists of physicians for its online referral system.
D. 	No Adverse Effects on Competition
TriState's contracting on the collective behalf of its physicians is unlikely to have
adverse consequences on competition in the markets for physician services. 39 First,
TriState will take steps to prevent any anti competitive spillover. Second, TriState will not
have market power.
1. 	No anticompetitive Spillover
In the context of provider-controlled contracting networks, anticompetitive
spillover effects can occur when pricing infonnation, legitimately obtained and used by the
network, is disseminated to, or otherwise obtained by, network physicians. The concern is
that the physicians may use that infonnation in establishing the prices for their services
sold outside the network. To prevent this, TriState will take preventive steps. First,
TriState will limit its members' access to competitively sensitive infonnation. Second, it
will provide antitrust counseling to members of the committees responsible for dealing
with competitively sensitive infonnation and antitrust guidelines to its members. Finally,
it will require all board and committee members to sign confidentiality agreements and
will use those agreements to enforce its confidentiality policy, which prohibits the
disclosure of competitively sensitive infonnation.
When TriState is developing its fee proposals, TriState's PHO External Relations
Representative-a non-physician staff person-will conduct the surveys of member
practices. Only non-physician staff, who will aggregate the information and destroy
records from individual practices, will view physicians' prices.
Once a contract is in place and the physicians begin rendering services, the
members of the UMlQA and SIC will have access only to cost, not pricing, infonnation as
they perform utilization, quality, and cost-effectiveness reviews. TriState will make every
effort to limit the competitively sensitive information reviewed by its committees.
In addition, TriState's committee and board members will receive antitrust
counseling to keep competitively sensitive infonnation confidential, not to use TriState's
39 The Commission stated in NTSP. "A defendant can avoid summary condemnation, however, if it can
advance a legitimate justification ... •[s Juch justifications may consist of plausible reasons why practices
that are competitively suspect as a general matter may not be expected to have adverse consequences in the
context of the particular market in question'." NTSP at 12 (emphasis added) (citation omitted).

(,JBERIKALER
A Profe~K!flat CotporatlOn
Mr. Donald S. Clark
July 9, 2007
Page 31
information for any business they conduct outside TriState, and not to discuss or exchange
their own prices or competitive terms. All committee and board members will be required
to sign confidentiality agreements, prohibiting them from disclosing competitively
sensitive information to anyone outside their committee or board, If TriState learns of any
such disclosure, it will enforce the confidentiality agreement and remove the individua1(s)
from the committee or board.
2. 	No Market Power
If TriState does not have "sufficient market power to restrain competition
substantially ... the inquiry is at an end; the practice is lawful.,,4o TriState's participation
percentage of physicians in Washington County will be high in some specialties, but
TriState will be truly non-exclusive. Accordingly, TriState will not have market power.
a. 	Participating Physicians41
Short of litigation, defining the market and calculating market shares would be
impossible. Although most of TriState's member physicians have offices in Hagerstown,
the center of TriState's primary service area, they draw patients from a broad geographic
area. TriState's secondary service area includes parts of Frederick County, Maryland,
southern portions of Franklin and Fulton Counties in Pennsylvania, and Morgan, Berkeley
and Jefferson Counties in West Virginia. Within the secondary service area, there are
roughly 1,200 physicians, of which 16 percent are TriState's members. 42
The vast majority of TriState members have admitting privileges at WCH.43 As a
group, TriState members comprise 64 percent ofWCH's medical staff. In most
specialties, they constitute half or more ofthe physicians with admitting privileges
(anesthesiology, cardiology, family medicine, internal medicine, nuclear medicine,
obstetrics/gynecology, oral & maxillofacial surgery, orthopedics, pediatrics, physical
medicine, plastic surgery, podiatry, radiation oncology, and radiology). TriState's
40 General Leaseways, Inc. v. Nat') Truck Leasing Ass'n, 744 F.2d 588, 596 (7'" Cir. 1984).
41 Because TriState does not know which, if any, of its contracted providers will participate in the clinical
integration strategy, the TriState contracted providers are not included in Ihe participation percentages.
TriState does not believe this omission will greatly distort the numbers, as it is likely that a portion of its
Class I Members will decide not to participate, as well.
42 See Exhibit )0 (listing the providers by specialty). The source for the infonnation was the American
Medical Association broker listing.
43 See Exhibit 2 (listing all TriState members, contracted providers and all physicians with admitting
privileges at WCHA). Some TriState members do not have admitting privileges at WCH; they rely upon
hospitalists to admit and care for patients who need inpatient care at WeH.

OBERIKALERA f'rQ'fessionat CorptH<UlOO
Mr. Donald S. Clark
July 9, 2007
Page 32
members comprise 100 percent of the physicians with privileges in 10 specialties (allergy,
endocrinology, gastroenterology, infectious disease, neurosurgery, hematology/oncology,
otolaryngology, pain management, and pathology). These percentages are somewhat
deceptive, though, as there are small total numbers of physicians in many of these
specialties. Although TriState does not expect all of its members to participate in the
clinical integration strategy, it hopes that most will so that it can maintain adequate
geographic and specialty coverage. TriState's clinical integration strategy will be most
effective when it is able to provide all medical care with in-network providers.
Market shares, or participation percentages as proxies, are only one factor bearing
on market power, as the Competitor Collaboration Guidelines recognize. 44 Even more
important is ''the extent to which the relevant agreement is non-exclusive in that
participants are likely to continue to compete independently outside the collaboration in
the market in which the collaboration operates. ,,4S If a network is truly non-exclusive, the
physicians cannot obtain, or exercise, market power by contracting jointly through the
network because all the alternatives that were available to Fayers remain available. All the
network does is provide an additional competitive option. 4
b. 	Non-exclusivity
TriState will be both de jure and de facto non-exclusive. If a payer does not want
to contract with TriState, or cannot reach an agreement regarding contract terms, it will be
free to contract directly with TriState's physicians. Because it is currently non-exclusive
and its members contract directly with most payers, TriState has little concern ahout
continuing to operate on a non-exclusive basis. It will, however, emphasize to its members
that they may contract directly with any payer with which TriState does not have a
contract. In addition, when payers notify TriState that they would prefer to contract with
the physicians directly, TriState will send out notices to its providers to ensure they are
aware of contracting opportunities and know that they are free to enter contracts with those
payers. Thus, TriState's physicians will be available to, and in fact will, provide services
to payers outside of TriState's programs.
TriState's administrative staff, who will be responsible for dealing with payer
representatives, will receive antitrust counseling to ensure that they understand non-
exclusivity, including the fact that payers must be free to decide whether to contract with
44 ABA Section of Antitrust Law, Joint Ventures: Antitrust Analysis of Collaborations Among Competitors
§ 3.34 (2006).
46 Cf. Wis. Music Network v. Muzak Ltd. PartnershiI!, 5 F.3d 218,222 (the "program enhances competition
by increasing the available choices for ... customers").

OBER/KALERA ProfessIOnal CorporcllHJn
Mr. Donald S. Clark
July 9, 2007
Page 33
TriState. Although TriState will make every effort to market its integrated product on its
merits, payers wishing to contract with TriState's physicians outside of the TriState's
program will be able to do so. TriState will take no action to prevent the payer from
contracting with its members directly.
v. 	Conclusion
TriState's goal, in implementing its clinical integration strategy, is to help provide a
solution to the rising cost of health care for Washington County employers. Through the
cooperation and collaboration of its physicians, TriState'S integrated product should
improve the quality and cost-effectiveness of the health care services its physicians deliver
and should, therefore, provide important benefits to patients, employers, and payers. A
secondary goal of the clinical integration strategy is to support the independently
practicing physicians by giving them the tools to provide better care to their patients and
helping them to produce a premium product for which purchasers are willing to pay a
higher price. The program should benefit all three stakeholders-patients, payers, and
physicians.
Pursuant to Federal Trade Commission Procedure Rule lA, 16 C.F.R. § 1.4 (2006),
GRIP A requests that portions of this letter, as well as certain documents attached as
exhibits hereto, be treated as confidential under Federal Trade Commission Procedure Rule
4.10, 16 C.F.R. § 4.1O(a)(2) (2006), and § 6(t) of the Federal Trade Commission Act, 15
U.S.C. § 46(t) (2006). All information to be withheld is competitively sensitive
infonnation, including pricing, costs and information subject to confidentiality agreements,
patents, or copyright protection.
Sincerely yours,
Ct~ Vg~",-""
Christi 1. Braun
144311vS

Exhibit 	1

BYLAWS OF
TRI-STATE HEALTH PARTNERS, INC.
Page 1 of 20 Pages

Exhibit 	2

Exhibit 2
TriState Physicians and Physicians with WCHA Privileges
~s~.. \:: 	~i5:r~ FI~t ":' 	~i~d!.!l·rt:\, •.. T~e:... . ': (J~~ysICla!ls'~fCl~~t:e Group:" s.peclalty~t:lipuoJ)
~i~c;;: WCHA 	WCHSJ. 	TriState.: ~r .•
. < 	'.' 	.::' ;.• ;.>:.:... \ ........ " \,:." 	H9SP£; .employ~ 	TriState Contr"~ H9Sp•. Priv•	
,'.,	
" ,.':' q..('. i.' ,:.., 	' ...... : 	Prlv' >" 	>: ~ Member 	. "'.'~' :
Mauriello 	Paul 	MD 	Mauriello & Orfan PA 	Allergy/Immunology 	Haoerstown 	x 	x 	,
Orfan 	Nicholas 	MD 	Mauriello & Ortan. PA 	Allergyllmmunology 	Haaerstown 	x 	x
Ajrawat 	Satinder 	Mo 	Blue Ridge Anesthesia Associates. 	Anesthesiology 	Hagerstown 	x 	x
LLC
Bradford 	Norman 	F, 	Mo 	Blue Ridge Anesthesia Associates, 	Anesthesiology 	Hagerstown 	x 	x
LLC
Carpentieri 	Richard 	F. 	MD 	Blue Ridge Anesthesia Associates, 	Anesthesiology 	Hagerstown 	x 	x
LLC
Cifor 	Sandra 	DO 	Blue Ridge Anesthesia Associates, 	AnestheSiology 	Hagerstown 	x 	x
LLC
Cios 	Jerzy 	H. 	MD 	Blue Ridge Anesthesia Associates, 	AnestheSiology 	Hagerstown 	x 	x
LLC
Cutler 	Carlo 	DO 	Blue Ridge Anesthesia Associates, 	Anesthesiology 	Hagerstown 	x
LLC
D'Alauro 	Frederic 	S, 	Mo 	Blue Ridge Anesthesia Associates, 	Anesthesiology 	Hagerstown 	x 	x
LLC
Horn 	Michael 	MD 	Blue Ridge Anesthesia Associates, 	Anesthesiology 	Hagerstown 	x 	x
LLC
Kataria 	Bideshwar 	MD 	Blue Ridge Anesthesia Associates, 	Anesthesiology 	Hagerstown 	x
LLC
Magnus 	Adam 	C 	MD 	Blue Ridge Anesthesia Associates, 	Anesthesiology 	Hagerstown 	x
LLC
Monteblanco 	Sofia 	DO 	Blue Ridge Anesthesia Associates, 	Anesthesiology 	Hagerstown 	x
LLC
Shank 	Luigina 	MD 	Blue Ridge Anesthesia Associates, 	Anesthesiology 	Hagerstown 	x 	x
LLC
Trevan 	Lisa 	C. 	MD 	Blue Ridge Anesthesia Associates, 	Anesthesiology 	Hagerstown 	x
I'Bachenheimer) 	LLC
Wertheimer 	Barry 	MD 	Blue Ridge Anesthesia Associates, 	Anesthesiology 	Hagerstown 	x 	x
LLC
Soodan 	Ajay 	MD 	Baltimore Heart Associates, PA 	Cardiac 	Randallstown 	x
Electrophysiology
Hornbaker 	John 	H, 	MD 	Cardiac DiagnostiC Center 	CardiolofrL 	Hagerstown 	x 	x
Amegashie 	Ernest 	Kojo 	Mo 	Cardio-Vascular Center of 	Cardiology 	Hagerstown 	x 	x
Hagerstown
Faridi 	Zubair 	H 	MD 	Hagerstown Heart 	Cardiology 	Haqerstown 	x 	x

Exhibit 2 	2
TriState Physicians and Physicians with WCHA Privileges
Last} 	') First 	Mld~le'5, ' Tltl~;:< ';: <: 	Pl:lYsIc1a'lIt,Practlce Group' 	" S~clalty Description "
i~t!¥;i;,."t~':~i:';r;,~!;;~<' .. , WCHA 	WPHSI,,' !Trl~t~ 'TriState 	,Other
"
, 	, 	h;," ' " 	'. ,,:' "":" 	','", ,," 	~ " 	,HoSp> (:e~~~~~~; ~;Meinbel" cOlltracted ~osp.prlv,
,::' .:: : 	,,;~ ,,' " 	~ \ 	Prlv. " 	I' .
Hamilton 	Scott 	Martin 	MD 	Ha!lerstown Heart 	Cardiolo!lY 	Ha!lerstown 	x 	x
Hood 	W. 	Stephen 	MD 	Hagerstown Heart 	CardiolollY 	H<m..erstown 	x 	x
Jones 	Jeffrey 	D 	MD 	Hagerstown Heart 	Cardiology 	Hagerstown 	x 	x
Notabartolo 	Dean 	MD 	Ha!lerstown Heart 	Cardiology 	Hagerstown 	x 	x
Papuchis 	Gary 	C. 	MD 	Hagerstown Heart 	Cardiology 	Hagerstown 	x 	x
Reilly 	Joseph 	M. 	MD 	Hagerstown Heart 	Cardiology 	Hagerstown 	x 	x
Carlos 	Michael 	E 	MD 	Robinwood Heart Center 	Cardiology 	Hagerstown 	x
Haque 	Reyaz 	UI 	MD 	Robinwood Heart Center 	Cardiology. 	Hagerstown 	x
Padder 	Feroz 	Ahmad 	MD 	Robinwood Heart Center 	Cardiology 	Hagerstown 	x 	x 	:
ZiNi 	Khalid 	Mahmood 	MD 	Robinwood Heart Center 	Cardiology 	Hagerstown 	x 	x
DonofriO 	Mary 	Teresa 	MD 	Children's National Medical Center 	Cardiolo!lv, PediatriC 	Washington DC 	x
Doroshow 	Robin 	Winkler 	MD 	Children's National Medical Center 	Cardiology, Pediatric 	Washington, DC 	x
Nahar 	Jai 	K 	MD 	Children's National Medical Center 	Cardiology, Pediatric 	Washington DC 	x
Spurney 	Christopher 	Fore 	MD 	Children's National Medical Center 	Cardiologv, Pediatric 	Washington DC 	x
Rumbarger 	Tara 	A 	MD 	Drs. Rumbarger & Schiro, PA 	Dermatol<lQt 	Hagerstown 	x 	x
Schiro 	James 	MD 	Drs. Rumbarger & Schiro, PA 	Dermatology 	H~erstown 	x 	x
Waldman 	Paul 	MD 	Drs. Waldman & Money, PA 	Dermatology 	Hagerstown 	x 	x
Barrueto 	Fermin 	MD 	Washington County Emergency 	Emergency Medicine 	Hagerstown 	x
Physicians, LLC
Bernius 	Morgen 	Jolielte 	MD 	Washington County Emergency 	Emergency Medicine 	Hagerstown 	x
PhYSicians, LLC
Corwell 	Brian 	Aiall 	MD 	Washington County Emergency 	Emergency Medicine 	Hagerstown 	x
Physicians, LLC
Darling 	Robert 	G. 	MD 	Washington County Emergency 	Emergency Medicine 	Hagerstown 	x 	x
PhysiCians, LLC
Gaibi 	Tanveer 	MD 	Washington County Emergency 	Emergency Medicine 	Hagerstown 	x
Phy_sicians, LLC
Gilbert 	Thomas 	J. 	DO 	Washington County Emergency 	Emergency Medicine 	Hagerstown 	x 	x
Physicians, LLC
Helinski 	Christine 	LaRue 	M.D. 	Washington County Emergency 	Emergency Medicine 	Hagerstown 	x
Physicians, LLC
Kadiwar 	Jayantilal 	MD 	Washington County Emergency 	Emergency Medicine 	Hagerstown 	x 	x
Physicians, LLC
Kotch 	Stephen 	J. 	MD 	Washington County Emergency 	Emergency Medicine 	Hagerstown 	x
. 	Physicians, LLC 	._- 	- 	---

Exhibit 2 	3
TriState Physicians and Physicians with WCHA Privileges
La~t'~;> 	1!!l'!it: •.•••.•.. MI~~1!t ..•<. I]:;·><t~ 'P~yslc,ansPractlceGrOup 	Sp~laltyl)es~r1p~on.,.·;.· pn~~~:. W~HA: 	WCHS.· 	TrlSta~ . 	.Other
:.;":'::;;; 	,":*,"" ,." 	:,/,,~.:' .. ~>:'.: ::< 	", .";::~;~:f; ·~o,rt· · elil~;~.• TriState Cp~~~~~ Hosp. Prlv;
;:: 	. '. 	","" 	:,,<",
."",.' 	'Mem~r' 	: r::"/" .. ,	
,':/,",.,'
Liferidge 	Aisha 	Towana 	MD 	Washington County Emergency 	Emergency Medicine 	Hagerstown 	x
Physicians, LLC
Malik 	Mohammad 	R 	MD 	Washington County Emergency 	Emergency Medicine 	Hagerstown 	x
Physicians, LLC
Mayo 	Douglas 	David 	MD 	Washington County Emergency 	Emergency Medicine 	Hagerstown 	x
Physicians, LLC
O'Mara 	Sean 	Joseph 	MD 	Washington County Emergency 	Emergency Medicine 	Hagerstown 	x
Ph~sicians, LLC
Prisk 	David 	DO 	Washington County Emergency 	Emergency Medicine 	Hagerstown 	x
Physicians, LLC
Schruefer 	John 	Michael 	MD 	Washington County Emergency 	Emergency Medicine 	Hagerstown 	x
Physicians, LLC
Stone 	Roger 	M, 	MD 	Washington County Emergency 	Emergency Medicine 	Hagerstown 	x
Physicians, LLC
Twanmoh 	Joseph 	R 	MD 	Washington County Emergency 	Emergency Medicine 	Hagerstown 	x
Physicians, LLC
Van Wie 	Donald 	Francis 	DO 	Washington County Emergency 	Emergency Medicine 	Hagerstown 	x
Physicians, LLC
Wegner 	Scott 	A 	MD 	Washington County Emergency 	Emergency Medicine 	Hagerstown 	x
Physicians, LLC
Ellis 	Vicki 	Elaine 	MD 	Washington County Emergency 	Emergency Medicine, Ex Hagerstown 	x
Physicians, LLC
Folino 	Lucille 	DO 	Washington County Emergency 	Emergency Medicine, Ex Hagerstown 	x
Physicians, LLC
Fowler 	Sandra 	MD 	Washington County Emergency 	Emergency Medicine, Ex Hagerstown 	x
Physicians, LLC
Kugler 	R 	Lawrence 	MD 	Washington County Emergency 	Emergency Medicine, Ex Hagerstown 	x 	x
Physicians, LLC
Pickard 	Sybil 	Dawn 	MD 	Washington County Emergency 	Emergency Medicine, Ex Hagerstown 	x
Physicians, LLC
Scherer 	Patricia 	DuPuis 	MD 	Washington County Emergency 	Emergency Medicine, Ex Hagerstown 	x
Ph~sicians, LLC
Thompson 	Edward 	Monroe 	MD 	Washington County Emergency 	Emergency Medicine, Ex Hagerstown 	x
Physicians, LLC
Vandenbosche 	Robert 	C, 	MD 	Washington County Emergency 	Emergency Medicine, Ex Hagerstown 	x
Physicians, LLC

Exhibit 2 	4
TriState Physicians and Physicians with WCHA Privileges
Last" 	, ~' Fl,rst 	<:>', Middle'·,,;;,· :n~~';>' ' :;;',~~Yslcla!l~,F''''~t!~;.Gl~UH: ' S~I~I~;~l!Crl~t1orf ' CitY, ~;; 	WCHA: ,WCHSI 	TriState " 	Other
..;> " ' ';,>;,j.~;>,: ' 	',"< 	'~i>\;>" 	, 	> "". >,' 	'" " '; ::,>" ,·Hosp; 	~9r!lployee .Tristaf,; COlltr~cted Hosp.Priv.
> ,," 	: 	Pri':; 	,Member	~ ': ~ .,'
Womeldorf 	Susan 	MD 	Washington County Emergency 	Emergency Medicine, Elq Hagerstown 	x
Physicians, LLC
EI-Khodarv 	Ashraf 	MD 	Robinwood EndocrinolOQv 	Endocrinologv 	Haoerstown 	x 	x 	x
Maldonado-Brem Adriana 	Catalina 	MD 	Robinwood Endocrinology 	Endocrinology 	Hagerstown 	x 	x 	x
Lippman 	Steohen 	MD 	Stephen S, Lippman. MD 	Endocrinology 	HaQerstown 	x 	x
Krempel-Portier 	Bonita 	DO 	Emmittsburg Osteopathic Primary 	Family Practice 	Thurmont 	x 	x
Care Center, Inc,
Uzicanin 	Ernest 	MD 	Ernest Uzicanin, M,D. 	Family Practice 	Hagerstown 	x 	x
Guedenet 	Robert 	J.S. 	MD 	Family Medicine Center 	Family Practice 	Keedvsville 	x 	x
Blash 	Steven 	J. 	MD 	Hager Park Health Center 	Familv Practice 	Haoerstown 	x
Shranalan 	Larrv 	J. 	DO 	Hager Park Health Center 	Family Practice 	Hagerstown 	x
Shranatan 	Sheila 	DO 	Hager Park Health Center 	Family Practice 	Haaerstown 	x
Xu 	Guoping 	MD 	Hager Park Health Center 	Family Practice 	Haaerstown 	x
Bui 	Tu 	MD 	Hagerstown Family Medicine. PC 	Family Practice 	Hagerstown 	x 	x
Saxena 	Preeti 	MD 	Hagerstown Family Medicine PC 	Family Practice 	Hagerstown 	x 	x
Saxena 	Saniav 	MD 	Hagerstown Family MediCine, PC 	Family Practice 	Haaerstown 	x 	x
Mahmood 	Shahid 	MD 	Howard N. Weeks, M.D., P.A. 	Familv Practice 	Haoerstown 	x
Weeks 	Howard 	MD 	Howard N, Weeks, M.D., P.A. 	Family Practice 	Hagerstown 	x 	x
Qadir 	Ghazala 	MD 	Malik & Qadir, PA 	Family Practice 	Boonsboro 	x 	x
Ditto 	Allen 	W. 	MD 	Potomac Family Medicine 	Family Practice 	HaQerstown 	x 	x
Kutzera 	William 	E. 	MD 	Potomac Familv Medicine 	Family Practice 	Haoerstown 	x 	x
Metzner 	Stephen 	E. 	MD 	Potomac Familv Medicine 	Familv Practice 	Haaerstown 	x 	x
Strauss 	Kelli 	A. 	MD 	Potomac Family Medicine 	Family Practice 	Haaerstown 	x 	x
Lvnch 	Robert 	MD 	Robert Lynch, MD 	Family Practice 	Martinsburg 	x 	x
Beckwith 	Matthew 	MD 	Robinwood Familv Practice 	Family Practice 	Haaerstown 	x 	x 	x
Brown 	Stephanie 	Denise 	MD 	Robinwood Familv Practice 	Familv Practice 	Haoerstown 	x 	x 	x
Joy 	Teresa 	M. 	DO 	Robinwood Family Practice 	Family Practice 	Haoerstown 	x 	x
Patalinahua 	Neal 	MD 	Robinwood Family Practice 	Famiiy' Practice 	Hagerstown 	x 	x 	x
Rovster 	William 	E. 	MD 	Robinwood Family Practice 	Family Practice 	Haaerstown 	x 	x 	x
Bodenheimer 	William 	F. 	MD 	South Mountain Family Practice 	Family Practice 	Boonsboro 	x 	x
Hahn 	Matthew 	MD 	TriState Community Health Center 	Familv Practice 	Hancock 	x
Datta 	Vasant 	MD 	Vasant Datta, MD 	Familv Practice 	Funkstown 	x 	x
Haeckler 	Barbara 	MD 	Walnut Street Community Health 	Family Practice 	Hagerstown 	x
Center
Koilpillai 	Gnanaraj 	MD 	Walnut Street Community Health, 	Family Practice 	Hagerstown 	x
Center

Lalit. , .}>'If'~t .. ' 	IMi~j2)\:
Rioole 	Martha
Gallow 	Gary
Rettig 	Stephen
Stewart, III 	Joseph
Buchanan 	Sarah
Ciccarelli 	K. 	Jill
Gibson 	Matthew 	Howard
Rao 	Samuel 	Javakara
Bolarum 	Praveen 	K.
Cremins 	James
Ferreira 	Nelson 	L
Lewis 	Christine 	P.
Tayler 	Juan 	A.
Enam 	Pear 	M
Trace 	Robert 	J
Graves 	William
Milroth 	William
Uchino 	Itsuro 	John
Chanev 	Charles 	R.
Sachs 	Stephen 	M.
Collins 	Frank 	J
Hobart 	Dona 	C.
Nauven 	Anhtai 	H.
Su 	William 	T.
Weinberg 	Daniel 	J.
Riggle 	Karl 	P.
Omeish 	Esam 	S.
Kross 	Marc 	E.
Espinoza 	IAlida
Exhibit 2 	5
TriState Physicians and Physicians with WCHA Privileges
'+:::.' ..... , 	".i'··.I:PSI~~Z;~j:ri!!I;~f·····.I~!<;·~·:,~;t~) :;"'~;;:;:·'~i'~;~.I&~~~~~~.·.lil:~~;I~:;~;~.I.H.;;;IV.
MD 	I Walnut Street Family Practice
MD 	IWaynesboro Family Medical
Associates
MD 	IWaynesboro Family Medical
Associates
MD 	IWaynesboro Family Medical
Associates
MD 	IWilliamsport Family Practice
MD 	IWiliiamsport Family Practice
MD 	IWiliiamsport Family Practice
MD 	IWilliams~rt Family Practice
MD
MD 	I Digestive Disorders Consultants
MD 	I Digestive Disorders Consultants
MD 	I Digestive Disorders Consultants
MD 	IDlgestive Disorders Consultants
MD 	IGastroenterology Associates
MD 	I Robert J. Trace, MD
MD 	IGraves Medical Practice
MD 	IWilliam Milroth. MD
MD 	ICenter for Vein Medicine
MD 	ICharies R. Chaney, M.D.
MD 	I Hagerstown Surgical Clinic
MD 	IPotomac Surgical Specialists, LLC
MD 	IPotomac Surgical Specialists. LLC
MD 	IPotomac Surgical Specialists, LLC
MD 	IPotomac Surgical Specialists. LLC
MD 	IPotomac SurgiCc!ISpeci~lists, LLC
MD 	ITriState Surgeons, LLC
MD 	IEsam S. Omeish, M.D.
MD 	IMarc E. Kross, MD
MD 	IAntietam Oncology and Hematology
GroIJP, PC
Famlli' Practice
Family Practice
Family Practice
Family Practice
Family Practice
Family Practice
Family Practice
FamilyPractice
Family Practice
Gastroenterology
Gastroenterology
GastroenteroJ~
Gastroenterology
Gastroenterology
Gastroenterology
General Practice
General Practice
General SurgerY_
General Surgery
GeneralSu~
General Su~ry_
General Surgery
General Surgery
General Surg~
GeneralSu~
General S~ry_
General Surgery,
Trauma
General Surgery,
Trauma
Hematology/Oncology
Hagerstown 	x
Waynesboro 	x 	x
Waynesboro 	x 	x
Waynesboro 	x 	x
Williamsport 	x 	x
Williamsport 	x 	x 	x
Williamsport 	x 	x 	x
Williamsport 	x 	x 	x
Hagerstown 	x
Hagerstown 	x 	x 	x
Hagerstown 	x 	x 	x
Hagerstown 	x 	x 	x
Haaerstown 	x 	x 	x
Haaerstown 	x 	x
Haaerstown 	x 	x
Berkeley Springs 	x 	x
McConnellsburg 	x 	x
Hagerstown 	x
Haaerstown 	x 	x
Hagerstown 	x 	x
Hagerstown 	x 	x
Haaerstown 	x 	x
Haaerstown 	x 	x
Hagerstown 	x 	x
Hagerstown 	x 	x
Haoerstown 	x 	x
Hagerstown 	x
Hagerstown 	x 	x 	x
Hagerstown 	x 	x

Exhibit 2 	6
TriState Physicians and Physicians with WCHA Privileges
~st 	.?:-;- ...• Fi~~'</, ..... Middle " .. Ir-~~~.;>· "'y'ffl"YtilclansP~ctlc;e ~ro~p 	SPElc!alty;f)es~~Ptlt;'"> I~~~[~l~~'~;:(.: 	...... WCftA 	.wC;H$1 . 	....:... 	Trl~te 	Other 	I	
,~,):>,:;~;".,,,, ", 	",,'.- "
;>.< ' 	<';';"',' '" .' 	~:.~> eniploy~ TrlfJ~te. CQntTac;ted	7:', 	» 	..::>' 	' .. 	I, 	...••... 	<', 	...'.: :Mem~r
H,o.sp_ PriV.
Hamdan 	Hind 	MD 	Antietam Oncology and Hematology Hematology/Oncology 	Hagerstown 	x 	x
Group, PC
Kass 	Frederic 	H 	MD 	Drs Newman, Wooster, Kass, 	Hematology/Oncology 	Hagerstown 	x 	x
Bradford & McCormack PA
McCormack 	Michael 	J. 	MD 	Drs Newman, Wooster, Kass, 	Hematology/Oncology 	Hagerstown 	x 	x
Bradford & McCormack PA
Aayako-Wiredu 	David 	A. 	MD 	Osler Inoatient Services 	Ho~talist 	Haqerstown 	x 	x
Baran 	Mark 	S. 	MD 	Osler Inpatient Services 	Hospitalist 	Haqerstown 	x 	x
Daniels 	Francisco 	A. 	MD 	Osler Inpatient Services 	Hospitalist 	Haaerstown 	x 	x
Hubblv 	Madhavi 	MD 	Osler Inpatient Services 	Hospitalist 	Haaerstown 	x 	x
Kalka 	Jaroslaw 	R 	MD 	Osler Inoatient Services 	Hospitalist 	Hagerstown 	x 	x
Kurapaty 	Mercy 	S 	MD 	Osler Inpatient Services 	Hospitalist 	Haqerstown 	x
Mbaoua 	Judith 	MD 	Osler Inpatient Services 	Hospitalist 	Haaerstown 	x 	x
Syed 	Gaffar 	A 	MD 	Osler Inpatient Services 	Hosoitalist 	Haaerstown 	x 	x
Delaoortas 	Dino 	J. 	MD 	Dr. Dino J. Delaoortas, PA 	Infectious Disease 	Haaerstown 	x 	x
Asmar 	Pierre 	MD 	Pierre Asmar, MD 	Infertility/Reproductive 	Annandale 	x 	x
Endocrinology
Cohen 	Barrv 	M. 	MD 	Barry M. Cohen, MO 	Internal Medicine 	Haaerstown 	x 	x
Kuttner·Sands 	Cynthia 	MD 	Cynthia Kuttner·Sands, MD 	Internal Medicine 	Hagerstown 	x 	x
Higginbotham 	Lisa 	Kathleen 	MD 	Dr. Oino J. Delaoortas, PA 	Internal Medicine 	Haaerstown 	x 	x
Bradford 	Pamela 	F. 	MO 	Ors Newman, Wooster, Kass, 	Internal Medicine 	Hagerstown 	x 	x
Bradford & McCormack PA
Hurwitz 	Jeffrey 	O. 	MD 	Ors Newman, Wooster, Kass, 	Internal Medicine 	Hagerstown 	x 	x
Bradford & McCormack PA
Newman 	George 	C. 	MO, PhD Ors Newman, Wooster, Kass, 	Internal Medicine 	Hagerstown 	x 	x
Bradford & McCormack PA
Monev 	Mary 	E. 	MO 	Drs. Waldman & Monev PA 	Internal Medicine 	Haaerstown 	x 	x
Murshed 	Farid 	MO 	Farid Murshed, M.O. 	Internal Medicine 	Hagerstown 	x
Andrade 	Francisco 	L. 	MD 	Francisco Andrade, MO 	Internal Medicine 	HaQerstown 	x 	x
Hanif 	Rashid 	MD 	Gastroenterology Associates 	Internal Medicine 	Haaerstown 	x 	x
Theodoru 	Radu 	M 	MD 	Haqer Park Health Center 	Internal Medicine 	Haaerstown 	x
Peprah 	Koduah 	MD 	Internal Medicines Physicians, P.A 	Internal Medicine 	Hagerstown 	x
Correces 	Jerri 	l 	MO 	Jerry l. Correces, MO PC 	Internal Medicine 	Hagerstown 	x 	x
Waseem 	M. 	Khalid 	MD 	Khalid M. Waseem, MD 	Internal Medicine 	Haaerstown 	x 	x
Malik 	Zafar 	M 	MD 	Malik & Qadir, PA 	Internal Medicine 	Boonsboro 	x 	x

u.1i(" 	FIi;St::
Bansal 	Rina
Shafi 	Manzar
Brull 	Robert
HatiebelfL 	Steven
Krishnamoorthy 	Mahesh
McDougal 	Dan
Sluder 	Colleen
Chan 	Samuel
Pasha 	Tanvir
Brown-Tisdale 	Chuckia
Bonham 	Brian
Brown 	Gail
Cantone 	Vincent
Henderson 	Laura
Kerns 	William
Reed 	John
Reeves 	Inez
Sukumar 	Minakshi
Anadu 	Juliet
Gomez Prosper 	Laura
Koso-Thomas 	Marion
Ngwana-Mondoa Theresa
Ni9.am 	Madhu
Rost 	James
Uddin 	Zia
Johnson 	William
Mishra 	Tanuia
Romanic 	Branislav
Exhibit 2 	7
TriState Physicians and Physicians with WCHA Privileges
Mldc!I,~':> ':"ITIU~'5Tl,' 	f'hyslc~ns pracUce Group -rpeclalty~D.rJP~IOn~~---1 ::~ IWCHSI I 	I TriState I Other
".::::: 	': 	.::'. ' : 	" , 	" : 	" ";" 	Hosp; 	employee 	TriState, Contracted Hasp, Prlv.
.. ".'. 	""'< .. ,.;. 	, 	' 	" 	/: 	Member,
MD
J. 	MD
MD
L 	MD
MD
H. 	MD
DO
MD
MD
Nicole 	MD
Kent 	MD
M. 	MD
MD
E. 	MD
B. 	MD
P 	MD
V 	MD
MD
Ifeoma 	MD
MD
MD
E 	MD
MD
Robert 	MD
MD
H. 	MD
MD
S. 	MD
ManzarJ. Shafi. MD .. PA 	IInternal Medicine 	I Hagerstown 	x
ManzarJ. Shafi. MD., PA 	Iintemal Medicine 	IH~erstown
Robert Brull, MD. PA 	ilnternal Medicine 	IHagerstown
Robinwood Internal Medicine 	/Internal Medicine 	I Hagerstown
Robinwood Internal Medicine 	I Internal Medicine 	I Hii!Q!!rstown
Robinwood Internal Medicine 	/Internal Medicine 	IHagerstown
Robinwood Internal Medicine 	linternal Medicine 	I Hagerstown
Samuel Chan, MD 	/Internal Medicine 	I Hagerstown
TanvirA. Pasha. MD 	IInternal Medicine 	IH~erstown
Women's Specialty Associates 	!Internal Medicine 	I Hagerstown
Smithsburg Family Medical Center 	I Internal Medicinel 	ISmithsburg
Pediatrics
Smithsburg Family Medical Center 	I Internal Medicine!
Pediatrics
Smithsburg Family Medical Center 	IInternal Medicine!
Pediatrics
Smithsburg Family Medical Center 	Iintemal Medicinel
Pediatrics
Smithsburg Family Medical Center 	Iinternal Medicinel
Pediatrics
Smithsburg Family Medical Center 	!Internal Medicinel
Neonatology Associates. PC
Neonatology Associates. PC
NeonatolQIDI. Associates. PC
NeonatolQIDlAssociates. PC
Neonatology Associates. PC
Neonatology Associates. PC
Neonatology ASSOCiates. PC
Neonatology Associates, PC
NeonatolQ9i' Associates. PC
Kid~ C~'lter ()f Ha9.,erstown
Kidn~y Center of Hagerstown
Kidney Center gf Hagerstown
Pediatrics
Neonatal/Perinatal
Medicine
NeonatallPerinatal
Medicine
Neonatology
NeonatolQIDI.
NeonatolQ9Y,
Neonatol()gy
Neonatology
Neonatology
Neonatology
Nephrology
Nephrol~
Nejlhrolo,ID'
Smithsburg
Smithsburg
Smithsburg
Smithsburg
Smithsburg
Hagerstown
Hagerstown
Hagerstown
H~erstown
H~erstown
Hagerstown
Hagerstown
Hagerstown
Hagerstown
H~erstown
H~erstown
Hi!gerstown
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x 	x
x 	x
x 	x
x 	x
x
x
x 	x
x 	x
x 	x
x 	x
x 	x
x 	x
x 	x

Exhibit 2 	8
TriState Physicians and Physicians with WCHA Privileges
4-s~ !~~~';~:;G'J~;, •• ""J~~le ',1'';;' TItle ,<;,:r'j ~;i;i:;ebri\l;'!lris Practlce'$~up' ..' ." SpeclaltyDes~rlption" ~'tr,:<>:'<:3{ WCIiA 	WCHSI" .,":: 	, TriS~~ 	Other
..
::~, 	>. :;::)";' '~,j2;;t<':;~:'<'::: .•',\ ';:;i;;: , ... . ,'>::<'::::;'Y': 	"'.; ;::;:if 	':/', ..H~:!Zr; '''!11ploy~, . TriStlitlt' :gPJ1.tra~,~~ Hosp. Prlv.
.. '. 	.. ',' 	. 	.Member 	. ""<
Adler 	Oscar 	MD PhD Meadow Kidney Care 	NephroloQY 	Haaerstown 	x
Nahar 	Anita 	MD 	Meadow Kidney Care 	NephrolQgi' 	Hagerstown 	x 	x
Roza 	Eli 	MD 	Meadow Kidney Care 	Nephrology 	HaQerstown 	x 	x
Welch 	Paul 	G. 	MD 	Meadow Kidney Care 	NephroloQY 	Haaerstown 	x 	x
Khan 	Mehrullah 	MD 	Antietam Neurology Center, PA 	NeuroloQ}' 	Haoerstown 	x 	x
Anwar 	Sam ina 	MD 	Neurology Consultants, PA 	Neurology 	Haaerstown 	x 	x
Furlow 	Thomas 	W 	MD 	Parkway Neuroscience and Spine 	Neurology 	Hagerstown 	x 	x
Institute
Dave 	Prafull 	K 	MD 	Prafull K Dave, M.D. 	Neurology 	x
Mir 	Sarim 	MD 	Sarim R Mir, MD, PA, Inc. 	Neurology 	Haoerstown 	x
Ali 	Jamal 	MD 	Tristate Neuroloov Center 	NeuroloQY 	Haaerstown 	x 	x
Caruso 	John 	Robert 	MD 	Parkway Neuroscience and Spine 	Neurosurgery 	Hagerstown 	x 	x
Institute
Holmes 	Brian 	MD 	Parkway Neuroscience and Spine 	Neurosurgery 	Hagerstown 	x 	x
Institute
O'Malley 	Neil 	P. 	MD 	Parkway NeurOSCience and Spine 	Neurosurgery 	Hagerstown 	x 	x
Institute
Radley 	Michael 	G 	MD 	Parkway Neuroscience and Spine 	Neurosurgery 	Hagerstown 	x 	x
Institute
Sachariah 	K. 	George 	MD 	K. George Sachariah, M.D. & 	Nuclear Medicine 	Hagerstown 	x 	x
Associates, PA
Maoram 	Martin 	Y. 	MD 	Martin Y. MaQram, M.D. 	Nuclear Medicine 	Haaerstown 	x 	x
Reba 	Richard 	C. 	MD 	Richard Reba M.D. 	Nuclear Medicine 	Frederick 	x
Hudson 	Chad 	MD, PhD Comprehensive Women's Care 	OB/GYN 	HaQerstown 	x 	x
Kothari 	Mitesh 	MD 	Comprehensive Women's Care 	OB/GYN 	Haaerstown 	x 	x
Oh 	Andrew 	J. 	MD 	Comprehensive Women's Care 	OB/GYN 	Haaerstown 	x 	x
Solbem 	David 	H. 	MD 	Comprehensive Women's Care 	OB/GYN 	Haaerstown 	x 	x
Marlaer 	Georae 	E., Jr. 	MD 	George E. Manger, Jr., MD PA 	OB/GYN 	Hagerstown 	x 	x
Rider 	Lvnn 	A. 	MD 	Lynn A. Rider, MD, PA 	OB/GYN 	HaQerstown 	x 	x
Ginter 	Hilary 	W 	MD 	Mid-Atlantic Women's Health Center OB/GYN 	Hagerstown 	x 	x
Greenberg 	Jay 	B. 	MD 	Mid-Atlantic Women's Health Center OB/GYN 	Hagerstown 	x 	x
Tramontana 	Ann 	M. 	MD 	Mid-Atlantic Women's Health Center OB/GYN 	Hagerstown 	x 	x
Rosenshein 	Neil 	B. 	MD 	St. Paul Place Specialists 	OB/GYN 	Baltimore 	x 	x

I.<Ist first 	~JMlddl~,,'~>:~£?~~e,
Andele 	Adjoavi (Bella) 	Fakonam 	IMD
Hamilton 	William 	elMO
Riddell 	Scott 	Robert 	IMD
Smith 	Gary 	W. 	IMD
Mullick 	Jowheri 	MD
Fanale 	Jack 	Michael 	IMD
Bergman 	Erik 	A. 	IMD
Henrv 	John 	Christopher IMD
Patel 	Chetankumar 	Bhikhubhai 	IMD
Wroblewski 	John 	J. 	IMD
Edmonds 	Craig 	MD
Keener 	Wilmer 	J. 	IMD
Facchina 	Stephen 	MD
Danziger 	Peter 	F. 	IMD
Tash 	Dara 	MD
Pames 	Robert 	E. 	MD
Glaser 	Stephen 	R 	MD
Jensen 	Allison 	MD
Nelson 	Howard 	DDS
Pike 	Jon 	DDS
Russell 	W. Dean 	DDS
Zwack 	William 	DDS
Pearlman 	Jeffrey 	DDS
Behan 	Richard 	L. 	DDS
Koterwas 	Gary 	E. 	DDS
Exhibit 2
TriState Physicians and Physicians with WCHA Privileges
I'.··· p:~~~~~:~~":praC!~I\f~~P:. ..lspeCj~j$fr.PUO; ';:I~7:.: ...
Women's Health Center at 	IOB/GYN 	I Hagerstown
Robinwood
Women's Health Center at
Robinwood
Women's Health Center al
Robinwood
Women's Health Center at
Robinwood
Women's Specialty Associates
Bergman Eye Associates
Bergman Eye Associates
Cumberland Valley Retina
Consullants, PC
Cumberland Valley Retina
Consultants, PC
Hagerstown Eye Specialists
Hagerstown Eve Specialists
Ludwick Eye Center
Peter F. Danziger, MD, PA
Retina Center of Westerri .Maryland
Robert E. Pames, M.D., L.L.C.
Associated Oral & Maxillofacial
Surgeons
Associated Oral & Maxillofacial
Surgeons
Associated Oral & Maxillofacial
Surgeons
Associated Oral & Maxillofacial
Surgeons
Jeffrey Pearlman, D.D.S.
Oral & Facial Surgerv
Oral & Facial Surgerv
OB/GYN
OB/GYN
OB/GYN
OB/GYN
OB/GYN
Ophthalmology
QIlllthall'Tl9logy
Ophthalmology
Ophthalmology
Ophthalmology
Ophthalmology
Ophthalmology
Ophthalmology
Ophthalmology
~hthalmology
QIlI11halmology
Ophthalmology
Oral & Maxillofacial
S~
Oral & Maxillofacial
Surgery
Oral & Maxillofacial
Surgery
Oral & Maxillofacial
Surgery
Oral Surgery
Oral Surgery
Oral Surgery
Hagerstown
Hagerstown
Hagerstown
Haaerstown
Hagerstown
Hagerstown
Hagerstown
Hagerstown
Haaerstown
Hagerstown
Chambersburg, PA
Hagerstown
Hagerstown
Haaerstown
Hagerstown
Martinsburg
Martinsburg
Hagerstown
Haaerstown
Haaerstown
Haaerstown
9
WCHA,\·.·'WCHS'··'·I ~~C 	I TriState I. Other
. H.OSP,.'·.:·' .'... '!11.... p. 10..¥~ .·.·.Tr!State.·g~n~9tMtt~sP. Priv.
. Prill.' '. > ': 	. .' 'Member
x 	x 	x
x 	x 	x
x 	x 	x
x 	x 	x
x 	x 	x
x
x 	x
x 	x
x
x 	x
x 	x
x 	x
x
x
x
x 	x
x
x
x
x
x
x
x
x 	x
x 	x

Exhibit 2 	10
TriState Physicians and Physicians with WCHA Privileges
L.ast> "» 	' F~g;;l"/ ';'< ,'( Middle'" 	ntle ' ' 	;~';;~hyslcian~ p~ctice,Gr9up:,~,;, ~peClaItyO.es~rlptll)JI' c:if¥
;F~~ W¢HSL 	' .;, 	TfiSfate 	Other	
'>:,,' 	,",: ' yJ :.: ~ ~
, >; ,; ".""';,,,'., 	/.~}'(';s~ 	.,' ""', {;"; "" 	'}i 	elllp,Ip:y,~> :rrl§~te Contrttctcid HO$p~ Pr~,.	
>, 	';,"/j'< 	".:.<. 	Mt.mbitr '"	Kramer 	Richard 	E. 	DDS 	Oral & Facial Surgery 	Oral Surgery 	Haaerstown 	x 	x
Rothen 	Roberta 	L. 	MD 	Center for Joint Surgery & Sports 	Orthopaedic Surgery 	Hagerstown 	x 	x
Medicine
Salvagno 	Ralph 	T. 	MD 	Center for Joint Surgery & Sports 	Orthopaedic Surgery 	Hagerstown 	x 	x
Medicine
Amalfitano 	Thomas 	G 	MD 	Mid-Atlantic Orthopaedic Specialists, Orthopaedic Surgery 	Hagerstown 	x 	x
PC
Cirincione 	Robert 	J. 	MD 	Mid-Atlantic Orthopaedic Specialists, Orthopaedic Surgery 	Hagerstown 	x 	x
PC
Edwards 	Bruce 	N. 	MD 	Robinwood OrthopediC Specialists 	Orthopaedic Surg~ry 	Haaerstown 	x 	x
Holobinko 	Joseoh 	Newton 	MD 	Robinwood Orthopedic Specialists 	Orthopaedic Surgery 	Hacierstown 	x 	x
Patterson 	Donald 	A. 	MD 	Robinwood Orthopedic Soecialists 	Orthopaedic Surgery 	Haaerstown 	x 	x
Winslow 	Michael 	A. 	MD 	Robinwood Orthopedic Specialists 	Orthopaedic Surgery 	Haaerstown 	x 	x
Worrell 	Scott 	P. 	MD 	Robinwood Orthooedic Specialists 	Orthopaedic Su~ 	Hagerstown 	x 	x
Brooks 	Robert 	L. 	MD PhD Washington County Hospital 	Orthopaedic Surgery 	Hacierstown 	x
Milford 	Richard 	S. 	MD 	Mid-Atlantic Orthopaedic Specialists, Orthopaedic Surgery, 	Hagerstown 	x 	x
PC 	Hand
Stowell 	Michael 	T. 	MD 	Mid-Atlantic OrthopaediC Specialists, Orthopaedic Surgery, 	Hagerstown 	x 	x
PC 	Hand
Sherman 	Garv 	M. 	MD 	Robinwood Orthopedic Specialists 	Orthopaedic Surgery. Ha Haaerstown 	x 	x
Suoernavaae 	Charles 	J. 	MD 	Charles J. Suoernavaae. MD. PC 	Otolarvngology 	Haaerstown 	x 	x
Manilla 	Anthony 	Christopher 	DO 	Cumberland Valley ENT Consultants Otolaryngology 	Hagerstown 	x 	x
McMahon 	Steven 	J. 	MD 	Cumberland Valley ENT Consultants Otolaryngology 	Hagerstown 	x 	x
Saylor 	Michael 	J. 	MD 	Cumberland Valley ENT Consultants Otolaryngology 	Hagerstown 	x 	x
Wathne 	Jarl 	T 	MD 	Cumberland Valley ENT Consultants Otolaryngology 	Hagerstown 	x 	x
Bandy 	Bibhas 	C. 	MD 	Hagerstown Ear, Nose & Throat 	Otolaryngology 	Hagerstown 	x 	x
Associates
Olenczak 	John 	Edward 	MD 	Mid-Atlantic Orthopaedic Specialists, Pain Management 	Hagerstown 	x 	x
PC
EI-Mohandes 	Ali 	MD 	The Spine Center at the Center for 	Pain Management 	Hagerstown 	x 	x
Pain Management

last, 	First: . 	7·IMidd,-'-:T::ITftI",<>J·
Loev 	Marc 	A 	MD
Demosher 	Chris 	J, 	MD
Mire 	Gary 	M. 	MD
Newby 	John 	G 	MD
O'Donoohue 	Michael 	J. 	MD
Amponsem 	Anthony 	Amankwa 	MD
Athey 	Kristina 	A. 	MD
Dwyer 	Ruth 	Choate 	MD
Oakley 	Julia 	D 	MD
Weaver 	Leon 	D. 	MD
Saif 	Naheed 	F. 	MD
Khan 	Shafaat 	u. 	MD
lafolla 	Ayne 	Kimberly 	MD
Mustafa 	Mahmoud 	A. 	MD
Obidi 	Chukwuemeka 	MD
Masood 	Saaib 	MD
Dawis 	Maria 	A~lIles 	MD
Shinaishin 	Ahmed 	MD
Strauss 	Albert 	J 	MD
Becker 	M. 	Douglas 	MD
Budi 	Atchuthanand 	MD
Shuster 	Paul 	E 	MD
Weiss 	Robert 	E. 	MD
Collins 	Gary 	Joseph 	MD
Sullivan 	Daniel 	J. 	MD
Efobi 	Ngozi 	Juliet 	MD
Yacyk 	Mark 	J 	DO
Exhibit 2
TriState Physicians and Physicians with WCHA Privileges
'PIlYSlclan,s Pl!!l:tlte~l1l~p'
<\<,,' J;" 	'"«'.~':)~};'.'
The Spine Center at the Center for
Pain Management
John G. Newby, MD, PC
John G. Newby, MD, PC
John G. Newby, MD. PC
John G. Newby, MD. PC
Anthonv Amponsem, M.D.
Antietam Pediatric & Adolescent
Care
Antietam Pediatric & Adolescent
Care
Antietam Pediatric & Adolescent
Care
Antietam Pediatric & Adolescent
Care
Clinic for Children, PA
Hagerstown Pediatrics
Neonatology Associates, PC
Partners in Pediatrics
Partners in Pediatrics
The Children's Doctor
The Children's Doctor, LLC
The Children's Doctor, LLC
The Children's Doctor, LLC
Weiss, Becker & Shuster
Weiss, Becker & Shuster
Weiss, Becker & Shuster
Weiss, Becker & Shuster
Parkway Neuroscience and Spine
Institute
Parkway Neuroscience and Spine
Institute
Physical Medicine Specialists
Physical Medicine Specialists
'/
Sp.,cll!lty[)e!ic~pyo~'lqltY ,., •..• '...
Pain Management
Pathology
Pathology
PatholQQY.
Pathology
Pediatrics
Pediatrics
Pediatrics
Pediatrics
Pediatrics
Pediatrics
Pediatrics
PediatriCS
Pediatrics
Pediatrics
Pediatrics
Pediatrics
Pediatrics
PediatriCS
Pediatrics
Pediatrics
Pediatrics
Pediatrics
Physical Med'!
Rehabilitation
Physical Med.!
Rehabilitation
Physical Med.!
Rehabilitation
Physical Med.l
Rehabilitation
Hagerstown
Haaerstown
Haaerstown
Haaerstown
Haaerstown
Haaerstown
Hagerstown
Hagerstown
Hagerstown
Hagerstown
Haaerstown
Haaerstown
Haaerstown
Haaerstown
Hagerstown
Haaerstown
Haaerstown
Haaerstown
Hagerstown
Haaerslown
Haaerstown
Haaerstown
Haaerstown
Hagerstown
Hagerstown
Hagerstown
Hagerstown
11
'.;I:jf~~·I:jI:~;i~~\I'.··MTti~tabe.t!il,I·C;~~~~Qd 1'1;:~i~.•.. ·PrlV..'; ';' ';. 	em 	r·;·· :,.i.; . . 	. ..
x 	x
x 	x
x 	x
x 	x
x 	x
x
x 	x
x 	x
x 	x
x 	x
x 	x
x
x
x 	x
x 	x
x 	x
x 	x
x
x 	x
x 	x
x 	x
x 	x
x 	x
x 	x
x 	x
x
x 	x

Exhibit 2 	12
TriState Physicians and Physicians with WCHA Privileges
Last,:; .•·.·· ··;«I~I~PcI1~IClaI1S;p,.¢tice.Group:.· '. Sp~iaJi:yiQ~r,lptIOIl . 	I'·}rl$tate I Other
-'. 	- 	.... "')':);'+' 	··~,.··t~: 	':f:..• :;;;~;· 	··~~~~~~•• g~lnIcted Hosp.·Prlv.
Kosuri 	Ramakrishna 	R
Albertoli 	James 	S.
Herrera 	Aryeh 	L
Garazo 	Henry
Dimercurio 	Salvatore
Michaels 	Daniel 	D.
Sanicola 	Charies 	P.
Sanicola 	Karen 	F.
Harrison 	Todd 	A.
Herman 	Dale 	S.
Roemer 	Mark 	A.
Rosenthal 	Betsy 	F
Smith 	Gregory 	A.
Holdawav 	Peter 	J
Seliaman 	Garrv
Waqner 	Matthew
Zerla 	Aurelio 	S.
Jurand 	Joseph 	A.
Bover-Patrick 	IJudith
CarrHI 	IJohn
Relacion 	IVai erie
Kurz 	I Corriene
Gonzalez-Cawlevl David
Fawaz 	IJamal
MD 	IRobinwood Orthopedic Specialists 	I Physical MedJ
MD
MD
MD
MD
DPM
DPM
DPM
DPM
DPM
DPM
DPM
DPM
DPM
MD
MD
MD
MD
MD
MD
MD
MD
MD
MD
Allegheny Center Reconstructive
Surgery
Allegheny Center Reconstructive
Surgery
Plastic Surgery Services
Salvatore DiMercurio, MD, PA
Daniel D. Michaels, DPM. MS, LLC
Rehabilitation
Plastic Surgery
Plastic Surgery
Plastic Surgery
Plastic Surgery
Podiatry
Drs. Charles P. & Karen F. Sanicola.IPodiatry
DPM, PA
Drs. Charles p" & Karen F. Sanicola, IPodiatry
DPM, PA
Podiatry Associates of Hagerstown IPodiatry
Podiatry Associates of Hagerstown IPodiatry
Podiatry Associates of Hagerstown I Podiatry
Podiatry Associates of Hagerstown IPodiatry
Podiatry Associates of Hagerstown IPodiatry
Scotland Podiatric
Behavioral Health Services
Behavioral Health Services
Behavioral Health Services
Behavioral Health Services of
Washington County
Brooklane Health Services
Brooklane Health Services
Brooklane Health Services
Corriene V. Kurz. MD
David Gonzalez-Cawley. MD
Jamal Fawaz, MD
Podiatry
P§i'.chiatrv
Psychiatry
P~hisllY.
Psychiatry
P§Y.chialrv
P~_cI1iallY.
Psychiatry
Psychiatry
Psychiatry
Psychiatry
Hagerstown 	x 	x
Hagerstown 	x
Hagerstown 	x
Hagerstown 	x 	x
HaQerstown 	x 	x
Hagerstown 	x 	x
Hagerstown 	x 	x
Hagerstown 	x 	x
Hagerstown 	x 	x
Hagerstown 	x
Hagerstown 	x 	x
Hagerstown 	x 	x
Hagerstown 	x 	x
Hagerstown 	x
Hagerstown 	x 	x 	x
Hsoerstown 	x 	x 	x
Hagerstown 	x 	x 	x
Hagerstown 	x
Haoerstown 	x 	x
Hagerstown 	x 	x
Hagerstown 	x 	x
HaQerstown 	x 	x
HaQerstown 	x 	x
HaQerstown 	x 	x

LasL<,,/;.
Latif
Prescott
Egan
Patel
Fox
Wooster
Ahmed
Alencherry
Iqbal
Waheed
Cornell
Norouzi
Citro
Hauser
Mazzei
Zimmerman
Bean
Diehl
Hesley
Marinelli
Murthv
Muthiah
Rossini
Saba. III
Vu
Aarawal
Chow
Hsu
Johnson
Leimkuhler
Smith
Exhibit 2
TriState Physicians and Physicians with WCHA Privileges
First.
I Middle ':~~~n~f\-~ifd .. rhYS';~J~"27.~~,~r~up:.:, .\ '........ '....,;: ~
Mohammaed
William
James
Daksha
Amv 	Jo
L. 	Dwight
Kalim
Johny 	P
Shaheen
Abdul
Dan 	R
Ebrahim
Francis 	J.
Craig 	Michael
Robert 	E.
Gregorv 	S
Marchelle 	June
Sleven 	L.
Kerri
Paul 	C.
Narasim
Annamalai{Annam)
Michael 	(V
Georlle 	IP
TrunQ 	10.
Gautam
Lawrence 	ChanQ-Lun
Ravmond 	M.
GreQorv 	Llovd
Melissa 	Mav
Christopher 	Leon
MD 	IMohammed Z. Latif, MD 	I Psychiatry
MD 	IWiliiam G. Prescott, MD 	IPsychiatry
MD 	Ip~
MD 	IP§ychiatry
PhD 	(Psychology
MD 	IDrs Newman, Wooster, Kass, 	IPulmonary Rehab
Bradford & McCormack PA
MD
MD
MD
MD
MD
MD
MD
M.D.
DO
MD
MD
MD
MD
MD
MD
MD
MD
MD
MD
MD
MD
MD
MD
MD
Pulmonary Consultants of
Hilgerstown
Pulmonary Consultants of
Hagerstown
Pulmonary Consultants of
Hagerstown
Pulmonary Consultants of
Hagerstown
John R. Marsh Cancer Center
John R. Marsh Cancer Center
Associated Radiologists. PA
Associated Radiologists, PA
Associated Radiologists, PA
Associated Radiologists, PA
Associated Radiologists, PA
Associated Radiologists, PA
Associated Radiologists, PA
Associated RadiologiSts. PA
Associated Radiologists. PA
Associated Radiologists, PA
Associated Radiologists, PA
Associated Radiologists. PA
Pulmonary Rehab
Pulmonary Rehab
Pulmonary Rehab
Pulmonary Rehab
Radiation OncolQID'.
Radiation OncolQ9Y
Radiology
RadiolollY
Radiology
RadiolQ~
Radiology
Radiology, Diagnostic
Radiology, Diagnostic
Radiology, Diagnostic
Radiology, Diagnostic
Radiology. Diagnostic
RadiolollY, Diagnostic
Radiologv, Di~nostic
RadiolQ~gnostic
Radiolo~i?gnostic
Radiology. Diagnostic
Radiology. Diagnostic
RadioloQY. Diagnostic
Radiology, DiClQnostic
RadicliogYLPiagnostic
Hagerstown
Hagerstown
Hagerstown
Hagerstown
Hagerstown
Hagerstown
Hagerstown
Hagerstown
Hagerstown
Hagerstown
Haaerstown
Hagerstown
Hagerstown
Hagerstown
Hagerstown
Haaerstown
Haaerstown
Haaerstown
Hagerstown
Hagerstown
Haaerstown
13
x 	x
x 	x
x 	x
x 	x
x
x 	x
x 	x
x 	x
x 	x
x 	x
x 	x
x
x 	x
x
x 	x
x 	x
x
x 	x
x 	x
x 	x
x 	x
x 	x
x 	x
x
x 	x
x
x
x
x
x
x

La.,t
Klein
Howell
Chomiak
Radecki
ChaudhrY
Dennis
Hackett
McWilliams
Talton
Hassoun
Roaers
Exhibit 2 	14
TriState Physicians and Physicians with WCHA Privileges
IFlrs~::iSU"'~" 1	~!~tle, /eJte~::::r TF~~'CJa:~;~,~p~ce; Group
Steven 	IJ 	MD 	Malamet & Klein. MD. PA
Mary 	MD
Paul 	N, 	MD 	The Center for Chest Disease
Kevin 	Michael 	MD 	The Center for Chest Disease
M, 	RafiQue 	MD 	The Urological Center
Patrick 	J. 	MD 	The Urological Center
Kevin 	C. 	MD 	The Urological Center
Wavne 	A, 	MD 	The Urological Center
Hugh 	J, 	MD 	The UrolQgical Center
Heitham 	Talal 	MD 	Heitham Hassoun. M,D.
John 	Paul 	MD 	Wound Center
~pe.c"'ltyDe~rlptJOri
~'::~~F~!):',~':' ,". ,'. ~<t:~.~,g, ,~."
Rheumatology
Rheumatology
Surgery. Thoracic
Surg~ry L Thoracic
Urology
Urology
Urology,
Urology
UroloQV
Vascular Su~~
Wound Care
ICIlY); 	\ 	, ,; ;"1 WCHA I VtlCHSI 'I' , , 	"I Tri~tate I Other
Y;j&!:::';,;~;H;,~::...~~e~¥~r ,~:~:~~~cted HosP· Prlv.
Hagerstown 	x 	x
x
Haaerstown 	x
Hagerstown 	x
Haaerstown 	x 	x
Haaerstown 	x 	x
Hagerstown 	x 	x
Haaerstown 	x 	x
Haaerstown 	x 	x
Baltimore 	x
Haaerstown 	x 	x

Exhibit 	3

Exhibit 3: Washington County Health System. Inc.
WCHSI is a private, non-profit corporation formed under the laws of the
State of Maryland in 1989. WCHSI has over 3,000 employees and serves a tri-
state region, including western Maryland, southern Pennsylvania, and northern
West Virginia.
1. 	Washington County Hospital Association C4
WCHA") - a private, non-
profit, membership corporation formed under the laws of the State of Maryland operating
an acute care hospital, WCH, and related facilities located in Washington County,
Maryland. WCH opened in 1904 on Potomac Avenue in northern Hagerstown, with a
complement of ten beds and a medical staff of six members.
WCHA provides hospital and healthcare services to the citizens of Washington
and Frederick Counties in Maryland, Franklin and Fulton Counties in Pennsylvania, and
Morgan, Jefferson and Berkeley Counties in West Virginia. WCHA is currently licensed
to operate 292 beds to include 218 medical/surgical. 18 obstetric, 10 pediatric, 18
psychiatric, and 28 acute rehabilitation. WCH offers inpatient and outpatient services
including adult medical/surgical care, obstetrics and newborn care (including a family
birthing center), cardiac catheterization, comprehensive inpatient and outpatient
rehabilitation, radiologic/diagnostic services, inpatient and outpatient mental health
services, a regional Level III Trauma Center, an intensive care unit, a progressive care
unit, a coronary care unit and a pediatric inpatient unit.
WCH is home to the Center for Joint Replacement, an innovative three-day
program for hip and knee joint replacement which involves a team approach to education,
care and recovery, and the John R. Marsh Cancer Center which provides ambulatory
cancer therapy with 18,000 patients visits annually including chemotherapy, infusion
therapy, blood transfusions and radiation seed treatments.
Other specialty services include: The Gynecologic Center of Western Maryland,
providing evaluation and treatment services by a nationally recognized expert in
gynecologic cancers and a pioneer in the field; comprehensive rehabilitation services,
providing a full range of rehabilitation programs across service levels with locations at
the Hospital, the Robinwood Medical Center campus, and its Health@Work facility on
the west end of Hagerstown; behavioral health services including an Employee
Assistance Program; and, mental health services for every age including adult inpatient
programs at the Hospital and outpatient services. Specialty at-home services include
"Care at Home", a fee-for-service personal care program, and "Home Health" for skilled
nursing, rehabilitation services and oxygen therapy_ All services are accredited by
JCAHO.
2. 	Antietam Health Services ("AHS") - a wholly owned subsidiary of
WCHSI. It was incorporated under the laws of the State of Maryland in 1985 as a for-
profit corporation. Antietam has been involved in the development and operation of
specific business enterprises related to the provision of outpatient healthcare that

complement the goals and objectives ofWCHSI, including medical retail, home medical,
corporate health and management services. Antietam's business units include joint
ventures, contractual management arrangements and direct ownership of businesses plus
development and management of the Robinwood Medical Center.
Robinwood is an approximately 373,000 square foot outpatient facility located 3.2
miles from WCH. Robinwood is designed to provide comprehensive, state-of-the-art
health care in a comfortable, relaxed environment. The facility offers patients "one-stop
shopping" where they can access many services all at the same location. The Robinwood
facility is organized under a condominium regime. Unit owners include WCHA and
various private providers of health care services, including physicians and dentists. The
facility houses physician practices owned by WCHA and AHS. WCHSI owns
approximately 44% of the Robinwood Medical Center square footage directly through its
various subsidiaries or their business units.
As a fully-integrated health care delivery system, WCHSI has numerous business
units and joint ventures affiliated with WCHA or AHS. A summary of these units
follows:
ENTITY 	AFFILIATION 	DESCRIPTION
Behavioral Health Services 	WCHA 	Employee Assistance Program, Alcohol and Drug
Program, employed physicians, psychologists and
counselors, inpatient and outpatient services
Cardiac Diagnostic Center 	WCHA 	Located at Robinwood
Robinwood Endocrinology 	WCHA 	Robinwood tenant. Employed endocrinologist
and comprehensive diabetes education center.
Home Health Care 	WCHA 	Private duty, nursing, and rehab care in home.
Located off-site on Howell Road.
Maryland Neuro Rehab 	WCHA 	Inpatient and outpatient day program at
Foundation 	Robinwood for brain and spine injury recovering
patients.
Robinwood MRI 	WCHA 	Located at Robinwood; open MRI.
Total Rehab Care at Robinwood 	WCHA 	Physical/Occupational/Speech!Aqua therapy.
Urgent Care at Robinwood 	WCHA 	Located at Robinwood
Urgent Care at Pennsy Ivania Ave. 	WCHA 	Located on north end of Hagerstown.
Women's Health Center at 	WHCA 	Located at Robinwood. Five employed OB/GYN
Robinwood 	physicians and five employed nurse midwives.
Chiefly serve the underserved population.
WCH Trauma Physicians 	WCHA 	Nine contracted trauma surgeons to provide 2417
trauma coverage.

ENTITY 	AFFILIATION 	DESCRIPTION
Hagerstown Medical Lab 	AHS 	Full service reference lab with ten draw stations
in Washingion County and one in Frederick
County plus staff and serve the Hospital.
Medical Practices of Antietam 	AHS 	Employ primary care physicians in 6 offices (2 at
Robinwood, 2 in Hagerstown, and 1 each in
Williamsport and Smithsburg), plus a
gastroenterology and a gynecology/women's
primary care practice.
Home Care Phannacies 	AHS 	Full service retail pharmacies with six locations in
Washington County including at the Hospital.
Robinwood Infusion Pharmacy 	AHC 	Located at Robinwood.
Equipped for Life 	AHS 	Full service DME company with four locations in
Washington County and one in Chambersburg,
PA.
Health@Work, LLC 	AHS 	Located on Downsville Pike on the west end of
Hagerstown, provides corporate clients with
occupational medicine, industrial medicine rehab,
EAP services, drug screenings, employee
physicals, and on-site medical clinics.
Diagnostic Imaging Services, 	AHS-50% 	Joint venture with locations at Robinwood-
LLC 	including Women's Imaging Center - and at
Eastern Boulevard in Hagerstown, site of
numerous private physician offices.
Robinwood Surgery Center, LLC 	AHS-68% 	Joint venture located at Robinwood with six OR's
and four special procedure rooms. Employs
anesthesiologists and CRNA's.
Endoscopy Center at Robinwood 	AHS-owned 	Joint venture located at Robinwood with four
50% by Surgery 	endoscopy suites.
Center
Mid-Maryland Medical 	AHS-33.3% 	Joint venture ground ambulance company serving
Transport, LLC 	Washington and Frederick Counties. Other
owners are Frederick Memorial Health System
and Valley Regional Enterprises in Winchester,
VA.
Western Maryland Medical 	AHS-50% 	Joint venture DME company. Equipped for Life
Supply. LLC 	is managing partner. Other owner is Western
Maryland Health System in Cumberland,
Maryland, about 75 miles west of Hagerstown.
3. 	Maryland Physicians Care -WCHA owns 25% of Maryland Physicians
Care, a Maryland Medicaid HMO serving in excess of 90,000 members in Maryland and

about 9,000 in Washington County. Other partners include St. Agnes Hospital and
Maryland General Hospital in Baltimore, and Western Maryland Health System in
Cumberland, Maryland. Maryland Physicians Care also manages, on behalf of the state,
a Primary Adult Care (PAC) Program and a Medicare Advantage plan for the special-
needs, dual-eligible population in the western Maryland counties of Washington,
Allegheny, and Garrett. Currently, there is no formal affiliation between TriState and
MPC; however, there are discussions regarding the sharing of, and providing access to,
claims data.
4. 	Walnut Street Community Health Center- WSCHC unti12004 was a
group of family practice physicians employed by WCHA and located about 2 miles north
of WCH in an underserved part of Hagerstown. In 2004, the Center was granted 	.
Federally Qualified Health Center status and became an independent business. WCHA
and AHS provide services to the Center, and the Center physicians are members of
TriState.

Exhibit 	4

Exhibit 4: TriState's Current Board of Directors
NAME 	CLASS 	TITLE 	SPECIALTYITITLE
Datta, Vasant MD 	I 	President 	Prim~ Care Family Practice
Hood, Stephen MD 	I 	Vice President 	Specialist Medicine - Cardiology
Grahe, Raymond A. 	II 	Treasurer 	VP Finance Hospital
McBurney, Brooks 	II 	Secretary 	VP Human Resources Hospital
Hamill, James P. 	II 	Director 	President and CEO Hospital
Brooks, Robert MD 	II 	Director 	VP Medical Affairs Hospital
Uzicanin, Ernest MD 	I 	Director 	Primary Care Family Practice - Private
Practice
Mire, Gary_ MD 	I 	Director 	Hospital Based - Pathology
Reed, John MD 	I 	Director 	Primary Care IMJPeds - Antietam
Solberg, David MD 	I 	Director 	Specialist Surgery - Obstetrics/Gynecology
Dwyer, Ruth MD 	I 	Director 	Primary Care Pediatrics - Private Practice
Zampelli, Michael 	II 	Director 	VP Antietam Health Services
Vacant (added 	1 	Director 	Specialist
612512007)

Exhibit 	5

Exhibit 5: TriState's Administrative Staff
NAME 	TITLE 	YEARS IN POSITION
Field. Allan S. 	Executive Director 	3.25
Cirincione, Robert MD 	Medical Director (contracted) 	6.5
Atkinson, Wendy 	Operations Manager 	2.75
Grant, Shelley 	Manager Care Coordination 	1
Wieland, Charissa 	External Relations Representative 	I
Shaw, Amanda 	PHO/Managed Care Specialist 	9
Metzer Guylene RN 	Case Manager 	< 1
Putnam, Marlen RN 	Case Manager 	< 1

Exhibit 	6

Exhibit 	7

Exhibit 7: Committee Membership
COMMITTEE 	NAME 	CLASS 	SPECIALTY
Nominating 	Newby, John MD - Chair 	I 	Pathology
Reed, John MD 	I 	Internal Med/Peds
Cirincione, Robert MD 	I 	Orthopaedics/Med Dir
Grahe, Raymond 	II 	VP Finance Hospital
Field, Allan S. 	N/A 	Executive Director
Contracting I Finance I 	Grabe, Raymond - Chair 	II 	VP Finance Hospital
Administration 	Hood, Stephen MD 	I 	Cardiology
Mire, Gary MD 	I 	Pathology
Reed, John MD 	I 	Internal MedlPeds
Zampelli, Michael 	II 	VPAntietam
Field, Allan S. 	N/A 	Executive Director
Wieland, Charissa 	N/A 	Staff Support - ex officio
Bylaws 	Datta, Vas ant MD - Chair 	I 	Family Practice
Malik, Zafar MD 	I 	Internal Medicine PCP
Roza, EliMD 	I 	Nephrology
Edwards, Bruce MD 	I 	Orthopaedics
Schaeffer, Michael Esq. 	II 	Hospital Attorney
Brooks, Robert MD 	II 	VPMA Hospital
Field, Allan S. 	N/A 	Executive Director
Wieland, Charissa 	N/A 	Staff Support - ex officio
Communications 	Mire, Gary MD - Chair 	I 	Pathology
Su, William MD 	I 	General Surgery
Hudson, Chad MD 	I 	Obstetrics/Gynecology
Cantone, Vincent MD 	I 	Family Practice PCP
Theriault, Maureen 	II 	Dir Public Relations Hosp
Field, Allan S. 	N/A 	Executive Director
Wieland, Charissa 	N/A 	Staff Support - ex of&io
Clinical Integration 	Reed, John MD - Chair 	I 	Internal MedicinelPeds
Oversight 	Beckwith, Matthew MD 	I 	Family Practice
Newby, John MD 	I 	Pathology
Schiro, James MD 	I 	Dermatology
Becker, M. Douglas MD 	I 	Pediatrics
Cirincione, Robert MD 	I 	OrthopedicslMedical Dir
Lowe, Robert PharmD 	I 	Home Care Pharmacy
Field, Allan S. 	N/A 	Executive Director
Grant, Shelley 	N/A 	Staff Support - ex officio
Atkinson, Wendy 	N/A 	Staff Support - ex officio
Credentialing 	Newby, John MD - Chair 	I 	Pathology
Cirincione, Robert MD 	I 	OrthopaedicslMedical Dir
Brooks, Robert MD 	VPMA Hospital
Cornell, Dan MD 	II 	Radiation Oncology
Field, Allan S. 	I 	Executive Director
Grant, Shelley 	N/A 	Staff Support - ex officio
Shaw, Amanda 	N/A 	Staff Support - ex officio
N/A

COMMITTEE 	NAME 	CLASS 	SPECIALTY
Utilization 	Schiro, James MD - Chair 	I 	Dermatology
Management/Quality 	Cirincione, Robert MD 	I 	Orthopaedics/Medical Dir
Assurance 	Becker, M. Douglas MD 	I 	Pediatrics
Baran, Mark MD 	I 	Hospitalist
Ciccarelli, Jill MD 	I 	Family Practice
Brooks, Robert MD 	II 	VPMA Hospital
Jones, Jeff MD 	I 	Cardiology
Pianta, Thomas 	II 	Dir Health Mgt Hospital
Barnhart, Steve 	II 	Exec Ops Antietam
Lowe, Robert PharmD 	II 	Home Care Pharmacy
Shea, Michael Ed.D. 	II 	Behavioral Health - Hosp
Field, Allan S. 	N/A 	Executive Director
Gervais, Mary Ellen 	N/A 	MMARS
Davis, Mitchell 	N/A 	InforMed
Grant, Shelley 	N/A 	Staff Support - ex officio
Atkinson, Wendy 	N/A 	Staff Support - ex officiO
Service Improvement 	Beckwith, Matthew MD - Chair 	I 	Family Practice
Cirincione, Robert MD 	I 	Orthopaedics/Medical Dir
Schiro, James MD 	I 	Dermatology
Baran, Mark MD 	I 	Hospitalist
Ditto, Allen MD 	I 	Family Practice
Field, Allan S. 	N/A 	Executive Director
Grant, Shelley 	N/A 	Staff Support - ex offiCiO
Atkinson, Wendy 	N/A 	Staff Support - ex dmcio
Quality Improvement 	Becker, M. Douglas MD- Chair 	I 	Pediatrics PCP
Cirincione, Robert MD 	I 	Orthopaedics/Medical Dir
O'Donoghue, Michael MD 	I 	Pathology
Hesley, Kern MD 	I 	Radiology
Krishnamoortby, Mahesh MD 	I 	Internal Medicine PCP
Qadir, Ghazala MD 	I 	Family Practice
Budi, Anand MD 	I 	Pediatrics PCP
Field, Allan S. 	N/A 	Executive Director
Pianta, Thomas 	II 	Dir Health Mgt Hospital
Grant, Shelley 	N/A 	Staff Support - ex officio
Atkinson, Wendy 	NJA 	Staff Support - ex ~JJ;cio
Pharmacy Benefits 	Lowe, Robert PharmD - Chair 	II 	Home Care Pharmacy
Management 	Cirincione, Robert MD 	I 	Orthopaedics/MedicaJ Dir
Money, Mary MD 	I 	Internal Medicine PCP
DelaportaS, Dino MD 	I 	Infectious Disease
McDougal, Daniel MD 	I 	Internal Medicine PCP
Am, Gary PharmD 	II 	Home Care Pharmacy
Berg, Mary 	II 	Exec Ops Antietam
Ellis, Denise PharmD 	II 	Home Care Pharmacy
Higgins, Sue PharmD 	II 	Home Care Pharmacy
llilker, Bobbi PharmD 	II 	Home Care Pharmacy
Wills, Terry PharmD 	II 	Home Care Pharmacy
Grant, Shelley 	N/A 	TriState Health Partners
Atkinson, Wendy 	N/A 	TriState Health Partners
Field, Allan S. 	N/A 	Executive Director

COMMITTEE 	NAME 	CLASS 	SPECIALTY
Care Coordination 	Cirincione, Robert MD -. Chair 	I 	OrthopaedicslMedical Dir
Grant, Shelley 	II 	Mgr Care Coor TriState
Pianta, Thomas 	II 	Dir Health Mgt Hospital
Wilkes, Kelsey 	II 	Dir Integ Pt Sup Svc Hosp
Whyte, Roseann 	N/A 	InforMed
Metzer, Guylene RN 	N/A 	Case Manager TriState
Putnam, Marlen RN 	N/A 	Case Manager TriState
Atkinson, Wendy 	N/A 	Ops Manager TriState
Lowe, Robert PharmD 	II 	Home Care Phannacy
Moyer, Jeanni 	II 	Total Rehab Care - Hosp
Lewis, Thorrenna 	I 	Mgr Integ Pt SUP Svc Hosp
During the fIrst quarter of Fiscal Year 2008, recruitment will continue for:
(1) at least three private practice physicians to serve on the Contracting / Finance /
Administration Committee; (2) at least two primary care physicians for the Credentialing
Committee; and (3) at least two primary care physicians for the Communications
Committee.

Exhibit 	8

Exhibit 	9

TRISTATE MEMBER
PARTICIPATING PROVIDER CONTRACT - CLINICAL INTEGRATION
This participating provider contract C'Contract") is made as of this __ day of
_____ , 200_ between Tri-State 	Health Partners, 	Inc. 	("TriState"), a Maryland
nonstock corporation, and the provider identified below ("Provider"). who is a member of
TriState.
PROVIDER:
Name: -----------------------
Address: -----------------------
Telephone Number: __________________
Medical Specialty: ____________

Exhibit 	10

Exhibit 10: Secondary Service Area PhYsicians
TriState 	Non-TriState 	Total 	TriState
PRIMARY SPECIALTY* 	Members 	Members 	Specialists 	Percentage
Addiction Medicine 	0 	1 	1 	0%
AerosIJace Medicine 	0 	1 	1 	0%
Allergy, Allergy & Immunology 	2 	4 	6 	33%
Anesthesiology 	9 	41 	50 	18%
Cardiology, Pediatric 	0 	1 	1 	0%
Cardiovascular Disease 	11 	20 	31 	35%
Critical Care, Pediatric 	0 	1 	I 	0%
Dermatology 	3 	7 	10 	30%
EmergencyMedicine, Urgent Care Medicine 	1 	53 	54 	2%
Endocrinology, Reproductive 	0 	1 	1 	0%
Endocrinology/Diabetes 	.... 	2 	5 	60%	.)
Family Practice/Geriatric Medicine 	27 	188 	215 	13%
Gastroentero logy 	6 	11 	17 	35%
General Practice 	0 	38 	38 	0%
Immunology 	0 	1 	1 	0%
Infectious Diseases 	1 	16 	17 	6%
Internal Medicine 	26 	133 	159 	16%
Neonatal-Peri-natal Medicine 	0 	9 	9 	0%
Nephrology 	3 	10 	13 	23%
Neurology - child, adult 	5 	14 	19 	26%
Nuclear Medicine 	2 	3 	5 	40%
Obstetrics & Gyne<.:oloM 	14 	47 	61 	23%
Occupational Medicine 	0 	5 	5 	0%
Oncolo~ 	4 	15 	19 	21%
OJ)hthalmo!ogy 	2 	25 	27 	7%
OrthopedicslHand Surgery/Sports Medicine 	12 	36 	48 	25%
Osteopathic Manipulative Medicine 	0 	1 	1 	0%
Other Specialty/Unspecified 	0 	24 	24 	0%
Pain Management 	3 	2 	5 	60%
Pathology 	4 	23 	27 	15%
Pediatrics 	11 	69 	80 	14%
Physical Medicine & Rehab 	4 	6 	10 	40%
Psychiatry -' child, adult 	3 	48 	51 	6%
Pulmonary Disease, Pulmonary.Critical Care 	5 	16 	21 	24%
Radiation Oncology 	1 	1 	2 	50%
Radiology 	10 	36 	46 	22%
Radiology, Vascular & Interventional 	0 	2 	2 	0%
Rheumatology 	0 	4 	4 	0%
Sleep Medicine 	0 	1 	1 	0%
Surgery, General 	8 	42 	50 	16%
Surgery, Neuro 	4 	6 	10 	40%
Surgery, Otolaryngology, Head & Neck 	6 	14 	20 	30%
Surgery, Plastic 	1 	7 	8 	13%
Surgery, Thoracic 	0 	4 	4 	0%
Surgery, Urological 	1 	19 	20 	5%
Surgery, Vascular 	0 	2 	2 	0%
TOTAL 	]92 	1010 	1202
16% 	84% 	100%
Not listed In AMA Database - Oral & Mwnl!ofacla) Surgery, PodIatry

B....o orCompedtioa
600 PcuDsylv.... Ave., N.W.
Wuhlagtoa, -D.C. 10580
David M. N81TOW
Attorney
Dlred Line (l0l) 3U-~744
E-malh d ..rrvw@ftc.gov
FAX: (l01) 3U-3384
Christi I. Braun, Esquire
Ober, Kaler, Grimes & Shriver
1401 H Street, N.W.• Suite 500
Washington. D.C. 20005-3324
UNlTED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON,D.C. ZOSIIII
January 24, 2008
RE: 	Advisory Opinion Request by TriState Health Partners, Inc.
~
Dear Ms. Braun:
This is a request for additional information concerning a proposed program by TriState
Health Partners, Inc. (''TriState'') for which you have requested an advisory opinion. According
to your letter, TriState is anon-stock membership organization incorporated in 1995. You
describe TriState as a "non..exclusivc physician-hospital orgaIiization ("PHO',)", consisting of
approximately 200 medical practitioners and one hospital located in Washington County,
Maryland. Class I members include Maryland-licensed physicians (both independently
practicing, and employed, and including oral surgeons), and medical group practices whose
physicians meet that requirement. Washington CoWlty Hospital is TriState's only Class II
member. According to your letter. TriState's proposed program "will iIitegrate its members
clinically'"
You ask for a staffadvisory opinion as to what would be '"the Co.mmission's enforcement
intentions and how would it analyze [TriState's) activities" under Section 5 of the FTC Act if. in
conj1Dlction with the physicians' clinical integration through the proposed program, TriState
"develops contract proposals that include performance bon~ negotiates contract terms
(including price), and enters into contracts with third-party payers for the sale of the integrated
product" as described in your letter. As you .are aware, the staff cannot speak: for the Commission
regarding its la:w enforcement intentions. but can only address how the staff would analyze a
particular arrangement or activity. 'and what recommendations. if any, staffwould be likely to
make to the Commission if the proposed conduct were uridertaken. In order to respond to your
request, it would be helpful if you could provide the following additional'infonilation concemmg
TriState's proposal:

Page 2 of 6
I. 	Structure and Membership
You state that TriState currently has 64 primary care physicians (''PCPS,,)I and )40
specialty care physicians ("SCPs'') practicing in 29 different medical specialties. Of these 204
total physicians, you note that 35, or about 17 percent of the total, are employed by subsidiaries of
Washington County Health System, Inc. ("WCHSr,), which also is the parent organization of
Washington County Hospital- TriState's hospital member. You note that TriState also bas
cOntracts to provide services to patients under contracts with TriState with an additional 69
physicians in 18 medical specialties who are not members of TriState. Your letter states that
there is no limit on additional.physicians joining TriState, and presumably participating in all of
its programs, including the proposed clinical integration program. It is our understanding from
your letter that all physicians currendy involved with TriState (both members and contracting
pbysicians) will be eligible to participate in the proposed program., although you anticipate that
some contracted physicians may choose not to do so. What is your most recent infonnation or
expectation as to how many of TriState's members and its contracted physicians have elected, or
will elect, to participate in the proposed program, and what is the basis for your estimate?
Other than having to execute the ''TriState Member Participating Provider Contract -.
Clinical Integratwn" (Exhibit 9 of your initial submission), what, ifany, selection or screening
mechanisms or participation requirements will TriState apply initially regarding physicians who
currently are members of, or who contract with, TriState and who seek to participate in the,
proposed program, in order to assure that they have the necessary commitment to work toward
successful achievement of the program's clinical integration goals? What will be the bases or
standards for accepting or excluding at the outset any physicians from participation? What is
TriState's basis for believing that its ph,ysician participation screening standards will assure
participation only by physicians who are committed to~ and likely to help achieve, the clinical
integration goals of TriState's proposed program?
Your letter states that "TriState has no restrictions on the addition of new Class I [i.e.,
pbysician] members." How, if at all, will physicians that ~cquently seek to join TriState's
proposed program be screened for suitability to participate in the program? Will any physicians
be denied participation in the proposed program based on numbers of physicians (either total or
specialty-based) aJready in the proposed program relative to the expected patient enrollment, or
based on other factors, such as the,.ratio of specialists to PCPs? Will there be any restrictions on
when additional physicians may joint TriState and participate in the proposed program? Has
TriState considered whether and how allowing physicians to join TriState at any time may affect
its ability to clinically integrate provision of care by TriState physicians, and the potential of the
proposed program to achieve the anticipated resulting efficiencies in providing care to patients
enrolled in the program?
Whit is the role of the Washington County Hospital, Wasrungton COWlty Hospital
Association, and the Washington County Health System, Inc. (including any of its subsidiaries.
"business units," or ''joint venture affiliates," as identified i.n Exhibit 3 of your initial submission)
in the proposed clinical integration program? What advantages (other than the hospital's $2500
Including general practitioners. family practitioners. pediatricians, and internists.

Page 3 of 6
initial matching payment for each physician who becomes a TriState member) does the
involvement of Washington County Hospital or Washington County Health System, Inc.
(including any of its subsidiaries) hold for the proposed program? Likewise, what potential
disadvantages (e.g., possible pressure'to fill hospital beds, or adopt policies that otherwise
potentially involve efficiency/utilization conflicts ofinterest) does the involvement of the hospital
and its subsidiaries pose for the proposed program's success, and how will TriState address any
such potential disadvantages?
II. 	Integration and Achievement ofEffieiencies
In your letter, you state that Tristate contracted on a capitation basis for only one year, and
that as of 1998 its operations have been on other than that basis - i.e., not involving financial risk
sharing among its physicians. What in TriState's experience supports the expectation that, absent
such financial risk-sharing among its physicians, TriState is likely to be able to achieve the
necessary high degree of interdependence and cooperation to control costs and ensure quality
among its independently practicing physicians in their provision of medical care to patients
covered under the proposed program? Does TriState have any experience under its capitation
program or otherwise in dealing with physicians who are either nonwCompliant or performing at
sub-optimallevels regarding programs or standards under which TriState has operated?
Your letter states that member physicians (but not contracting physicians) each pay a
'~oining fee" of $2.500 for participation in TriState, which payment to TriState is matched by
Washington County Hospital. Is this a new fee for existing TriState physician members to
participate in the proposed program, or is it a' pre-existing requirement for membership' in TriState
generally, that already has been paid by those physicians who currently are members, and
therefore will only apply to new TriState members? lithe latter, will there be any additional fees
charged to current TriState member physicians,who already have paid the $2,500 joining fee in
order for them to participate in the proposed program? What other financial "investment," if any,
will TriState member physicians be required to make in the proposed program (e.g., computer
hardware/software, etc.)? Will member physicians participating in the proposed program' be
requited to make any non-financial investments in the proposed program (e.g., personal
participation in program activities or committees, training of themselves and/or their office staffs,
etc.)?
Will contracting physicians (ie., those who do not beCome TriState members, but who
contract directly with a payer through TriState's messenger arrangement to provide services
under future TriState clinical integration program contracts) be required to make investments of
any kind in TriState in order to participate in the proposed program? What requirements. if any,
regarding IDT capability 8Ild participation will apply to contracting physicians? What will 	'
evidence or assure contracting physicians' commitment to successful implementation of the
proposed 'program? Describe how contractingphysiciarui will participate in all aspects of the
proposed program.. including how, operationally~ TriState will assure that the services of
contracted physicians are provided in an integrated fashion with those of TriState's member
,physicians.
What will be the nature and extent of participation by TriState member and contracting
physicians in the Clinical Integration Oversight Committee and its six su~ttees? Exhibit 7

Page 4 of 6
of your initial submission lists members of various committees and subcommittees. However.
tenns of service and future membership rotation do not appear to be addressed. Will TriState
require participation by all or certain TriState member physicians on any committees.
subcommittees, or in other organization activities regarding the perfomlance of physicians other
than themselves (i.e., relating to their interd!'J)endent, as opposed to individual, perfonnance)?
Please explain how Sections_and .ofExhibit 9 of your original submission (''TriState
Member Participating Provider Contract - Clinical Integration") are consistent with TriState's
purportedly operating as a clinically integrated joint venture of its physician members.
Given the current extensive relationship between TriState and InforMed, and the
information and support systems, technology, and ~ther capabilities already available and in use
through that arrangement, what will the proposed program be able to do or achieve that the
current arrangement involving TriState and InforMed cannot, and why? What, exactly, will occm
operationally under the proposed program that is different from, and not currently occurring
under. TriState's current operations?
In. 	Need for Joint Contracting with Payers, and Collective Determination and
Negotiation of Fees, in Order to Offer the Proposed Program
What aspects of, or programs or activities that will be part of, the proposed clinical
integration program are currently in place or operating with regard to TriState's provision of
services under its existing contracts? Please explain exactly how the proposed program will
differ from existing practices and programs of TriState. How will the proposed program. differ
from the utilization and medical management Services currently provided by TriState through its
.81Tangement with inforMed and its ClIP network?
You state in your letter that '"having the same- network for all integrated product contracts
is important to integrating the quality improvement initiatives and medical management services
into the physicians' practices." How does TriState's proposed program assure that it will have
"the same network for aU integrated product contracts?" Specifica11y~ why isn't TriState's policy
of allowing additional physicians to join TriState at any time and participate in the clinical
integration program - which necessarily will change the composition of the network --
inconsistent with this rationale? Similarly, how is allowing contracted physicians (who represent
about 2S percent (69 of273) of physicians currently participating in TriState's network programs)
to decide whether to participate in the proposed program on a contract-by-contract basis
consistent with the stated necessity of having the same physician network for all contracts in
order to achieve the network's integration and efficiencies?
TriState's proposed program anticipates that non-member (i.e., contracted) physicians will
provide services to patients covered under the program, presumably without substantial loss in the
program's clinical integration and efficiencies. Such contracted physicians, however, will not
participate in TriState's joint negotiation of contracts with purchasers and payers, but rather will
contract individually with those purchasers and payers through a messenger arrangement. If the
contracted physicians can be an integral part of the clinical integration program without joint
contracting, why can't the TriState member physicians do so as well? Similarly, you state that
having the "single integrated network" that will result from joint contracting will enable Tristate
to "reinforce its in-network referral policy, ensuring that patients stay within the TriState network
to the greatest extent possible." How is this justification consistent with using contracted
:physiciansto whom referrals will be made as part of the program. when those physicians

Page 5 of 6
participate on a contract-by-contract basis, and different contracted physicians may be
participating in each contract? Ifpatients referred to contracted physicians are part of the
integrated provision of care, and this is done without their participating in the joint contracting
process, why is it necessary for TriState to jointly contract regarding member physicians?
Conversely, if contracted physicians will not be part of the integrated provision of care under the
program, why isn't this a significant deficiency in the program's potential for achieving
efficiencies, given that contracted physicians represent a significant portion of physicians
currently participating in TriState's network programs?
In your discussion of the need for joint contracting through TriState. you state (page 29
of your initial submission) that "[a]bsent assurance of participation in TriState's contracts, and
thus a sh~ of the revenue generated by those contracts, the physicians would have less incentive
to devote substantial time" to the various activities necessary to successfully implement the
proposed program. While we understand that physicians may need to recover the opportunity
costs of their participation in a program that requires additional time and effort on their part, or
desire to make a profit from development of such a program, it is not apparent why that payment
or profit needs to come from presumably higher, jointly agreed upon. fee-for-service charge
levels by the physicians for their underlying medical services provided under the program.
Regarding the discussion in your initial submission -of a future "pay-for-performance"
component of TriState's operations, it is our understanding-that your CUIl'ent request for an
advisory opinion is not premised on an assertion of financial integration among.TriState's
physicians based on this possible future activity. However,. you state that, in order to implement
that program, "TriState believes that it will need to coUect a year or more of perfonnance data
from its physicians, showing the success of its clinical integration strategy for self-insured
employers and smaller payers. Thus, it will need to contract on a fee· for-service basis for some
period· before it is able to implement its P4P program... Ris not -clear whether you therefore are
separately asserting that such fee-for-service contracting isjustified at this time as-reasonably
necessary (i.e., "ancillary',) to implementing a financially integrated, efficiency enhancing, joint
venture among TriState physicians in the future.
IV. 	Mark~t Factors
What basis does TriState have for believing that payers or other potential customers will
be interested in contracting with TriState for the proposed program? Have any payers or other
potential customers (e.g., employers) expressed any views regarding the proposed program or
TriState's current programs and operation?
Regarding the ''non-exclusive'' participation of TriState physicians in the proposed
program, you discuss their freedom to contract individually and directly with payers. Is there any
restriction or limitation on the ability of TriState physicians to also become members of other
physician or provider networks, including other clinically integrated arrangements?
Thank you for your consideration of this request for additional infonnation. While we
have tried to be complete in our request, it nevertheless is possible that we subsequently may

Page60f 6
require some further information or clarification regarding the proposed program. If you have
any questions, please caU me at (202) 326-2744.
Very truly,
~David M. N8lTOW

Ober, Kaler. Grimes & Shriver
Attomeys at law
1401 H Street. NW, Suite 500
Washington, DC 20005·3324
202-408·8400 Fax 202·41J8.0640
www.aber.com
VIA COURIER
David M. Narrow, Esq.
Federal Trade Commission
601 New Jersey Avenue, NW
Washington, DC 20001
Phone: (202) 326-2744
Dear David,
July 18, 2008
Christl J. BralRl
cjbraun@ober.oom
202-326-5046
Offices In
Maryland
Washington. D.C.
Virginia
This letter responds to your January 24, 2008 Jetter regarding the advisory opinion
request by TriState Health Partners, Inc. ("THP"). THP's management, committees, and
Board have spent considerable time working through, and addressing, your questions and
concerns, and, as a result, they have made some changes to their proposed program. In
addition to addressing your questions, this letter wil1 explain the changes that have been
made. Many of the answers to your questions come directly from THP and are written
from their perspective. This reply contains 11 sections, but focuses on the following nine
major areas:
• 	THP contractors and how THP wil1 address their status going forward.
• 	THP members and how THP will address current and future membership
requirements including securing commitment to clinical integration.
• 	The roJe of the Washington County Health System, Inc., and its
subsidiaries in clinical integration.
• 	The relationship between InforMed and THP going forward.
• 	THP's experience in diabetes management and how this supports the
expectation that THP will be able to achieve the interdependence and
cooperation necessary to obtain the program's intended efficiencies.
• 	How THP's clinical integration program will be similar to and different
from current THP programs and operations.
• 	Payer interest in the clinical integration program.
• 	THP's pay-for-performance plan and it's affect on the FTC's legal
analysis.
• 	The reasonable necessity of THP' s joint contracting on behalf of its
physician members.

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David M. Narrow, Esq.
July 18, 2008
Page 2 of38
I. 	Contractors
The following is expected to address questions raised on pages 3 and 4 of your
letter regarding THP contractors.
Background - When THP was formed in 1994, certain physicians in the
community elected not to join the PHO (Physician-hospital organization) with reasons
including:
• 	Lack of desire to.pay the membership fee ($2,000 during the 90-day open
enrollment period and $2,500 thereafter, unchanged since inception).
• 	Desire to remain independent practitioners and a fear of joining any
organization that could restrict their autonomy.
• 	General reluctance to join any organization that smacked of insurance or
managed care.
• 	Recognition by a few that the PHO needed their services more than they
needed to join the PHO.
• 	Service areas predominantly outside of Washington County.
• 	The PHO's inability to assure a return on investment because the PHO
was formed as a membership, as opposed to stock, corporation.
From about 1997 to date, THP's major client for network and medical
management services has been the Washington County Health System Employee Health
Benefit Plan ("WCHSI Plan" or the "Plan"). The Plan insisted that several of these non-
member physicians or physician groups needed to be included in the THP network in
order for the Plan to have a viable network to care for its enrollees in a cost-effective
manner.
To provide an adequate network for the Plan, THP's response was to create a
"contractor" status within the PHO. These practitioners would have no governance
rights, nor would they share in distributions, if any. But these practitioners did agree to
accept the Plan (InforMed) fee schedule and not balance bill Plan enrollees. This
arrangement has worked very weJI for the past ten years for the Plan and other self-
insured employer groups who have accessed the THP network. The contractor status also
has been used as a convenient designation for non-physician practitioners (e.g., nurse
midwives) who provide care to Plan enrollees but do not qualify for actual THP
membership.
Discussion - THP has come to realize that to develop a clinically integrated
network, continuation of the contractor status within THP is not viable. THP lacks the
ability to secure unfettered commitment to its clinical integration strategy, including the
efficiency-producing initiatives, from these contracted practitioners. Even with a

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David M. Narrow, Esq.
July 18,2008
Page 3 of38
requirement that these practitioners sign the "Participating Provider Contract - Clinical
Integration," THP could not guarantee to payers that these practitioners will be
committed to the success and guiding principles of clinical integration. Nor could THP
guarantee that each contracted provider would commit to participation in each payer's
contract; thus, it could not have a single network of committed practitioners, which it
believes is integral tQ the success of its integrative efforts.
THP also recognizes that its network of member physicians is small when
compared to that of CareFirst BlueCross BlueShield or United Healthcare, but
beneficiaries of these plans will have access to the entire plan network, which far exceed
the THP network by sheer numbers and geography. Critical to the success ofTHP's
strategy, however, is access to all payer claims data for these enrollees. As the Electronic
Health Record ("EHR") is populated with claims data from practitioners outside of the
THP membership, THP will be able to examine the care of these enrollees and determine
whether the care is being managed in accord with the principles ofTHP'sclinical
integration strategy. THP, then, will be able to provide plans with the data necessary to
review the patient care being provided by the plan's entire network. Over time, it is
expected that THP will be able to demonstrate to employers, plans, and enrollees the
value of the quality its committed CI network provides over the benefit of the larger size
of the commercial plan networks.
In our letter ofJuly 9, 2007, we reported a total of69 contractors; as of this date,
the number is 70. THP is in the process of eliminating the contractor status by offering
options to these practitioners.
1. 	With a few exceptions (see 2. foHowing), the contractors have all been
offered a one·time opportunity to join THP as a Class I member. Those
who have either joined, or are in the process of joining as of the date of
this letter, already have met the credentialing standards ofTIIP. As a
condition of their invitation to join, they must agree to meet the standards
for commitment to clinical integration, as outlined later in this letter.
2. 	The exceptions from an offer to join THP either are not eligible for
membership in THP (15 Licensed Clinical Social Workers) or are .
currently employed by the Class II member and not eligible for
membership (the 4 nurse midwives). The Licensed Clinical Social
Workers will be given the opportunity to direct·contract with Community
Health Partners ("CHP"), the regional network owned by InforMed.
3. 	The practitioners offered membership in THP who elect not to join THP
and participate in its clinical integration program, will be able to direct-
contract with CHP. As part of the CHP network, they will be part ofa

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David M. Narrow, Esq.
July 18, 2008
Page 4 of38
second tier network (higher copay and lower benefits, unless waived due
to medical necessity) available to the WCHSI Plan enrollees and the
claims data will be added to the enrollees' EHRs. In the event that Plan
enrollees see CHP physicians, the THP physicians, through monitoring of
their patients' EHRs, should be able to detennine whether or not their
patients received guideline-directed care from the CHP physicians and,
through follow-up care, make up for any omissions. Although its
achieved efficiencies may not reach the level of a closed-panel product,
THP intends to do what it can to optimize the quality of care its patients
receive, even if those patients self-select and receive some care outside
THP's network.
II. 	THP Mem bersbip
The following should address your questions on pages 2 and 4 of your letter
regarding THP's membership, in particular how THP will address access to membership
and commitment to the program by its members.
THP has been an "open-PHO" since inception. Generally speaking, any
physician who met THP's credentialing standards, which are similar to NCQA's, was
able to join the PHO. To date, no physician's membership has been involuntarily
tenninated. Moving forward, however, it is THP's intent to be much more selective in
allowing new physicians to join. THP is developing a policy intended to ensure that
physicians who join THP at the inception of its clinical integration program, and in
limited numbers later, are committed to the program objectives of controlling costs and
assuring quality care.
Many ofTHP's members are practice groups, as opposed to individual
practitioners. THP recognizes that, generally, the entire practice is involved in the care of
a particular patient.) THP's program will be focused not only at the individual physician
level, but also at the practice level. Therefore, the entire practice needs to commit to the
clinical integration principles of collaboration, cooperation, and mutual interdependence.
In order for a practice's participation agreement to be ratified, each member of the
practice must sign an attestation agreeing to committed participation in THP's clinical
integration program. The failure of one physician in a practice to either commit to, or
adhere to, THP's programs of continuous process improvement will place the entire
practice's continued participation in the program at risk.
J Group members generally provide call coverage for one another and may see each other's patients when
scheduling problems arise. In addition, practice group members often discuss patients' treatment option
with each other, particularly in complex cases, and surgeons may even assist one another.

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David M. Narrow, Esq.
July 18, 2008
Page 5 of38
In order to assure purchasers of the clinical integration product that THP. can
deliver an entire network of providers absolutely committed to the guiding principles of
improving quality and controlling costs through collective behaviors, THP has
detennined that once THP's current membership has had an opportunity to detennine
whether or not they wish to participate in THP's clinical integration program, the PHO
will be closed to new members with the following exceptions:
1. 	Current members who decline to participate in THP after the 60-day open
enrollment period for the CI program will have limited opportunities to
participate later. An exception may be made for those physicians who are
in limited-access specialties or serve a geographic region currently not
served. In addition, THP will conduct an annual, 30-day open-enrollment
period for those physician members who declined initial participation in
the program but are reconsidering their original non-participation decision.
All requests for reconsideration win be reviewed by the THP Board of
Directors on a situational dependent, case-by-case basis following an
independent, third-party analysis of need. These physicians would need to
present clear and compelling commitment to nIP's guiding principles of
clinical integration before they can be reinstated as members.
2. 	Physicians new to the community joining existing member practices, such
as taking the place of retiring or relocating physicians, will be expected to
join TW and agree to participate actively in the group's commitment to
clinical integration. Failure to do so may place an entire practice group's
continued participation at risk.
3. 	As detennined by the Board of Directors. physicians who wish to join
THP in the future and who either are in a must-have specialty or provide
services in a geographically under-served area may be eligible to join
nIP, as detennined by an independent, third-party needs analysis. Again,
the Board of Directors will make these detenninations on a situational
dependent, case-by-case basis only after the physician has been able to
demonstrate clear and compelling commitment to the program.
THP has not yet distributed the "Participating Provider Contract - Clinical
Integration" ("new contract") to the membership. We await any concerns or changes that
may need to be made to the new contract following review by the FTC. We acknowledge
that once the new contract goes out to the membership, any changes requested by one
physician must be made for all, if approved by the leadership. In an attempt to mitigate
the possibility that the membership may have numerous lawyers reviewing individual
2 New physicians will be expected to meet the THP credentialing requirements.

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David M. Narrow, Esq.
July 18, 2008
Page 6 of38
contracts, THP paid for the services of an independent lawyer to represent the interests of.
the physicians in the preparation of this contract. The President of the Medical Staff of
WCHA (an independent, private~practicing THP~member physician) selected a lawyer
known to most of the membership and who has represented their interests for many years.
THP acknowledges that when the contract is released for review and ratification
by the membership, individual members will have concerns, especially with the no opt-
out provisions. The THP Communications Committee has developed a plan for
disseminating the new contract to the membership. The Committee fonned a "Messenger
Training School" whereby six physician volunteers have agreed to serve as messengers to
communicate the clinical integration strategy, in detail, to their peers in what the
Committee has referred to as a "retail sales" strategy. These physician messengers also
are prepared to discuss with their peers the elements of the new participation contract and
the eventual closing of the PHO to new members.
These physician leaders collectively recognize that society's focus is changing
from, "how much is paid and who pays" to "what is society getting for our healthcare
dollars." 	They recognize that the traditional independent practice of medicine, in the
absence of a platform for putting individual best interests aside for the collective good of
the whole, is a failed business model for making significant gains in improving quality
and controlling costs.
Most importantly, the physician messengers have volunteered to serve in this
capacity because of the value they see for the community of physicians coming together
under a clinically-integrated model represented by a high degree of cooperation,
collaboration and mutual interdependence. These six physicians, plus the more than 40
physicians currently serving on various THP committees, are the early adopters of
clinical integration.
Although THP has not as yet introduced the new participation contract, it has no
reason to believe that more than a few current member practices will decline initial
participation. Rather, the general tone among the membership is cautious optimism that
the program will be viewed by the FTC as one that, once fully implemented, will achieve
demonstrated superior outcomes at demonstrated superior cost savings to their patients
and the purchasers of health care. With over 20 percent of the membership already
represented on different clinical integration and governance committees and additional
physicians serving in an ad hoc capacity as consultants to the development of clinical
practice guidelines, THP believes a significant portion of its members will join the
clinical integration program.
THP has a vested interest in providing a comprehensive network to payers.
Network access is a very important component of any managed care strategy. However,

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David M. Narrow, Esq.
July 18, 2008
Page 7 of38
TRP is not willing to sacrifice quality for quantity-every physician who agrees to
participate in the clinical integration program will acknowledge their commitment to
fully support the tenets of the program by assisting in the development of, and practice to,
the clinical practice guidelines created in collaboration with their peers, utilizing the tools
embedded in the ERR, and showing progress towards continual process improvement
("moving the mean").
The Quality Improvement Committee ("QIC'') is focusing on continuous
improvement and ongoing initiatives that will sustain the long-term commitment to
THP's clinical integration objectives. 3 THP, through the active collaboration of its QIC
and Credentialing Committee, and oversight by the Clinical Integration Oversight
Committee, will use data from the ETG and EBM Connect data sets during the biannual
recredentialing process and at periodic intervals through the year to identifY best practices
and monitor movement of the mean for the individual physician, the individual group
practices, and the entire PRO, and report progress or lack thereof. Continual process
improvement by individual member physicians will result in successful recredentialing
and signify one's continuing commitment to the success of the program. Continued
failure to show improvement will result in peer intervention and could result in eventual
termination from the PRO, if improvement is not seen.
When the leadership decided to embark on a clinical integration initiative, they
made it clear that it was not their desire to cull the outliers. Rather, a guiding principal
has been THP's goal to "move the mean" for the entire network, fully recognizing that
the day may come when it may be necessary to cull the outliers from the network. THP
has the will to cull, but prefers, initially, to work with the entire community of physicians
to give them the tools to move their individual mean. The Symmetry suite of software,
integrated by InforMed and customized by THP, gives THP the ability to tum data into
information; the "heavy lifting" will be the community of physicians coming together
under a clinically integrated program to turn that information into action.
By example, utilizing actual data from the fourth quarter of 2007 for its current
diabetes 	in more detail in Section VI 	THP knows
3 NOTE: Since the July 9, 2007 THP request for an advisory opinion Jetter, the Service Improvement
Committee, charged with monitoring the compliance to clinical practice guidelines, has been collapsed into
the Qle. The physicians, after meeting several times, believe that the clinical integration objectives are
better served by having the same committee that develops the guidelines also monitor those guidelines.

o B, E R I!<~co~at~
David M. Narrow, Esq.
July 18, 2008
Page 8 of38
The QIC will use data
as achon 	mem 	at large, and the findings will be
incorporated into the evaluation process. Specifically:
1. 	What can the selected PCP learn from the rest of the membership in order
to favorably decrease hislher patient hemoglobin Al C scores?
2. 	What can the membership learn from the selected PCP to increase their
annual screening rate for diabetic retinopathy?
3. 	Using the fourth quarter 2007 as a baseline, how will the membership
show improvement over time by moving the mean from_overall
compliance to incrementally increasing goals and established "stretch
targets"?
III. 	Other Specific Responses Relating to Members and Membership
Following are other specific questions regarding membership concerns that 'the
FTC raised and our responses.
1. 	Membership Update
Attached as Exhibit A is an updated membership chart, which shows the current
number ofTHP member physicians and practice groups in each medical specialty. At
this time, THP has a total of212 physician members, 41 of which are employees of
WCHSI or one of its subsidiaries.
2. 	Does TriState have any experience under its capitation program or
otherwise in dealing with physicians who are either non·compliant or performing
at sub-optimal levels regarding programs or standards under which TriState has
operated?
TriState is in the very early stages of development of clinical practice
guidelines. To date, 18 have been approved by the Board of Directors although 30 are
in various stages of development and review. None of the guidelines have been
disseminated to the membership as of yet, as THP also is in the very early stages of
determining which metrics initially will be measured, how they will be measured, and
how this will be communicated to the membership.
THP does have several examples of successfully ......,'.... ,'6

o B E R I!.<~l-c!.~
David M. Narrow, Esq.
July 18,2008
Page 9 of38
The second example applies to THP's diabetes disease malIlajgerneIlt 1>lrOwram
the WCHSI Plan
3. 	Is this ($2,500 "joining fee") a new fee for existing TriState physician
members to participate in the proposed program, or is it a pre-existing
requirement for membership in TriState generally, that already has been paid by
those physicians who currently are members, and therefore will only apply to new
TriState members? .
The "joining," or membership, fee as established in 1994 was, and continues to
be, a one-time fee of $2,500. THP gave a $500 discount to those physicians who joined
in the first 90 days. The membership fee has remained $2,500 since the close of the
first 90-day open membership period and has been paid by all new members since then.
Changes to the membership fee are at Board discretion, but no changes are anticipated.
All future, new members will be required to pay the membership fee.
4. 	If the latter, will there be any additional fees charged to current
TriState member physicians who already have paid the $2,500 joining fee in order
for them to participate in the proposed program?
At this time, no additional fees are expected to be required of the membership.
Capital contributions and retained earnings from network access, medical management,
and health risk assessment fees charged to self-insured employer groups have been
adequate to fund THP operations to this point. THP plans to continue funding its
operation from payer network access and medical management fees. In the event that

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David M. Narrow, Esq.
July 18, 2008
Page 10 of38
THP's operation costs and the costs of the EHR exceed THP's income, the THP Board
does have the ability to assess THP's members.
5. 	What other financial "investment," if any, will TriState member
physicians be required to make in the proposed program (e.g., computer
hardware/software, etc.)?
One hundred percent of THP member offices currently have computers and
internet access, which are requirements of all members for participation in the clinical
integration program. The estimated annual cost to a physician office for high speed
internet access is $600, with an annual modem fee of $60. Because 69.8 percent of
THP practices are already using the THPlInforMed online system for administrative
functions (e.g., referrals and claims submissions) related to Plan enrollees, many offices
may not require additional hardware. Physician offices generally embrace this
technology and have made the necessary purchases that help to increase office
efficiency. The remaining offices that are not currently accessing the online system
will likely need to add additional computers and printers. THP estimates that cost to be
approximately $2600.
THP anticipates that each physician will be required to attend four hours of
training. After checking with several offices (both primary care and specialists), THP
estimates the potential lost income of this attendance is approximately_per
physician. Office staff will receive the same four-hour training as physicians, with the
addition of customization of the EHR for the practice. The cost to the practice for
training of the office manager would be approximately_for wages, and the cost to
the practice for each nurse's training would be approximately. For the average
two-physician practice, a four-hour training session will cost the practice approximately
$2500.
The rate limiting factor for the success of the EHR is having enough covered lives
in the data warehouse to make the office effort worthwhile. THP is unsure what the
critical mass requirement is, but does realize that the current number of covered lives
(less than 6,000) is not sufficient. Anecdotally, THP has heard that physicians will use
the EHR in one or more of the following four ways:
a. 	Several physicians have reported that they want the capability to
have the applications available to them when the patient is sitting
in front of them, and they wish to be able to log-in and pull up the
chart. Those physicians may need to purchase additional hardware
and internet access capability (hardwire, wireless, etc.) in order to
use the EHR in this fashion.

o B E R I~DCJC!l
David M. Narrow. Esq.
July 18, 2008
Page 11 of38
b. 	For most practices, it is expected that the receptionist will print the
EHR for each scheduled patient and place it on top of the patient
chart for the physician to review during the patient visit. This also
may require additiOIial hardware, such as a dedicated computer and
printer.
c. 	In order to move the mean, physicians have identified
opportunities to use the EHR to reach out to non-compliant
patients and schedule them for appointments. Again, this may
require additional time investment by the physician and office staff
to identify non-compliant patients and contact those patients.
d. 	At the request of the physician, THP's nurse case managers will
review the EHR and forward to the physician areas of non-
compliance or concern. Physicians will then have an additional
time investment in determining how to become compliant, or, if
the non-compliance is due to patient non-compliance, how to assist
the patient.
It is noteworthy to mention that three physician directors attended the full-day
seminar at the Federal Trade Commission on May 29, 2008 and that four physician
directors and one physidan cominittee member attended a full-day seminar in Chicago on
June 25, 2008. A full-day out of the office for these eight physicians, plus a half-day out
for travel to Chicago for the five, represent a considerable loss of income for these
practitioners, but speaks volumes about their commitment to the success of the program
and their willingness to convey lessons learned to their peers.
6. 	Will member physicians participating in the proposed program be
required to make any non-financial investments in the proposed program (e.g.,
personal participation in program activities or committees, training of themselves
and/or their office staffs, etc.)?
As stated earlier, over 40 physicians currently are participating in formal
committees and governance. Many more physicians, although not formal committee
members, have served on an ad hoc basis, assisting in the review of clinical practice
guidelines that impact their specialty. It is expected that virtually the entire
membership, at one time or another, will participate in the development of some
component of the program. This not only is an expectation of continued membership in
THP,4 but also an affirmation of commitment to clinical integration.
4 See _of the newly revised Participating Provider Contract, which is Exhibit B to this letter.

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David M. Narrow, Esq.
July 18, 2008
Page 12 of38
Every physician and their immediate support staff will be required to attend
training sessions on the use of the EHR, as noted above. Office staffs generally are
very familiar and comfortable already with the basics of the software, as they use the
software for InforMed referral management, claims submission, and enrollment
verification. We anticipate that the office staffwill adopt the EHR quickly, due to their
current familiarity with the basic system, and can be expected to be an excellent front-
line resource for keeping the physicians informed.
7. 	What will be the nature and extent of participation by TriState
member and contracting physicians in the Clinical Integration Oversight
Committee and its six sub-committees?
The Clinical Integration Oversight Committee ("CIOC") is composed of the
chairs of the five sub-committees-Quality AssurancelUtilization Management
("QAlUM"), Credentialing, QIC, Pharmacy Benefits Management, and Care
Coordination. The CIOC Chair is a physician Board member.
As of this writing, 35 physician members fill 51 physician governance positions.
This excludes the medical director, who serves on 7 governance committees, attends the
Board of Directors meetings, and also is a Class I member of THP. The physicians who
serve in multiple roles, for the most part, are Board members who serve on committees,
and committee chairs, who also serve on the CIOC.
The current Class I physician participation in each committee, including the
medical director, is as follows:
Board of Directors - 9
Clinical Integration Oversight - 6
Quality AssurancelUtilization Management-5
Credentialing - 5
Quality Improvement - 11
Pharmacy Benefits Management - 4
Care Coordination - 1
Communications - 4
Bylaws-4
Nominating - 5
Contracting Finance Administration - 6
To date, very few physicians have said "no" to a request to join a THP CIOC
sub-committee or any of the other standing committees (Communications, Bylaws,
Nominating, and Contracting Finance Administration) and those that have had very
good reasons. All committees currently have asufficient number of volunteers serving.

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David M. Narrow, Esq.
July 18, 2008
Page 13 of38
It is anticipated that the QAlUM Committee will add 4 additional physicians in 2009,
while the QIC will add an additional 5 physicians as the committee begins to focus on
quality metrics.
THP anticipates no problems in filling vacancies as physicians determine that it
is time for them to rotate off of a committee. 	THP currently has no plans to impose
term limits. As long as the leadership determines that a volunteer committee member
continues to contribute in a positive manner and attend meetings, there would be no
compelling reason to arbitrarily tell that physician that hislher services are no longer
needed. While all of the standing committees have many new members, the two oldest
committees- Quality Assurance / Utilization Management and Credentialing-have
members who have served since inception (1995). These physicians have been critical
to the development of the clinical integration program, have a vast amount of
institutional history and perspective, and are looked at as'leaders of the program;
Again, THP has no plans or desire to arbitrarily rotate them off of these key leadership
positions. THP has, however, included a requirement in its participation contract that
each member physician commit to serving on a CIOC sub-committee if and when
called upon. S
8. 	Will TriState require participation by all or certain TriState
member pbysicians on any committees, subcommittees, or in otber organization
activities regarding tbe performance of physicians other than themselves (i.e.,
relating to their interdependent, as opposed to individual, performance)?
The QIC is committed to the process of utilizing data to review the activities of
their peers in order to achieve continual process improvement and "move the mean."
This includes the development of reporting mechanisms and actual presentations to the
physicians, which will show where each physician meets standards or needs
improvement. The committee is prepared to reach out to other physicians for assistance
in this process, and the membership will know that their participation is a requirement
of the program.
Physicians, perhaps more than most other professionals, are hesitant to sit in
judgment of their peers lest those same physicians sit in judgment of them. In addition,
physicians rely upon other physicians for referrals; any actions taken by one physician,
such as advising another that hislher practice patterns are not up to the community
standard, needs to be done very carefully. The leadership fully recognizes, though, that
the way things have been done in the past is not sustainable for the future.
s See •••••of the Participating Provider Contract, attached as Exhibit B.

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David M. Narrow, Esq.
July 18, 2008
Page 14 of38
Continual process improvement and resultant population health improvement
will not occur without the courage to confront performance issues. The entire
membership will be required to participate in these activities when caned upon. This is
an expectation of continued membership in THP and participation in the program and is
embedded in the new contract. The QIC will be developing improvement goals, issuing
"report cards" to the member physicians with recommendations for improvement, and
working with those physician groups needing improvement.
Specifically, all physician members ofTHP will be expected to participate when
called upon, and when appropriate, in quality improvement activities to include, but not
be limited to:
a. 	Challenging peers to improve.
b. 	Sharing "best practice" ideas and methods with competitors in a
manner that will help all Jearn and improve.
c. 	Mentoring practices that demonstrate difficulty in achieving
quality improvement.
d. 	Reviewing patient files of lower performing physicians and
making recommendations for improvement.
e. 	Leading training sessions in specialty-specific clinical practice
guidelines and assisting colleagues in implementing those
guidelines.
9. 	Please explain how Sections 	of Exhibit 9 of your
original submission ("TriState Member Participating Provider Contract - Clinical
Integration") are consistent with TriState's purportedly operating as a clinically
integrated joint venture of its physician members.
Section_of the original contract states, "Provider agrees and acknowledges
that he or she remains solely responsible for all clinical judgments he or she makes with
respect to his or her patients." Section. states, "For the purpose of this Contract and
all services to be provided hereunder, each party is, and will be deemed to be, an
independent contractor, and, except as provided in_of this Contract, not an agent
or employee of the other party and neither may hold itself out as an agent or employee
of the other party." The FTC staff should note that these provisions are standard
contract provisions. There are two main reasons that these provisions are included in
the contract, neither of which affects THP's integration.

o B E R IfPro~.1 Co~a!~
David M. Narrow, Esq.
July 18,2008
Page 15 of38
First, these provisions are intended to preclude THP from liability in a
provider's medical malpractice case. Even though THP's physicians will be guided in
their practice by THP's guidelines, only the physicians will know whether following a
guideline is the appropriate treatment for their patients. For example, a THP guideline
may call for the prescription of aspirin to heart patients. Only the physician will know,
though, whether a patient has an aspirin allergy that would contraindicate prescribing
aspirin. Thus, the physicians must be responsible for assessing the patients and,
ultimately, making treatment decisions.
Second, the Maryland Board of Physicians, the Maryland physician licensing
body, has taken the position that a corporation may not employ a physician unless it is:
1) a professional service corporation; 2) a hospital; or 3) a health maintenance·
organization. Therefore, THP cannot legally control its members' clinical decision-
making, nor can the physician members be anything other than independent contractors
ofTHP.
Even if these .legal justifications were not present, the contract provisions would
still not be inconsistent with THP's operation as a clinically integrated joint venture.
Clinical integration is a partial integration of providers who combine some, but not all, of
their business activities through the joint venture. If the physicians were employees of
THPor THP otherwise controlled their practices, THP would be a fully integrated entity
and there would be no question as to. whether there was sufficient integration for THP to
contract with payers on their collective behalf.
10. 	Regarding the "non-exclusive" participation of TriState physicians
in the proposed program, you discuss their freedom to contract individually and
directly with payers. Is there any restriction or limitation on the ability of
TriState physicians to also become members of other physician or provider
networks, including other clinically integrated arrangements?
THP does not restrict its members' ability to join another physician or provider
network. The only restriction regarding other networks is that a Class I THP Board
member may not serve on the Board of Directors of another provider arrangement. As
for joining a clinically integrated network, THP is not aware of any other initiatives in
this area to form a clinically integrated network. THP is following the activities of
other provider organizations in our market area, however. Should such an initiative
arise, THP will evaluate, at that time, whether or not imposing such restrictions are both
viable and legal. Our concern is that if the quality improvement initiatives of another
such arrangement are significantly different than those ofTHP, THP's program could
be jeopardized. Again, counsel will be consulted before decisions are made regarding
permitting participation in such arrangements.

o B E R I~~l-Cott~
David M. Narrow, Esq.
July 18, 2008
Page 16 of38
IV. 	Role of Washington County Hospital Association and the Health
System
This section will discuss the advantages and disadvantages to THP of having the
Washington County Hospital Association ("WCHA") and its ancillary business entities
as partners in the clinical integration strategy. It also will discuss the advantages and
disadvantages to the Hospital and its ancillaries of participating in the program. Suffice
to say however, the hospital leadership is 100 percent committed to the success of the
partnership and, to date, has taken absolutely no actions that could be interpreted as
anything less than full support. As will be evident from the discussion, WCHSI is more
than a contracting payer for the program, and WCHA is more than a member ofTHP,
an investor, a partnering provider, and a competitor.
Advantages to THP
1. 	The Washington County Health System, with about 2,970 employees in
total, is the largest employer in Washington County (according to the
2008 Business & Ind~irectory of Washington County). As such,
the health system has _ 	total covered lives in its employee health
benefit plan. There are two major advantages to THP with these
numbers:
a. 	The EHR development, monitoring of baseline compliance to
evidence-based medicine and clinical-practice guidelines, and the
evaluation of preliminary practice efficiency indexes would not
have been possible without an initial large volume of covered
lives popUlating the data warehouse. The WCHSI Plan has
provided sufficient covered lives to get the clinical integration
program started. With these _ 	covered lives, we are able to
demonstrate to payers, purchasers, and the physician membership
the "art of the possible." For many, seeing the technology fulfill
its potential has truly been an enlightening moment.
b. 	The access, medical management, and disease-risk assessment
fees paid for care rendered to THP's current self-insured
enrollees, including the WCHSI Plan, have allowed THP to fund
its day-to-day operations to a level sufficient to build the internal
infrastructure to support the program. Future initiatives, such as
a community-wide electronic medical record or development of a
local health information exchange organization, may require
capital beyond the capabilities of either partner. There are
significant advantages to having the hospital as a partner when
THP will face increased capital requirements to fund the next
generation of quality improvement initiatives. Funds will also
come from payers supporting THP programs that produce better
outcomes for their members, a direct result of physicians

o B E R I~rof~~cl~
David M. Narrow, Esq.
July 18, 2008
Page 17 of38
providing clinically integrated services to those payers. While
THP non-clinically integrated programs currently are focused on
the self-insured market, it is anticipated that the long-term value
to the community will be with the fully-insured market where
aggressive care management and clinically-integrated programs
are essential to population health improvement, increased quality,
lower costs, and decreased financial exposure to the health plans.
2. 	The 50 percent capital contribution by the hospital is not insignificant.
Again, when matched to that of the physician contribution, these funds
have provided sufficient funding to date for infrastructure development
to support the program.
3. 	The power of the EHR over other such advancements in technology is the
marriage of medical claims data with lab values and pharmacy data. This
marriage would not have been so easily, or possibly, achievable if outside
reference labs or non-aligned retail pharmacies were used. As an owner
of the major reference lab in the county, Hagerstown Medical Lab
("HML") and with about _pharmacy market share through its
owned pharmacies (Home Care Pharmacy), synergies have been created
that significantly enhance the value of the program technology to the end
user. For example, WCHA bills generic revenue codes for lab testing
performed for emergency room and inpatient patients, so plain claims data
would not supply useful data for the EHR on the tests performed. Because
HML is integrated with WCHA, HML is able to transmit to THP for
inclusion in the ERR lab values for WCHA patients. Inclusion of the lab
values in the ERR should prevent duplication of tests and allow for better
tracking of health changes post-discharge, reducing readmissions.
4. 	Several of the hospital-employed, hospital-based andjoint-venture-
aligned physicians serve in prominent leadership and support roles in the
development of the program. The expertise, counsel, and advice these
consultants bring to THP may not have been present were they not
aligned with the PHO through the health system's involvement and
commitment to the program.
5. 	Several key hospital and Antietam Health Services directors and
managers serve on THP committees. From the hospital, this includes the
vice president of medical affairs, the vice president of finance, director
of public relations, director of health management, director of behavioral
health, both the director and manager of integrated patient support
services, and the manager of total rehab care. From Antietam, this
includes the vice president of operations, executive of operations,
pharmacy benefits coordinator, and four of the clinical pharmacists.
Without the "H" partner in the PHO, the expertise of these personnel
would not be realized.

o B E R I~'O~i>~C.t~
David M. Narrow, Esq.
July 18, 2008
Page 18 of38
6. 	As a major employer, the hospital, its executive leadership, and its board
of directors have a significant presence in the business community.
These hospital representatives are key to assisting THP in
communicating its message to other purchasers of health care in the
community; An example is coordination of introductions to community
groups where THP can present its strategy for population health
improvement.
7. 	The hospital provides formal forums for presentation of the program to
key constituents. This includes the quarterly meeting of the medical
staff, medical staff departmental meetings, and various boards.
8. 	The TI-IP member physicians, as partners with the hospital in the clinical
integration program, will have better alignment with the hospital, as both
parties focus on outcomes and the care of the patient through the
treatment continuum. Payers will place high value on the presence of a
vertically integrated program in the market place because of the potential
cost savings through the management of patients' care.
9. 	According to speaker Toby G. Singer, Esq., at the FTC Clinical
Integration Workshop of May 29, 2008, clinically-integrated provider
programs aligned with a hospital partner, such as PHO's, generally are
more successful due to the hospital's access to capital, information
technology expertise, funding capabilities, and awareness of Stark and
regulatory restrictions.
Disadvantages to THP
1. 	A major disadvantage of having the hospital as a partner is the issue of
patient steerage to the hospital and its rate regulated environment, as
both inpatient and outpatient rates are non-negotiable in Maryland when
provided in the hospital setting. Payer fiscal interests are best met when
as much care as possible can be delivered outside of the hospital because
those rates of reimbursement are negotiable. As such, payer and THP
incentives are potentially opposed to those of the hospital.
THP has long recognized that when services are provided within the
hospital's own walls for services the hospital also pays for as a self-
insured employer, it is in the hospital's best interests to steer that
business within. These transactions impact the hospital income and
expense statements, but not the balance sheet. However, physicians are
making care decisions based on what is most appropriate and cost
effective for an individual patient's circumstance.
To date, however, the issue of steerage to the rate-regulated environment
has not been an issue when it is not in the best fiscal interests of the non-

o B E R I!<Prot!}.c!l
David M. Narrow, Esq.
July 18, 2008
Page 19 of38
WCHSI, self-insured health plans managed by THP. For these plans, THP
steers to the unregulated environment, unless there is a compelling clinical
reason for utilizing the regulated environment. The hospital fully supports
these THP steerage decisions, which are made in the best fiscal and
clinical interests of the clients.
2. 	Angst has been expressed periodically-that the hospital could exert
influence in ways that are detrimental either to THP or to the independent
physicians. While this has not occurred to date, it almost is a natural
tension point that always will exist between independent physicians and
any hospital. At the Board of Directors level, the Class I members
(physicians) have one vote and the Class II (hospital) has one. There must
be unanimity for a resolution to pass. To date, this has been an effective
mechanism for dealing with fears of an imbalance of power at the highest
level of PHO leadership.
3. 	The hospital is viewed by many private physicians as a competitor. As in
other areas throughout the country, physicians in Washington County have
been expanding their outpatient services and seeking new business and
investment opportunities. While the hospital has successfully joint
ventured with many of these physicians and clearly wishes to continue
these business arrangements, not all physicians want the hospital as a
joint-venture partner. This tension is most clearly obvious when the
hospital insists that the care for which it pays for WCHSI Plan enrollees is
delivered within the WCHSI system. Several physicians have used
WCHSI's steerage of Plan enrollees as a reason for not wishing to further
partner with the hospital. Generally speaking, however, once physicians
understand the economics from the hospital's perspective, tension
dissolves.
Advantages to Hospital
1. 	Population health improvement, continuous quality improvement. and
controlling the escalating costs of healthcare support the mission of the
hospital and health system. Through its alignment with THP, the health
system has been able to keep its increase in medical and pharmacy claims
to_for the past fiscal year o~us fiscal year. For the
current fiscal year-to-date, the trend is~ Anecdotally, we
hear of increases year-over-year of 15 percent to 35 percent for local fully-
insured employer groups. One of the hospital's agenda items is to ensure
that local employer groups-whether fully- or self-insured-have access to
the successes the hospital has enjoyed as a result of its relationship with
THP.
2. 	As mentioned previously, there exists at all times a state of tension
between a hospital and its medical staff. Unless the two parties are joint-

o B E R I~Prof~i1!m~
David M. Narrow, Esq.
July 18, 2008
Page 20 of38
venture partners, it is very difficult to align incentives. The PHO,
however, is a powerful joint venture and medical staff integration strategy.
As bpth sides continue to work to develop the program, and recognize the
value the other brings to the process, relationships can only be
strengthened. This serves as a compelling incentive for the hospital to
participate in the program.
3. 	THP, through its active governance and committee structure, is serving
as an excellent vehicle for developing physician leaders for the future.
As these physician leaders learn to work more closely with the hospital
leadership on THP's clinical integration program, they will gain the
skills to work more closely with the hospital in medical staff leadership
positions. From the hospital's perspective, THP membership is a good
investment in its own future physician leadership development and
integration strategies.
4. 	Under the Maryland's hospital rate-regulated-reimbursement system,
hospitals have an incentive to receive the incremental admission. The
hospital fully recognizes that between managed care payers and THP,
forces external to them will work to keep patients out of the hospital.
But when that patient does require acute hospital care, WCHA wants to
ensure that the incremental admission is coming to it. If WCHA is
closely aligned with THP and its clinical integration program, the sense
is that the physicians will want to admit to a hospital that adheres to its
program protocols.
5. 	Hospitals in Maryland, under the regulated reimbursement system, have
a financial incentive to reduce length of stay. The more that care is
managed by THP and its physician partners, the more the hospital can
trust that its joint-venture partners are protecting its interests in
controlling length of stay.
Disadvantages t~ Hospital
There are few disadvantages of THP membership to the hospital that have not
been addressed in one way or another previously. The hospital can be expected to see
its admissions decrease, but this is happening regardless. The hospital will continue to
lose outpatient business to the physicians, but this is happening regardless. And the
hospital will need to continue to match the physicians with capital infusion but again,
this is an investment that the hospital believes to be worthwhi1e. A venue for the
hospital to create business partnerships with key physicians and to focus physicians on
hospital goals (such as reduced length of stay) is an advantage that outweighs any
significant disadvantages of the partnership. The hospital recognizes that physicians
drive clinical outcomes and desires to support the physicians in the process.

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David M. Narrow, Esq.
July 18, 2008
Page 21 of38
V. 	InforMed Relationship
The I.nforMed suite of teclmology tools serves as the platform. that supports the
entire clinical integration program. Specifically, the EHR is the vehicle which
facilitates the interaction among disparate groups of physicians that will occur when all
can view, at their individual desktops, the entire continuum of care including office,
hospital inpatient and outpatient, tertiary facility, in~network, out-of~network, and
ancillary services including pharmacy and lab values, home care, and durable medical
equipment. The suite of software also provides the evidence-based medicine
guidelines, reporting of compliance to those guidelines, predictive modeling, and
efficiency index comparisons for the individual physicians to local, regional, and
national databases.
As critical as the EHR is to THP's clinical integration program, its effectiveness
is severely limited by a lack of critical mass of data flowing through the data
warehouse. Currently, the EHR is populated only by those claims for which inforMed
is the TPA.
In an absolutely ideal world, every citizen in our community would have an
individual EHR available at the desktop of every physician and caregiverin the
community. Because populating the EHR requires claims flowing through the
InforMed data warehouse, this would require that every claim produced by every
provider find its way to InforMed, which is unlikely to happen in the near future.
Although the EHR will be of optimal value if it contains all information for all patients,
it is not valueless if it only contains information for all patients covered by clinical
integration contracts. THP's physicians will need some means of seeing for those
patients whether the guideline-directed care has been delivered.
THP intends to populate the InforMed data warehouse with claims data from the
plans with which it contracts. THP will negotiate with payers interested in purchasing
THP's program to ensure the payers furnish the data that populates the inforMed data
warehouse. THP is aware that CareFirst BlueCross BlueShield currently makes claims
data available to InforMed for other client arrangements. If payers are unable to
furnish the data, THP's fall-back position is to obtain the claims data from its members.
THP's member participation contract requires all THP members to submit duplicate
claims to InforMed upon request. Because of the challenges of collecting claims data
from hundreds of physicians, as opposed to the handful of payers, data collection from
the members is likely to be a short-term requirement of program participation.
THP's current clients, including the WCHSI Plan, chiefly relate to inforMed for
TP A services-claims adjUdication and payment, membership enrollment, stop loss
insurance placement, etc. THP's relationship with InforMed, however, is more as the
technology support company. The obvious strength of this relationship is the
availability of the ERR, in addition to the medical management suite of software

o B E R I~o~£c!l
David M. Narrow, Esq.
July 18, 2008
Page 22 of38
(MMOTS - Medical Management Outcomes Tracking Software). 6 The real value
InforMed provides THP is its data warehouse capabilities. 	.
Once THP begins to sell its program, it anticipates that InforMed will continue
to serve existing self-insured clients in our market as the TPA. InforMed may even
develop additional TP A business as a result of its relationship with THP. In fact, THP
would prefer that future self-insured clients choose InforMed as their TPA because of
the excellent working relationship developed over the years between the two parties.
THP, however, does not need InforMed as the TPA for any of its future clients
who purchase its programs, including self-insured clients. When THP's plan to sell its
programs to the major payers comes to fruition, it is not expected that InforMed will be
involved in any role other than THP's data warehouse, software development, and
technology vendor. What InforMed cannot bring to THP are fully-insured, major
purchasers. In addition, due to its lack of physical presence in the community,
InforMed has been relatively unsuccessful at bringing self-insured clients to THP.
Since our letter of July 9,
JH"l.U"i~"'l of business developrneIilt.
Again,
serves as the 	A to these 	new 	the only
expectation of InforMed is that it will continue to serve as THP's data warehouse,
software development, and technology vendor.
VI. 	Diabetes Management Program
On February 1, 2005, THP implemented a three-year diabetes management
program (the "Program") on behalf of the WCHSI Plan. The Program was intended to
demonstrate that intensive care management of a population, combined with a network of
cooperating and collaborating physicians, could have a positive impact on the health of
these Plan members. THP's Quality AssurancelUtilization Management Committee
developed, and had continual oversight over, the program. THP was confident of its
ability to manage this program and put $81,577 at risk. If there were Plan savings, THP
would receive 50 percent of those savings up to $81,577 (the "stop loss" point), but if
there were no savings, THP would reimburse the Plan 50 percent of the downside up to
the stop loss point. Due to the successful results of the program, the THP's share of the
savings was $79,949.
6 Of note is InforMed developed the EHR with the active support and involvement of the THP QAlUM
Committee and management.

o B E R If~.l-C!!
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July 18, 2008
Page 23 of38
A. 	Program Design
The Plan agreed to the following THP recommendations for the Program:
1.
2.
3.
4.
5.
6.
The period 2/1/2004 to 1131/2005 served as the baseline year. The costs of
managing this population were calculated along with baseline clinical and utilization
metrics. The Plan agreed that the annual costs during the Program would be adjusted
each year for comparison to the base year to account for:
1. 	Cost increases due to inpatient care rate increases granted by the Maryland
Health Service Cost Review Commission ("HSCRC").
2. 	Expected increased costs due to the natural progression ofthe disease,
determined by the ADA to be five percent per year.
3. 	Cost increases due to the addition of a bariatric surgery benefit, a benefit
not available to Plan members during the base year. 	.
B. 	Physician Involvement
THP's physicians' engagement and cooperation were critical to the success of the
program. Specific physician engagement in the program included:
1. 	The QAlUM Committee developed the program and monitored the
program to ensure success.
2. 	THP's Medical Director held meetings at which the member physicians
engaged in a dialogue with THP's staff about the best means by which the
staff could support the physicians in implementation of the program.

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David M. Narrow, Esq.
July 18, 2008
Page 24 of38
3. 	THP physician members worked closely with THP's Disease Managers to
ensure patients received proper medications, appropriate testing was
ordered in accordance with the time guidelines, patient were properly
encouraged to comply with treatment regimens.
4. 	Disease Managers encouraged patients to discuss and address health issues
with their primary care physicians and would let physicians know about
patient issues, facilitating timelier and better focused treatment.
1.
2.
3.
4.
1.
2.
3.
4.
5.
C. 	Population Clinical Results
D. 	Population Utilization Results
a. 	THP and its physicians successfully directed the right care to the
right setting at the right time.

o B E R I~~i1J;!
David M. Narrow, Esq.
July 18, 2008
Page 25 of38
b. 	THP and its physicians decreased the Program population's use of
high-cost acute-care settings, including the emergency room.
c. 	Patients who were admitted to the hospital required more intensive
resources, as evidenced by a.percent increase in the per diem
costs over the Program (an amount not entirely attributable to
HSCRC rate increases).
d. 	Patients who were admitted to the hospital, despite being more
complex than admittees in the baseline year (as evidenced by the
per diem increases). had shorter lengths of stay.
e. 	Physician-patient bonding was enhanced for both established and
new patients; patients not being seen enough were being seen more
often, and diabetic patients previously not obtaining preventive
care were successfully directed to physicians' offices.
E. 	Population Financial Results
1. 	Overall, the Plan experienced a $159,898 reduction in total costs for this
population during the 3-year period. Thus, THP physician performance
was rewarded with 50 percent of these savings, or $79,949.
2. 	The Plan experienced a .percent increase in medical management
costs, paid to THP for managing this population. The medical
management return on investment (ROJ) was conservatively calculated at
... somewhat better than commercially available disease management
programs.
F. 	Conclusions
THP and its member physicians are extraordinarily proud and pleased with the
results of the Program. Physician participation in this demonstration project was
voluntary. All physicians and practice groups with diabetic Plan enrollees cooperated in
the program, with the exception of one primary care practice that did not initially commit
to the Program but later agreed to participate.
Clearly, physician engagement and cooperation, with excellent support from THP
staff, resulted in a successful program. Highly personalized disease case management,
coupled with a motivated community of physicians, resulted in a positive impact on a
small (190) patient population with a disease particularly challenging to manage.

.'
o B E R I!<~r!.~
David M. Narrow, Esq.
July 18, 2008
Page 26 of38
Utilizing lessons learned from the Program and the technology tools provided by
InforMed, THP and its member physicians are optimistic that the lessons from this
experience can be extrapolated to the clinical integration program-a larger-scale quality-
and cost-improvement effort that will cover mUltiple diseases for a significantly larger
patient population and require active cooperation and engagement by all members of
THP. A positive advisory opinion from the FTC will permit THP and its physicians to
begin discussions with the other health plans in the THP market area, allowing THP to
reach other community members who can benefit from THP's emerging clinical
integration strategy and its medical management programs.
VII. 	Differences and Similarities Between Current and Future Operations
The following answers respond to questions raised on page 4 of your letter.
What aspects of, or programs or activities tbat will be part of, the proposed
clinical integration program are currently in place or operating with regard to
TriState's provision of services under its existing contracts?
With regard to services provided currently to payers under THP's existing
contracts, THP will continue to offer:
1. 	Delegated credentialing. THP's credentialing program exceeds the
standards set by NCQA.
2. 	Utilization, disease, case, and pharmacy management. The fun medical
management services that THP currently sells health benefit plans will still
be available for purchase. THP will, however, incorporate certain aspects
of these services into its clinical integration program, as explained more
fully below.
3. 	Online referral management. The referral management program on the
THP/lnforMed web site is currently only used for InforMed-contracted
plans. Following implementation of the clinical integration program, THP
providers will use the software to initiate all referrals for THP-contracted
plan enrollees.
4. 	Utilization of the Symmetry software suite on the InforMed site. The
ETG, ERG, and EBM Connect software are currently used by THP staff to
provide information to contracted payers. This will continue. Currently,
THP committees make limited use of the software, but that will change
under c1inical integration. Few THP member physicians even know about

o B E R llio~c!.~
David M. Narrow, Esq.
Ju1y 18, 2008
Page 27 of38
this software right now, but that will soon change as is explained more
fully below.
5. 	Health Risk Assessments ("HRA") - THP utilizes a commercially
available disease risk assessment tool from BioSignia (Know Your
Number) that serves as not only a robust predictor of risk for t~n major
diseases but also as -a powerful tool to reflect the percentage of that risk
that is patient-modifiable through targeted lifestyle changes.
Current interactions between THP and its member physician offices are currently
confined to limited activities, all of which will continue under the proposed clinical
integration program. These activities include:
1. 	Credentialing and recredentialing, including site surveys. This comprises
close to 80% of the current interaction between THP and its member
offices.
2. 	Administrative assistance solving providers' problems with InforMed and
THP clients.
3. 	Training assistance to the office staff on the referral management and
eligibility verification components of the InforMed software.
4. 	Issuing passwords to the InforMed site for new employees and "resetting"
passwords when required.
5. 	Nurse case managers interact with office staff and member physicians on a
situational dependent, case-by-case basis. including support to the WCHSI
Plan diabetes disease management program described above.
6. 	Provision of "value add" services to the membership; such as group
purchasing of supplies and group discounts from a collection agency.
Please explain exactly how the proposed program will differ from existing
practices and programs of TriState.
The proposed clinical integration program will see significantly increased
interaction between THP member physicians and between THP and its member physician
offices. These activities will include:
1. 	Utilization of the EHR - All physicians will be expected to access and
utilize the EHR as the main tool for ensuring a high degree of cooperation,
collaboration, and mutual interdependence, which are lacking under the
current model. THP will be monitoring closely the "hits" to the EHR from
its members to ensure the expected utilization and will work with those

o B E R IfPrm~JCo~
David M. Narrow, Esq.
July 18, 2008
Page 28 of38
that may be less than compliant in utilization. THP's physician leadership
expects that significant utilization of the tool will result in such
improvements as virtual elimination of duplicate and/or unnecessary
diagnostic tests, increased compliance with prescription drug utilization,
increased communication between physicians on coordinated-care plans,
increased evidence-based-medicine compliance, and improved patient
education. All plans with which THP contracts will be expected to furnish
data to the THP/InforMed data warehouse to populate the EHR.
2. 	Clinical Guidelines - The QIC, with the assistance of many THP
members, continues to develop clinical practice guidelines in anticipation
of a favorable advisory opinion and. the subsequent implementation of the
clinical integration program. It is the objective of the QIC to create at
least one guideline for each medical specialty THP's members represent.
Every physician will be required to comply with the guidelines applicable
to their patients.
3. 	Performance Improvement - Utilizing both the ETG and EBM Connect
components of the software, THP's QIC and staffwiJI identify both over-
and under-utilization by THP physicians and use that information to work
with THP's members on performance improvement activities, with the
combined objectives of identifying and promoting "best practices" and
moving the mean on key quality indicators (e.g., increasing colorectal
cancer screening compliance, lowering HbA 1C percentage scores, and
monitoring and improving lipid profile scores). As explained more fully
in Section IIIabov€::, TIIP also intends to make use of peer education
opportunities.
4. 	Cost Containment Measures - THP's QAlUM committee, with the support
of THP' s staff, wil1 monitor the cost of care for, and use of resources by,
each physician. Using report cards, THP will provide feedback to the
physicians with comparisons to not only their THP peers but also to
regional and national benchmarks. Physicians identified as high cost
providers, andlor over/under consumers of resources, will receive
assistance from THP staff and case managers and, if necessary, counseling
from peer physicians.
5. 	Patient Compliance Assistance - The nurse case managers, when
requested by a physician, will monitor compliance metrics and work with
the physician and patient to increase compliance. Physicians who do not
avail themselves of this support will be monitored to ensure that they are
practicing to program standards and, if they are not, the QIC may
recommend intervention by the nurse case managers where appropriate.

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6. 	Wellness Programs - THP will be developing additional wellness
programs with the expectation that its member physicians participate not
only in program development but also in supporting and promoting these
programs.
7. 	HRA - Currently, THP highly encourages HRA participants to share the
results of their profile with their physicians, but THP does no follow up.
After implementation of the clinical integration program, THP and the
physicians will work together with the participants to assist them in
modifying and lowering their risk.
8. 	Phannacy Assistance - THP currently conducts focused pharmacy reviews
only on patients with chronic diseases. Under the clinical integration
program, THP will add to this service assistance with phannacy pre-
authorizations and methodologies for increasing generic utilization. A
long-term THP objective is for the Pharmacy Benefits Management
Committee to develop a single formulary that will apply to all payers
contracting with THP.
9. 	Coding Assistance - As the ERR. is populated with claims data, it is
imperative that procedure and diagnosis coding is accurate and thorough ..
While the THP leadership fully recognizes that the data "is what it is," it
also recognizes that there always will be room for improvement to make
the EHR more relevant and actionable· 	.
working closely with its member physicians and their office staffs to
ensure appropriate coding.
How will the proposed program differ from the utilization and medical.
management services currently provided by TriState through its arrangement with
InforMed and its CHP network?
The utilization and medical management services provided by THP currently
benefit 	those clients who 	. 	. 	such as the WCHSI
Payers with which
THP contracts under the clinical integration program will be encouraged, and possibly
receive special financial incentives, to utilize THP's utilization, case, medical and disease
management programs in order to ensure a more seamless provision of care. THP
recognizes, however, that the major plans in the THP market have invested significant

o B E R I!i~J-c~~
David M. Narrow, Esq.
July 18, 2008
Page 30 of38
resources in providing these services and may not wish to outsource them. Regardless,
they will be required to furnish enrollment and claims data to THP in order to populate
theEHR.
It is important to note that THP's current utilization and medical management
services are primarily provided by THP staff, not its member physicians. Thus, they are
supplemental services that can greatly benefit, but are not central to, TIIP's clinical
integration program, under which physicians will be the key service providers. The
utilization management under clinical integration will be done by the QAIUM and QIC
committees and will focus more on the use of resources by THP's physicians, as
explained above. For plans that do not purchase medical and disease management, THP
physicians will have the assistance ofTHP's nurse case managers for working with high-
cost and non-compliant patients, so that the physicians will still be able to attain quality
and cost benchmarks.
VIII. 	THP Staffing Update
THP continues to develop infrastructure to support the PHD and its clinical
integration programs. Since our letter of July 9,2007, two additional positions have
been added and there has been turnover in one manager position.

o B E R I~~~c!.~
David M. Narrow, Esq.
July 18, 2008
Page 31 of38

o B E R I~~__~~~
David M. Narrow, Esq.
July 18, 2008
Page 32 of38
IX. 	Payer Interest
THP has presented its clinical integration strategy and use of technology tools to
the administrative and clinical leadership of United Healthcare, Coventry and Maryland
Physicians Care, and to the local medical director of Aetna. The concept has been
presented to the administrative leadership of CareFirst BlueCross BlueShield and to
Today's Options, a Medicare private-fee-for-service program that also will be offering
PPO and HMO products in the THP market in 2009. No negotiations have ensued with
any of these plans.
1. 	United Healthcare, through its subsidiary Ingenix, owns the Symmetry
suite of software that InforMed has implemented to support THP's
program. In the summer of 2006, several senior level executives -
including a medical director and an information technology senior vice
president - visited THP for a 4-hour presentation on the EHR. Due to
our ability to capture lab values plus mental health and pharmacy data,
United was intrigued by our progress with the technology, admitting that
they were not able to use the technology in such a way so as to deliver
actionable infonnation directly to a physician desktop. A United senior
vice president has indicated that United is keenly interested in working
with THP once THP has a favorable advisory opinion. United
understands and supports the decision not to move forward with any
negotiations until the advisory opinion is received. It is noteworthy to
mention that the United executive contacts THP on a quarterly basis to
inquire about THP's progress.
United purchased MAMSI Health Plans about three years ago.
MAMSI's entire senior management team, including the local president,

o B E R I!<~~JCo~~~
David M. Narrow. Esq.
July 18, 2008
Page 33 of38
2.
3.
have also visited THP and participated in a demonstration. It was their
keen interest 	to
United.
significant surprise that any provider would be thinking the way THP
was thinking; this was a first for him. TIfP is optimistic that United,
once it is able to resolve the hurdle offumishing claims data to THP's
data warehouse, will be an important future partner.
UnitedIMAMSI is the second largest commercial payer in the
Washington County market.
C 	fD I 	h 	W 	h'	. 	. 	~ 	c 	k
Coventry is seeking any and all strategies that will enhance its value to
employers in our market. Senior executives and the plan medical
director have visited, reviewed the technology, and, like United, await
the opportunity potentially to partner with us.
4. 	The local Aetna medical director has visited and reviewed the
technology, This physician was clearly 'tnn,rp<:<:pt1
wants to be 	abreast of
5, 	Senior leadership ofTHP, Washington County Hospital, and CareFirst
BI 	C 	BI 	Shi ld h 	d' 	d th 	cr 'c I 'nte r f 	n 	ro ram in	~ 	. ~
•

o B E R I~~Cw~.I~
David M. Narrow, Esq.
July 18, 2008
Page 34 of38
6. 	Today's Options is a Medicare Advantage plan currently offering only a
private-fee-for-service (PFPS) product in our market. However, Today's
Options anticipates a migration of the PPPS popUlation to HMO and
PPO products. This will result if Congress takes much-anticipated
action on reducing outlays to the PFFS product, a product that has cost
the federal government, on average, 19 percent more than traditional
Medicare.
Once a favorable advisory opinion is received, THP intends to begin active
discussions with the self-insured 	under 	WCHSI Plan,
United, Today's
Irst. 	e are 	payers 	give us the platform
from which to introduce the program to virtually all payers, including other
governmental programs.
X. 	Pay-for-performance
As noted in the advisory opinion request, THP intends to work with payers to
develop a pay-for-performance ("P4P") model under which THP physicians will have
one set of guidelines and will be held to one set of performance measures, across all
payers, for those guidelines. The following are your questions and our responses
regarding P4P:
Regarding the discussion in your initial submission of a future "pay-for-
performance" component of TriState's operations, it is our understanding- that
your current request for an advisory opinion is not premised on an assertion of
financial integration among TriState's physicians based on this possible future

o B E R I~~~~Co~~
David M. Narrow, Esq.
July 18, 2008
Page 35 of38
activity. However, you state that, in order to implement that program, "TriState
believes that it will need to collect a year or more·ofperformance data from its
physicians, showing the success of its clinical integration strategy for self-insured
employers and smaller payers. Thus, it will need to contract on a fee-for-service
basis for some period before it is able to implement its P4P program." It is not
clear whether you therefore are separately asserting that such fee-for-service
contracting is justified at this time as reasonably necessary (i.e., "ancillary") to
implementing a financially integrated, efficiency enhancing, joint venture among
TriState physicians in the future.
THP is not requesting an advisory opinion as to whether its proposed P4P
program will result in sufficient financial integration to justify joint contracting.
Because THP has not been able to engage in contract-tenn discussions with payers,
THP is unsure whether payers will initially include P4P in their contracts with THP
and, if they do, what amount of money the payers may place "at risk" for THP meeting
specified benchmarks on a set ofperfonnance measures. Without knowing the amount
at risk, there is no way for THP, or the FTC staff, to assess whether the amount at risk
would provide sufficient incentive to THP's members to work cooperatively to control
costs and improve qUality.
Although it is possible that THP's P4P program could result in financial
integration of its members at some point in the future, THP intends for the P4P program
to supplement its clinical integration program and provide a means of partnering with
the payers to achieve quality and cost efficiencies. As such, THP is not claiming that
its fee-for-service contracting with payers for its clinically integrated product is
ancillary to implementing the P4P program.
THP's statement in its July 9,2007 letter regarding the need to collect a year or
more of data and provide payers evidence of the clinical integration program's success
prior to implementing its P4P program was not intended to raise questions as to the
legality of the P4P contracting methodology, or joint contracting for the clinical
integration product. Rather, the statement was directly related to the preceding
supposition regarding payers' potential reticence to set aside their own P4P models.
Several of the large payers who have expressed interest in THP's program (as explained
above in Section IX) currently have their own P4P programs. If these payers contract
with THP on a P4P basis in the first year, they will likely insist that THP participate in
the payers' own P4P programs. Hence, THP's argument that payers will most likely
need evidence of the clinical integration program's success-achievement of the
payers' P4P goals-before those payers will be willing to work cooperatively with
THP.

OBER 1~~1£~
David M. Narrow, Esq.
July 18, 2008
Page 36 of38
XI. 	Questions Regarding the Justification for Joint Contracting
In your letter, you raised a number of questions regarding THP's need to
contract on the collective behalf of member physicians and its asserted justifications. A
number of questions raised on pages 4 and 5 relating to the contract physicians are no
longer relevant, due to THP's elimination of contract physicians. The following should
address the remaining issues.
How does TriState's proposed program assure that it will have "the same
network for aU integrated product contracts?" Specifically, why isn't TriState's
policy of allowing additional pbysicians to join TriState at any time and
participate in tbe clinical integration program-whicb necessarily will change the
composition of the network-inconsistent with tbis rationale?
As explained in Section II above, THP has made the decision to close the PHO
after an initial period and to only allow new members to join in limited circumstances.
With this new policy in place, THP anticipates that additions and deletions will be
minimal, and THP's clinical integration network should remain fairly unifonn after
program implementation. There is no expectation that limited additions will have any
affect on THP's ability to achieve its efficiency goals, and it is likely that payers and
patients will welcome additions, particularly where they fill gaps in THP's network.
The minimal additions also should not adversely affect THP's joint contracting
rationale of ensuring the same network for all integrated product contracts.
In your discussion of the need for joint contracting through TriState, you
state (page 29 of your initial submission) that "[a]bsent assurance of participation
in TriState's contracts, and thus a share of the revenue generated by those
contracts, the physicians would have less incentive to devote substantial time" to
the various activities necessary to successfully implement the proposed program.
While we understand that physicians may need to recover the opportunity costs of
their participation in a program that requires additional time and effort on their
part, or desire to make a profit from development of such a program, it is not
apparent why that payment or profit needs to come from presumably higher,
jointly agreed upon, fee-for-service charge levels by the physicians for their
underlying medical services provided'under the program.
Although THP does hope to sell a premium product for a premium price, THP
did not intend to suggest that THP physicians will not participate in the clinical
integration program unless they get paid more than they do currently. Rather, THP
physicians will not have a reason to invest their time and effort into the program if they
are not guaranteed participation in the THP payer contracts (regardless of the level of
reimbursement they receive). Without such investments, the program will not be
successful.

OBERI~~!l
David M. Narrow, Esq.
July 18, 2008
Page 37 of38
XII. 	Market Power Questions
In a recent conversation, you asked whether THP, or THP in combination with
WCHSI or its subsidiaries, would have market power in medical services markets or
insurance markets. The answer is no.
A. 	THP Will not Have Market Power in the Physician Services Market
As we explained in our July 9, 2007 letter, THP will be a non-exclusive network,
and, therefore, payers will remain completely free to contract with its participating
providers directly or through other organizations. Accordingly, were THP to attempt to
exercise market power by raising prices for physician services above competitive,
quality-adjusted levels, payers could simply refuse to contract with THP and purchase
physician services through other venues. As a result ofTHP's non-exclusivity, payers
will be able to defeat any attempt by THP to exercise market power. To obtain payer .
contracts, THP will have to price its clinical integration product competitively.
B. 	THP and WCHA Will not Engage in an Illegal Tying Arrangement
We understand that concern exists that THP may condition the sale of hospital
services on payers' purchasing physician services from it. THP has not tied, and will not
tie, hospital services and physician services in contracting with its customers.
WCHA also will not tie the sale of its hospital services to payers' purchasing
THP's physician services. WCHSI and WCHA are supportive ofTHP's clinical
integration program and have much to gain, as discussed above, from THP's success. 7
THP wiU actively market its clinical integration product to payers and, if asked regarding
THP's performance, WCHSI representatives will share their Plan's positive experiences
indicating that THP can deliver a superior product. 	But WCHA will not force any payer
to buy THP's clinically integrated product bl conditioning the sale ofWCHA's hospital
services on the payer contracting with THP.
7 See the discussion in Section IV regarding the advantages and disadvantages to WCHA for its
participation in THP. 	.
THP and WCHA understand that the advisory opinion will be based on their representations. Assuming
that the opinion is positive (i.e., Commission staffwill not recommend an enforcement action ifTHP
proceeds with implementation), both parties know that engaging in activities counter to their
representations could result in rescission of the opinion and an enforcement action by the Commission.

OBERI~~"k!~
David M. Narrow, Esq.
July 18, 2008
Page 38 of38
C. 	THP and WCBSI Cannot Monopolize the Private Insurance Market
THP and WCHSI, through its subsidiaries, sell products and services to self~
insured employers and health insurance plans. Neither THP nor WCHSI sell private
health insurance. 9 A company cannot monopolize or attempt to monopolize a market in
which it does not compete. Therefore, THP, by itself or through some arrangement with
WCHSI, cannot monopolize, attempt to monopolize, or obtain any market power at all in
the market for private health insurance.
****************************
THP appreciates the opportunity to respond to your questions and concerns.
They have attempted to respond to your questions in as complete a manner as possible.
If you have any questions regarding any of the above responses or any additional
questions or concerns with their proposed program, please let me know.
Best regards,
Enclosures
9 WCHSI and three other health systems own Maryland Physicians Care, a Maryland Managed Care
Organization that is licensed to provide health care services to Medicaid enrollees in Maryland's
HealthChoice program.

Exhibit 	A

WCHSI 	TRISTATE
SPECIALTY 	EMPLOYED s MEMBERS s 	TOTALs
Allergy, AsthmalImmunology 	0 	2 (1) 	2(1)
Anesthesiology 	0 	9 (1J 	9(11
Cardiology 	0 	14 (4) 	14 (4)
Dermatology 	0 	3 (2) 	3 (2)
Endocrinology 	1 (1) 	1 (I) 	2{2)
Family Practice 	12(4) 	14 (9) 	26 (13)
Gastroenterology 	4 (1) 	4 (2) 	8 (3)
General Surgery 	1 (1) 	7 (6) 	8 (7)
G~ecology 	0 	IJ1) 	1 (1)
Internal Medicine Primary Care 	12 (4) 	18 (13) 	30 (17)
Medical Oncolo~ 	0 	1 (1) 	1 (1)
Nephrology 	0 	2 (1) 	2 (1)
Neurology 	0 	7 (5) 	7(5)
Neurosurgery 	0 	4 (1) 	4 (1)
Nuclear MedicinelNuclear Cardiology 	1 (1) 	0 	1 (I)
Obstetrics/Gynecology 	6 (2) 	8(3) 	14 (5)
Ophthalmology 	0 	2 (2) 	2 (2)
Oral & Maxillofacial Surgery 	0 	5 (2) 	5 (2)
Orthopedics 	1 (1) 	12 (3) 	13 (4)
Otolaryngology 	0 	7 (3) 	7 (3)
Pain Management 	0 	4 (3) 	4 (3)
Pathology 	0 	4 (1) 	4(1)
Pediatrics Primary Care 	0 	12(4) 	12{4)
Physical MedicinelRehabilitation 	0 	4 (2) 	4 (2)
Plastic Surgery 	0 	1 (1) 	1 (1)
Podiatry 	0 	8 (3) 	8 (3)
Psychiatry 	3 (1) 	0 	3 (1)
Pulmonary Disease 	0 	5 (1) 	5 (1)
Radiation Oncology 	0 	1 (1) 	1 (l)
Radiology 	0 	10 (1) 	10 (l)
Urology 	0 	1 (1) 	1(1)
TOTALS 	41 	171 	212
19% 	81% 	100%
SThe first numbers in the column represent the total number of TriState physicians in each specialty, and
the number in parentheses represent the number of medical groups within which those physicians practice.
Revised July 8, 2008

Exhibit 	B

TRISTATE MEMBER
PARTICIPATING PROVIDER CONTRACT - CLINICAL INTEGRATION
This participating provider contract ("Contract") 	is made as of this 	__ day of
_____, 200_ between Tri~State Health Partners, Inc. ("THP"), a Maryland nonstock
corporation, and the provider identified below ("Provider"), who is a member of THP.
PROVIDER:
Name: ------------------
Address: ------------------
Telephone Number: ______________
Medical Specialty: ____________

Braun, Christi J.
From:
Sent:
To:
Subject:
David,
Braun, Christi J.
Thursday, February 26, 2009 1:50 PM
'dnarrow@ftc.gov'
THP TriState Health Partners
The following responds to your e-mailed questions of February 18, 2009.
01: The statistics you provided regarding payer penetration/percentage of covered lives in the "market" did not specify
whether they referred to TriStatelWCHA's primary service area (essentially Washington County, MD), to the larger
secondary service area, or equally to both.
A 1: We assume your question relates to the information in the paragraph under Section II.C. of the request letter. The
statistics represent the payer mix of the majority of WCHSI business units (Le., WCHA, Medical Practices of Antietam,
Hagerstown Medical Laboratory, and the joint ventures including Robinwood Diagnostic Imaging Services, Endoscopy
Center at Robinwood, and Robinwood Surgery Center). That is, the statements in the section explain who pays for the
services WCHSI provides to patients. 	Thus, in answer to your question, the service area referred to is WCHSl's service
area, which is the area from which more than 90% of WCHSl's patients come. THP has no reason to believe, though,
that the statistics would be different if it looked only at patients residing in Washington County, Maryland, which is roughly
its primary service area.
Recently, WCHSI completed a review of its payer mix for fiscal year 2008. The numbers that would replace those in
Section II.C for 2008 are: self-pay 4.4%; Medicare, Medicaid and TriCare 48.3%; workers comp 1.2%; and all other
(includes private health insurance and self-insured employers) 46.1%. CareFirst BCBS and United/MAMSI were 70.9%
of all other.
THP does not have access to the payers' actual market share numbers for either the primary service area or secondary
service area. It believes, though, that WCHSl's payer mix provides a fairly accurate approximation of payer market
shares for two reasons. First, WCHSI is an in-network participant for all third-party payers, so there is no financial
incentive for patients to avoid seeking care from WCHSI providers. Second, WCHSl's payer mix is calculated across a
broad range of health care provider types (in-patient and out-patient hospital, physician, urgent care, lab, diagnostic
imaging, and ASC services) and is, therefore, likely to have provided services to a broad section of the populations of
both the primary and secondary service markets.
02: Re the Board. It consists of eight Class I representatives and five Class II representatives, appointed by WCHA. One
of the Class I Board members must be a "hospital-based" physician. Can he/she be a hospital-employed physician? Are
physicians employed by WCHAlWCHSI Class I members? If so, can WCHA effectively have a majority of the TriState
Board, through its five Class II member representatives plus some Class I members who are its or its affiliates' (e.g.,
Antietem's) employees?
A2a: The individual currently filling the THP Board position of "hospital-based" physician is not employed by WCHA or
Antietam. In fact, all hospital-based Class I members currently are employed by their own PA or PC. Thus, at this time,
no hospital-based physician Board member could be a hospital-employed physician.
A2b: Physicians employed by WCHAlWCHSI can serve as Class I directors. To do so, they must be elected by the
affirmative vote of a majority of Class I Members at a meeting at which at least 25 percent of all Class I Members are
present.
A2c: You ask whether WCHA (or WCHSI) could employ a majority of the Board. We think what you actually want to know
is whether WCHA (or WCHSI) could ever employ enough of the THP Board members to control the Board. Employing a
majority would not give THP control of the Board. To actually control the decisions of the Board, WCHSI would need to
employ at least five of the Class I Directors, or 10 out of the 13 Board positions. The reason is that, under Section. of
1

the Bylaws, an act of the Board requires an affirmative vote of a majority of Class I Directors present and an affirmative
vote of a majority of Class II Directors present.
In the highly unlikely event that THP's physician members were i
Class I Board 	could not do so.
employed by WCHSI (inclusive of its subsidiaries) can
horotnlro neither WCHA nor WCHSI will ever employ five Class I
In addition, one should not assume that a hospital-employed physician would automatically vote in the same manner as
the hospital, particularly if the decision would go against the wishes of the peers who elected him or her.
Please let me know if you need additional clarification of any of the above answers.
-Christi
Christi J. Braun, Esq.
202-326-5046
cjbraun@ober.com
OBERIKALER
Attorneys at Law
www.ober.com
202-336-5246 - Fax
1401 H Street, NW, Suite 500
Washington, DC 20005
2

Ober. Kaler, Grimes & Shriver
Attorneys at Law
1401 H Street. NW, Suite 500
Washington, DC 20005-3324
202-408-8400 Fax 202-408-0640
www.ober.com
Mr. Donald S. Clark
Secretary
Federal Trade Commission
600 Pennsylvania Avenue, N.W.
Washington, D.C. 20580
Dear Mr. Clark:
May 8, 2009
Christi J. Braun
cjbraun@ober.com
202-326-5046
202-336-5246 Fax
Offices In
Maryland
Washington, D.C.
Virginia
On April 13, 2009, Commission staff in the Health Care Products & Services
Division issued an advisory opinion to TriState Health Partners, Inc. ("TriState"). I have
been informed that the Commission would like to post TriState's submissions to the
Commission and Commission staff on the FTC's web site with the advisory opinion. In its
advisory opinion request and follow-up submissions, TriState complied with FTC Procedure
Rule 4.9(c), 16 C.F.R. § 4.9(c), designating certain information and documents as
"confidential" and requesting that it be withheld from the public record under FTC Procedure
Rule 4.10, 16 C.F.R. § 4.10(a)(2), and § 6(f) ofthe Federal Trade Commission Act, 15
U.S.C. § 46(f).
To allow the Commission to post TriState's documents on the Commission's web
site, I have redacted all confidential information and mentions of confidentiality from the
"public version" documents, which are attached to this letter. Where documents were
withheld in their entirety, there are place-holder pages. All information withheld is
competitively sensitive information, including prices, costs, and information subject to
confidentiality agreements, patents, or copyright protection.
If you have any questions regarding the attached package, please call me at (202)
326-5046.
Sincerely,
cc: David M. Narrow, Esquire
Attachment
148784.vl