Government Settles Antitrust Suit Challenging Wage-Setting By Nurse Registry

Action: The Antitrust Division of the United States Department of Justice (DOJ) and the State of Arizona reached a settlement with the Arizona Hospital and Healthcare Association (AzHHA), and one of its subsidiaries (which offered its members nurse registry options) to end a lawsuit that challenged, on antitrust grounds, AzHHA's group purchasing organization for temporary nursing services.

Impact: The government's challenge of the AzHHA nurse registry program emphasizes the government's concern over anti-competitive practices associated with nurse wages as well as the potential anticompetitive aspects of group purchasing programs, particularly where a combination of purchasers possesses market power that enables it to depress prices to below competitive levels.

Effective Date: Immediately.

On May 22, 2007, the DOJ and the State of Arizona reached a settlement with AzHHA, and one of its subsidiaries, to end a lawsuit that challenged, on antitrust grounds, AzHHA's group purchasing organization for temporary nursing services.

The AzHHA Program

AzHHA operated a group purchasing program, the AzHHA Registry, for temporary nursing services. The program included a Per Diem Registry, which operated separate registries for per diem nursing personnel in Northern Arizona and Southern Arizona. The program also included a registry for travel nursing personnel throughout Arizona called the Travel Registry. The registries covered various types of nursing personnel, including RNs, LPNs, CNAs, operating room technicians, behavioral health technicians, and sitters.

The AzHHA Registry began in 1988 with a focus on quality and, thus, established standards for the staff and record-keeping procedures of participating temporary nurse staffing agencies, and conducted regular audits of the participating staffing agencies to ensure compliance with its quality standards. In addition to quality assurance, the program required each participating staffing agency to submit a schedule of standard billing rates. Each participating hospital would individually negotiate its own discounted rate from those schedules.

AzHHA's program was later modified to set uniform rates for per diem and travel nurses. Specifically, AzHHA required all participating staffing agencies to accept a uniform rate schedule set by its Registry for all participating hospitals. Although AzHHA compiled and distributed the average agency rates to each participating hospital, the rates for the uniform...

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