FTC bans non competes

[amyl]

https://www.wsj.com/politics/policy/ftc-bans-noncompete-clauses-that-restrict-job-switching-984d2187

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[deleted1189238]

Not mega hospitals. Advocate is not for profit so not included. BS. That’s the governors job

 

[aneftp]

That’s good news

Hospitals will have to increase wages to w2 employed workers

 

[abolt18]

That’s good news

Hospitals will have to increase wages to w2 employed workers

It excludes non-profit healthcare organizations...

 

[calvnandhobbs68]

It excludes non-profit healthcare organizations...

Not explicitly, just by nature of the fact that "true nonprofits" technically don't fall under FTC juridisction. Expect this to play out in court over what constitutes a "true nonprofit" especially for systems that have ridiculous noncompetes and it's very unclear what the point of the noncompete is (ex. Cleveland Clinic).

 

[triggermaster]

It excludes non-profit healthcare organizations...

Bribes work.

 

[aneftp]

It excludes non-profit healthcare organizations...

Where does it say non profits excluded

 

[abolt18]

Not explicitly, just by nature of the fact that "true nonprofits" technically don't fall under FTC juridisction. Expect this to play out in court over what constitutes a "true nonprofit" especially for systems that have ridiculous noncompetes and it's very unclear what the point of the noncompete is (ex. Cleveland Clinic).

You are correct. I just opened the FTCs 570pg document they released which can be found in the first sentence of this link FTC Announces Rule Banning Noncompetes

But if you search the document for "non-profit" and read all relevant content, it delineates that normally a true non-profit does not fall under their jurisdiction, however many self-proclaimed non-profits DO in fact fall under their jurisdiction depending on how they behave (spending more money on themselves than on the community. Very highly paid executives. Etc.) I believe I saw estimates that 50-75%ish of non-profit healthcare organizations do actually fall under their jurisdiction. Who knows how this will play out for us.

Out of curiosity, what is so unique about Cleveland Clinic's non-compete?

 

[narcotics999]

It excludes non-profit healthcare organizations...

At least NAPA, usap will be included.

 

[calvnandhobbs68]

You are correct. I just opened the FTCs 570pg document they released which can be found in the first sentence of this link FTC Announces Rule Banning Noncompetes

But if you search the document for "non-profit" and read all relevant content, it delineates that normally a true non-profit does not fall under their jurisdiction, however many self-proclaimed non-profits DO in fact fall under their jurisdiction depending on how they behave (spending more money on themselves than on the community. Very highly paid executives. Etc.) I believe I saw estimates that 50-75%ish of non-profit healthcare organizations do actually fall under their jurisdiction. Who knows how this will play out for us.

Out of curiosity, what is so unique about Cleveland Clinic's non-compete?

I've heard it's some ridiculous thing like you can't practice in your specialty within X amount of miles from ANY location ANYWHERE. So like even if you were in Ohio you couldn't go practice within X miles of a clinic in Florida. I could be wrong though about the specifics.

 

[amyl]

Most non for profit hospitals don’t directly employ their doctors. They form a physician group kind of middle man company to employ the docs. When I worked for a non profit hospital (first job) I actually worked for Good Samaritan physician group… not good Sam hospital itself.

 

[TexasMed22]

Most non for profit hospitals don’t directly employ their doctors. They form a physician group kind of middle man company to employ the docs. When I worked for a non profit hospital (first job) I actually worked for Good Samaritan physician group… not good Sam hospital itself.

Are those physician groups for-proft? I would guess yes but I don't know for sure

 

[Status Sciaticus]

Are those physician groups for-proft? I would guess yes but I don't know for sure

Most are. this will lead to the hospitals directly employing the doctors. They dont want to do this, because if they are directly employed by the hospital, then they can legally form a union and bargain.

 

[amyl]

How it worked at my first job was all drs worked for gsh physician group - Regardless of specialty. It was a for profit company. It allowed for negotiating health plans etc. but got around the direct hospital employment and would also get around this non compete non profit language.
I don’t have the whole list of states in which hospitals can’t employ drs directly but Texas and California come to mind… anyone have the whole list?
As the wife of a pilot I can say omg yes!!!! Unionize is an amazing idea. The unions have done wonders for pilots contracts

 

[GravelRider]

Obviously the business community will challenge this and it may even be decided by the Supreme Court in the future where it is almost certainly going to fail. Even beyond those hurdles, I’m not sure this really does anything until there is widespread precedent that these non-competes are either unenforceable or not being enforced. A non-compete, at least as it pertains to our specialty, is mainly a fear-based tool to prevent competition. Most anesthesiologists are not going to challenge a non-compete even if it is a winnable challenge because of the legal hassle and expense to do so.

tl;dr: Don’t take a dump in your boss’s office…yet.

 

[circleK]

“In addition, although the Commission recognized that it does not have jurisdiction over not-for-profit entities, it reserved the right to evaluate an entity’s non-profit status and noted that some “entities that claim tax-exempt nonprofit status may in fact fall under the Commission’s jurisdiction.” Specifically, it stated that “some portion of the 58% of hospitals that claim tax-exempt status as nonprofits and the 19% of hospitals that are identified as State or local government hospitals in the data cited by AHA likely fall under the Commission’s jurisdiction and the final rule’s purview“

 

[medicine2wallstreet]

Obviously the business community will challenge this and it may even be decided by the Supreme Court in the future where it is almost certainly going to fail. Even beyond those hurdles, I’m not sure this really does anything until there is widespread precedent that these non-competes are either unenforceable or not being enforced. A non-compete, at least as it pertains to our specialty, is mainly a fear-based tool to prevent competition. Most anesthesiologists are not going to challenge a non-compete even if it is a winnable challenge because of the legal hassle and expense to do so.

tl;dr: Don’t take a dump in your boss’s office…yet.

What a worthless post.

 

[Gern Blansten]

What a worthless post.

Don’t be too hard on yourself. It’s only four words and probably didn’t take that much effort. You’ll get better at it. Hang in there.

 

[Shimmy8]

How it worked at my first job was all drs worked for gsh physician group - Regardless of specialty. It was a for profit company. It allowed for negotiating health plans etc. but got around the direct hospital employment and would also get around this non compete non profit language.
I don’t have the whole list of states in which hospitals can’t employ drs directly but Texas and California come to mind… anyone have the whole list?
As the wife of a pilot I can say omg yes!!!! Unionize is an amazing idea. The unions have done wonders for pilots contracts

TN cannot employ anesthesiologists, emergency medicine physicians, and radiologists directly due to some law (probably lobbied by the AMCs in the 90s).

While this will take a while to be litigated, maybe it’ll prevent some attempted enforcement? That’s all that really matters if so.

 

[Ronin786]

“In addition, although the Commission recognized that it does not have jurisdiction over not-for-profit entities, it reserved the right to evaluate an entity’s non-profit status and noted that some “entities that claim tax-exempt nonprofit status may in fact fall under the Commission’s jurisdiction.” Specifically, it stated that “some portion of the 58% of hospitals that claim tax-exempt status as nonprofits and the 19% of hospitals that are identified as State or local government hospitals in the data cited by AHA likely fall under the Commission’s jurisdiction and the final rule’s purview“

I think this is important language. Basically if these non-profits want to enforce non-competes, they run the risk of somebody taking a serious look at their non-profit status. That's worth a lot more to them than Joe Schmoe, MD going to the shop across town.

 

[dozitgetchahi]

Most non for profit hospitals don’t directly employ their doctors. They form a physician group kind of middle man company to employ the docs. When I worked for a non profit hospital (first job) I actually worked for Good Samaritan physician group… not good Sam hospital itself.

Yup. And the “middle man company” usually is not a .org - it’s usually an actual for profit company (this was the case for the hospital I worked at, back when I had a hospital job).

 

[Dr. Rude]

This is a blade with two edges. E.g., private practice doc owned group employs docs and CRNAs all of who have a noncompete with the private practice corp. hospital can hire the CRNAs out from under the docs, more “valuable” docs can cut a separate deal with the hospital, cardiac docs can split off and do all the CT., etc., etc.

 

[amyl]

This is a blade with two edges. E.g., private practice doc owned group employs docs and CRNAs all of who have a noncompete with the private practice corp. hospital can hire the CRNAs out from under the docs, more “valuable” docs can cut a separate deal with the hospital, cardiac docs can split off and do all the CT., etc., etc.

I’m not sure that’s the same thing… non compete vs non solicitation.

Also shimmy- even though hospitals in TN cannot directly employ doctors they get around it by starting another middle man company to employ physicians… it’s kinda a bs way to make it an arms length deal… see my posts above.

 

[sbmed100]

This is a blade with two edges. E.g., private practice doc owned group employs docs and CRNAs all of who have a noncompete with the private practice corp. hospital can hire the CRNAs out from under the docs, more “valuable” docs can cut a separate deal with the hospital, cardiac docs can split off and do all the CT., etc., etc.

Yeah that's non solicitation. If the new legislation allowed what you say it would cause chaos.

 

[caligas]

So I was under the impression that the noncompete that my private group has protects our group from the hospital or am AMC hiring out our anesthesiologists from underneath us.

Was that not correct and has that protection ended?

 

[centdoc]

I think this is important language. Basically if these non-profits want to enforce non-competes, they run the risk of somebody taking a serious look at their non-profit status. That's worth a lot more to them than Joe Schmoe, MD going to the shop across town.

Exactly. Most of these “non-profits” are already breaking federal law. Per federal law, a “non-profit” hospital must allow all community physicians equal access to care for the community’s population. When a “non-profit” hospital signs an exclusive contract with a private anesthesia group and removes all other anesthesiologists from providing clinical services, this clearly eliminates equal access. The problem is that no one has taken these hospitals to task because it would be immensely expensive to do. Even when the private corps, PE groups, and even naive “non-profit” systems fight back, the FTC should win easily. And that will be to ALL of our benefit.

 

[Dr. Rude]

Yeah that's non solicitation. If the new legislation allowed what you say it would cause chaos.

Doesn't it depend on who initiates contact?

 

[sbmed100]

Doesn't it depend on who initiates contact?

Nope, doesn't matter. You just can't go work for a private GI center where you currently provide anesthesia as a member of another group no matter who's "idea" it is.

 

[Status Sciaticus]

So I was under the impression that the noncompete that my private group has protects our group from the hospital or am AMC hiring out our anesthesiologists from underneath us.

Was that not correct and has that protection ended?

Thats the lie your group feeds you. your non-compete protects your group as a whole, but not you individually. For example, if you decide to work directly with the hospital, you might get a higher direct salary since you dont have to pay for the overhead of the group or the benefits (older anesthesiologists are more expensive to insure for malpractice and health insurance which comes out of your pocket). The group would suffer because now they lost the anesthesiologist and someone to hedge the cost.

 

[periopdoc]

This is a boon for non-profit hospitals, and another nail in the coffin for private practice.

Even though the non-compete that the hospital slapped on our group is blatantly illegal, there is no case law to set precedent, and the hospital(s) will make it too expensive for any one group to take a suit as far as it needs to go to set that precedent.

However, the non-compete that I have with my partners is now illegal, no precedent needed. Assuming this ruling by the FTC stands (The Chamber of Commerce is expected to file suit against it today, and an injunction against the rule, given the Supreme Court's stance against legislation via these executive/ administrative agencies, wouldn't surprise me), the hospital can now engage in negotiations with my group's partners individually.
They can prevent us from even talking to the local ASC's, but can steal our members out from under us, if they wish.

I really wish the FTC had made it clear that "non-profit" hospitals are subject to the ruling, though I understand why they didn't. To be clear, I believe the FTC overstepped their authority here, and will eventually be slapped by the Supreme Court.

 

[Status Sciaticus]

This is a boon for non-profit hospitals, and another nail in the coffin for private practice.

Even though the non-compete that the hospital slapped on our group is blatantly illegal, there is no case law to set precedent, and the hospital(s) will make it too expensive for any one group to take a suit as far as it needs to go to set that precedent.

However, the non-compete that I have with my partners is now illegal, no precedent needed. Assuming this ruling by the FTC stands (The Chamber of Commerce is expected to file suit against it today, and an injunction against the rule, given the Supreme Court's stance against legislation via these executive/ administrative agencies, wouldn't surprise me), the hospital can now engage in negotiations with my group's partners individually.
They can prevent us from even talking to the local ASC's, but can steal our members out from under us, if they wish.

I really wish the FTC had made it clear that "non-profit" hospitals are subject to the ruling, though I understand why they didn't. To be clear, I believe the FTC overstepped their authority here, and will eventually be slapped by the Supreme Court.

It may be too expensive for one group, but not for the NRLB.
To your second point, you can get around this by making everyone a partner.

 

[GassYous]

Apparently the rule doesn't cover people making 150k+ a year and have some kind of decision making role (partnership)

 

[amyl]

But most non profit hospitals do NOT employ their doctors directly. They have a middleman company…. I didn’t work for Good Samaritan hospital…. I worked for Good Samaritan physician group. The group was hired by the hospital. This ftc ruling will hold true for Good Samaritan physician group.

I agree that the Supreme Court - if it gets there - will likely rule that the ftc over stepped its authority - may be leave it up to the states.

Even though I’m a partner in an “evil AMC”that will likely be hurt by the ftc ruling I don’t think non competes are fair. We are all fine… but these non competes affect hairdressers, waiters, etc much lower income people who cannot afford to move and who a little more money would make a huge difference in their lives -

The ftc ruling is a win for the “little guy”… the chamber of commerce suit is just trying to protect its unfair crony capitalism practices.

The stakes couldn’t be any higher in November.

 

[amyl]

Apparently the rule doesn't cover people making 150k+ a year and have some kind of decision making role (partnership)

There’s been some discussion in my group about that. I think the wording was more along the lines of policy making not just partnership.
And it is ridiculous to put a number figure to whether or not you have proprietary information.

 

[calvnandhobbs68]

I really wish the FTC had made it clear that "non-profit" hospitals are subject to the ruling, though I understand why they didn't. To be clear, I believe the FTC overstepped their authority here, and will eventually be slapped by the Supreme Court.

They can't though, the FTC literally does not have jurisdiction over "true non-profit" entities by nature of it being...the Federal Trade Commission.

Which is exactly what they stated...they do have the ability to evaluate whether they consider entities that claim to be nonprofits to ACTUALLY be nonprofits or not for trade purposes as noted above.

 

[caligas]

Thats the lie your group feeds you. your non-compete protects your group as a whole, but not you individually. For example, if you decide to work directly with the hospital, you might get a higher direct salary since you dont have to pay for the overhead of the group or the benefits (older anesthesiologists are more expensive to insure for malpractice and health insurance which comes out of your pocket). The group would suffer because now they lost the anesthesiologist and someone to hedge the cost.

I think I understand your point but my question is from the perspective of the group, doesn’t the non compete protect the group.?

And now, sure any of us can get hired out by hospital or AMC, so the private group will die and with it our autonomy to run our practice.

 

[Status Sciaticus]

I think I understand your point but my question is from the perspective of the group, doesn’t the non compete protect the group.?

And now, sure any of us can get hired out by hospital or AMC, so the private group will die and with it our autonomy to run our practice.

yes that is correct. Just like the non compete protects the hospital against the employees, so too does it protect the group against its associates leaving.

There's an easy fix for your group.... make everyone an equal profit share partner. Doesn't have to be a voting partner, but a financially equal one.

 

[GravelRider]

I think I understand your point but my question is from the perspective of the group, doesn’t the non compete protect the group.?

And now, sure any of us can get hired out by hospital or AMC, so the private group will die and with it our autonomy to run our practice.

To me this seems like it would be more of a problem with private groups that are lopsided in their structure. The fair and democratic groups would have alot less to worry about. The pyramid scheme private practices can’t die off soon enough, as far as I’m concerned.

I believe there is language in the ruling that excludes “executives.” Partners in a private practice could very well be interpreted to be “executives.”

 

[Dr. Rude]

Maybe. Even if things are structurally equal within the partnership, Drs. X,Y,Z, who have a better relationship with surgeons and administration than Drs. A,B,C might be able to cut a deal that leaves A, B and C out in the cold.

 

[dozitgetchahi]

They can't though, the FTC literally does not have jurisdiction over "true non-profit" entities by nature of it being...the Federal Trade Commission.

Which is exactly what they stated...they do have the ability to evaluate whether they consider entities that claim to be nonprofits to ACTUALLY be nonprofits or not for trade purposes as noted above.

My suspicion is that most institutions calling themselves “nonprofits” are full of BS.

CCF made something like $2 billion in revenue last year. The idea that they should be treated the same legally (and in terms of tax status) as a small church with 50 attendees tops is ridiculous. This might actually start a long overdue conversation about how the “501c3” thing has become stretched way beyond any reasonable point.

 

[GravelRider]

Maybe. Even if things are structurally equal within the partnership, Drs. X,Y,Z, who have a better relationship with surgeons and administration than Drs. A,B,C might be able to cut a deal that leaves A, B and C out in the cold.

What kind of a deal? Secret back room deals to provide anesthesia?

 

[Howard888]

You all realize with appeals this probably won’t happen and 5-10 years minimum before enacted if it does happen

 

[calvnandhobbs68]

You all realize with appeals this probably won’t happen and 5-10 years minimum before enacted if it does happen

No unless it gets struck down or stayed pending a decision, it takes effect 120 days after it’s published in the federal register. Maybe actually read it.

 

[Howard888]

No unless it gets struck down or stayed pending a decision, it takes effect 120 days after it’s published in the federal register. Maybe actually read it.

Mass appeals just today . Do you realize how the legal process with this works? Go read some law textbooks….to your point. No chance this happens anytime soon. Not saying never although I doubt that. But this is a years away thing…

 

[Howard888]

Mass challenges I guess I should have said. Either way…point remains this will be tied up in courts for years

 

[Status Sciaticus]

Mass appeals just today . Do you realize how the legal process with this works? Go read some law textbooks….to your point. No chance this happens anytime soon. Not saying never although I doubt that. But this is a years away thing…

If no court takes it up in 120 days or it keeps getting batted down, it will go into effect until it is overturned.
However, it is always possible that an injunction can be filed to prevent it from taking effect until the case is heard. This requires it to be taken up by a state district court

 

[calvnandhobbs68]

Mass appeals just today . Do you realize how the legal process with this works? Go read some law textbooks….to your point. No chance this happens anytime soon. Not saying never although I doubt that. But this is a years away thing…

They aren't appeals. They're lawsuits. You can't appeal anything until there's been a court decision.

 

[aneftp]

It’s tricky. I know it’s a broad decision across many industries (not just the health care) But anesthesia rads em path etc really don’t control who they can see.

But primary care or speciality care with clinics do control who they can see. They can jump from one hospital based practice to another and take patients with them. It’s tricky.

What about a dentist bringing in a younger dentist who will eventually buyout their practice. But it’s suppose to be a 3 year commitment.

But after 2 years. That younger dentist leaves the practice (has access to the older dentist clients) and builds clinic down the street. That younger dentist is stealing patients from the established dentist. That’s just wrong.

 

[DarkBluMage]

It’s tricky. I know it’s a broad decision across many industries (not just the health care) But anesthesia rads em path etc really don’t control who they can see.

But primary care or speciality care with clinics do control who they can see. They can jump from one hospital based practice to another and take patients with them. It’s tricky.

What about a dentist bringing in a younger dentist who will eventually buyout their practice. But it’s suppose to be a 3 year commitment.

But after 2 years. That younger dentist leaves the practice (has access to the older dentist clients) and builds clinic down the street. That younger dentist is stealing patients from the established dentist. That’s just wrong.

What’s wrong is trying to control where and when someone else can practice medicine with or without you. Your business is your concern. If you want to keep your patients you should look to increase your patient relations so that they are more attached to your practice than an individual doctor and not focus on trying to limit someone else’s career. No former employer or job should have a say in someone’s life or their jobs going forward because they’re concerned about competition. That’s insane and controlling.

 

[Howard888]

notice I corrected to say challenges vs appeals. The challenges are lawsuits obviously and courts will 100% hear them and place injunctions. Even if a lawsuit is heard in favor of ftc an appeal then will be made in case another injunction or delay will take place. So on and son until it reaches Supreme Court possibly.

Again years for this to happen if happen at all