Congressional fight brews on FTC oversight of doctors

Doctors, dentists, and other professionals may soon elude the long arm of the Federal Trade Commission.

This week Congress is likely to decide whether to exempt state-regulated professionals from FTC investigation of unfair business practices. The American Medical Association, the most visible supporter of the move, claims the FTC is a crass bully whose oversight in this area duplicates the work of other regulators. AMA officials say it's ''a bunch of baloney'' that FTC anti-price-fixing actions hold down health-care costs.

But critics - who range across the whole political spectrum - say it's simply a case of one rich interest group strong-arming Congress to obtain special treatment.

''Everybody from James Miller (the Reagan-appointed FTC chairman) to Ralph Nader agrees it would be a bad move,'' says Jay Angoff, a lawyer for the public-interest group Congress Watch. ''That shows you how outrageous this is.''

The FTC has never been known for its dainty manners. Long considered an aggressive bulldog of an agency, the commission has on occasion riled Congress and business alike in its pursuit of price-fixing, deceptive ads, and other unfair business practices.

In 1975 the FTC first shook up the well-ordered world of professionals by filing suit against the AMA, charging (among other things) that medical association rules against physician advertising were anticompetitive.

In March the United States Supreme Court by a tie vote upheld the FTC case allowing doctors to advertise. But the American Medical Association says the whole thing was unnecessary, as it was already relaxing its ban on physican ads pursuant to a 1975 Supreme Court ruling.

The FTC now has pushed other professional groups - lawyers, optometrists, dentists - into advertising their services.

''Since the FTC's involvement, the price of a pair of contact lenses has dropped from $300-$350 to $60-$70,'' says Franklin Rozak, a spokesman for the National Association of Optometrists and Opticians. ''The fact of the matter is that competition is responsible for that.''

The AMA says such figures show only one side of the story. It argues that costly, unnecessary actions begun by the FTC can also drive up health-care costs. The California Medical Association, for example, spent $1 million defending itself against an FTC charge that a study of health-care costs in various locales amounted to price fixing, says William Rial, president of the AMA.

So the AMA has lobbied hard for an exemption from FTC oversight for professionals. Though the AMA has taken the lead in lobbying, associations representing dentists, some optometrists, and veterinarians also support the move. The American Bar Association has not taken an official position. Nurses and health-care professionals who are not doctors oppose FTC oversight exemption for professionals.

The AMA and its supporters say the Justice Department and state regulators will provide enough protection against antitrust abuses by professional groups.

''The major suits in the area of antitrust action against professionals were brought either by private individuals or by the US Department of Justice and had nothing to do with the FTC,'' claims an AMA memo.

But James Miller, FTC chairman, points out that suits against medical professionals, in particular, have been brought mainly by the FTC.

''If we weren't involved with these cases, why would they be so upset with us?'' asked Mr. Miller in a telephone interview. ''We have the expertise in this area. Justice doesn't.''

He and other critics of the professional-group exemption also point out that the AMA House of Delegates has passed a resolution seeking exemption from all antitrust law for ''certain reasonable activities in the health-care field'' which would hold down costs or improve quality of care. Such changes in the law, says Mr. Miller, could become a loophole exempting the AMA from all antitrust prosecution - not just the efforts of the FTC.

''It seems to me they really do have that goal on their long-term agenda,'' he said.

The AMA also argues that FTC ''meddling'' has affected the quality of US health care by preventing disciplinary action against incompetent doctors, among other things.

''They would be hard put to give specific examples where what the FTC has done has undermined the quality of care,'' retorted Miller.

The provision exempting professionals from FTC oversight is included in a Senate bill reauthorizing the commission. The legislation must be passed by the end of the month, or the FTC - its government mandate expired - must cease operations. Such a shutdown occurred briefly in 1980, caused by congressional disputes over FTC authority.

The House version of reauthorization does not yet contain exemption for professionals. But when the bill comes to the House floor - probably on Sept. 22 - a battle is likely to develop between congressional forces proposing professional exemption, and those that favor a compromise proposed by Rep. James Broyhill (R) of North Carolina, which would allow FTC oversight on professionals' commercial practices, but not over quality of service.

''It's a compromise between no jurisdiction and some jurisdiction,'' says an aide to Representative Broyhill.

Mr. Miller supports the Broyhill amendment. The AMA does not and has lined up 219 representatives behind its drive for total exemption.

Since the 1980 elections 213 of those 219 representatives have received campaign contributions from the AMA and its cohort, the American Dental Association, a total of $1,663,992, points out a study by the Ralph Nader group Public Citizen.