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Happy Foundation for Medical Care is a nonprofit Arizona corporation composed of licensed doctors of medicine, osteopathy and podiatry engaged in private practice. Approximately 1,750 doctors, representing about 70% of the practitioners in Happy County, are members.
The Happy Foundation was organized for the purpose of promoting fee-for-service medicine and to provide the community with a competitive alternative to existing health insurance plans. The foundation performs three primary activities. It establishes the schedule of maximum fees that participating doctors agree to accept as payment in full for services performed for patients insured under plans approved by the foundation. It reviews the medical necessity and appropriateness of treatment provided by its members to such insured persons. It is authorized to draw checks on insurance company accounts to pay doctors for services performed for covered patients.
The fee schedules limit the amount that the member doctors may recover for services performed for patients insured under plans approved by the foundation. To obtain the approval, the insurers agree to pay the doctors' charges up to the scheduled amounts, in exchange the doctors agree to accept those amounts as payment in full for their services. The doctors are free to charge higher fees to uninsured patients, and they may charge any patient less than the scheduled maximum.
An antitrust action has been brought against Happy Foundation. What are the chances of success??? Please provide your analysis and rationale.
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