South Dakota Firm Barred From Insurance Price-Negotiating

A company run by a South Dakota state lawmaker that negotiates contracts between chiropractors and insurance companies has agreed to discontinue that portion of its business after federal regulators said it violated antitrust rules.

The Justice Department accused Chiropractic Associates Ltd. of South Dakota of driving up prices for chiropractic procedures for insurance companies, patients and employers, the Argus Leader newspaper in Sioux Falls reported. The investigation was launched more than one and a half years ago, and the terms of the settlement between the company and government were released this week.

The settlement needs the approval of a federal judge. Chiropractic Associates does not admit to violating the law. The agreement also extends to the company’s operations in North Dakota, Minnesota and Iowa.

Chiropractic Associates is a preferred provider organization that negotiates contracts for its doctor members with health insurance companies. The company’s practices resulted in increased prices for chiropractic services in South Dakota, said Bill Baer, assistant attorney general in charge of the Justice Department’s Antitrust Division.

The settlement “promotes competition among health care providers and prevents collective action that harms consumers and violates the antitrust laws,” he said.

The company’s president is Scott Munsterman, a Republican state representative from Brookings who finished second in the 2010 Republican primary race for governor. He also is a chiropractor and a former mayor of Brookings. He deferred comment to his attorney, Mark Jacobson, an antitrust attorney in Minneapolis.

Jacobson said that Chiropractic Associates can do just about everything it could before – such as certifying chiropractors – but it can no longer negotiate actual reimbursement rates for doctors. Chiropractors now will have to do that on their own.

“It made more sense to put this behind us than to continue to spend time and effort battling the federal government,” Jacobson said.