Nme Hospital, Inc

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IN THE MATTER OF NME HOSPITALS, INC.

CONSENT ORDER , ETC. , IN REGARD TO ALLEGED VIOLATION OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT Docket C- 3317. Complaint, Dec. 1990-Decision, Dec. 1990 This consent order requires, among other things, a corporation based in Santa Monica Ca. , that owns a medical center in Boca Raton, Fla., that operates an infertility clinic, to possess a reasonable basis for any future success rate claims for its vitro fertilzation procedures, and for claims of success in terms of either live births or pregnancies achieved through any of its infertility treatments. Appearances For the Commission: Michael A. Katz and Michael C. McCarey. For the respondent: Milton McKay, Tampa, FL. COMPLAINT The Federal Trade Commission, having reason to believe that NME Hospitals, Inc. , d/b/a West Boca Medical Center, a corporation respondent"), has violated certain provisions of the Federal Trade Commission Act ("FTC Act"), 15 V. C. 41 et seq. and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, alleges:

PARAGRAPH 1. NME Hospitals, Inc., is a Delaware corporation with its principal office and place of business located at 2700 Colorado Avenue, Santa Monica, California. Respondent owns and operates West Boca Medical Center, a hospital, which is located at 21644 State Road 7, Boca Raton, Florida.

PAR. 2. Through West Boca Medical Center ("the Center respondent is now, and for some time last past has been, engaged in offering for sale and the sale of services in connection with the treatment of infertility in the human reproductive system. The Center dispenses its infertilty services to the public under the trade name The Fertility Institute of Boca Raton FIBER"). The address of FIBER is the same as the Center.

PAR. 3. Since at least 1987 , the Center, acting under the authority Complajnt 113 F.

and control of respondent, has placed, or caused to be placed advertisements in various periodicals that are in general circulation to the public and has mailed letters to potential patients that contain information about FIBER and its services. PAR. 4. The acts and practices of respondent alleged in this complaint have been and are in or affecting commerce. PAR. 5. The Center s advertisements and mailings have contained representations through January, 1989, as to the past success rates of achieving pregnancies for patients who purchase FIBER' s services in treating infertility, including use of In Vitro Fertilization ("IVF") and Gamete Intrafallopian Transfer ("GIFT"). Typical of these advertisements, but not necessarily all-inclusive thereof, are the attached Exhibits A and B. The aforesaid advertisements, which appeared in publications dated September, 1988 (Exhibit A) and January, 1989 (Exhibit B) contain the following statements: 1. "The Fertility Institute of Boca Raton producing some very satisfactory results.

In fact, four of our first twelve patients participating in our In Vjtro Fertilization program have achieved pregnancy, and our first ' test tube' baby is due in October, (Exhibits A and BJ 2. "Our success rate is an impressive 30% , well above the national average. (Exhibit A J PAR. 6. Through the use of the statements referred to in paragraph five, respondent has represented, directly or by implication, that, as of the date that the advertising containing said statements appeared: 1. FIBER had achieved pregnancies for at least four of its patients who had undergone IVF procedures at its clinic. 2. FIBER' s success rate in achieving pregnancies for its patients through IVF procedures has been higher than the national average. PAR. 7. Through the use of the statements and representations referred to in paragraphs five and six, respondent has represented directly or by implication, that at the time respondent made those representations, respondent possessed and relied upon a reasonable basis for such representations.

PAR. 8. At the time respondent made those representations respondent did not possess and rely upon a reasonable basis for such representations. Therefore, the representation set forth in paragraph seven was and is false and misleading.

PAR. 9. The acts and practices of respondent alleged in this NME HOSPITALS , INC. 1117 1115 Complaint complaint constitute unfair and deceptive acts or practices in or affecting commerce in violation of Section 5(a) of the FTC Act, 15 C. 45(a).

Commissioner Starek not participating.

. _... ......, Complaint 113 F.

EXHIBIT A The Institu of FertBoc Raton js PJPducig some very- satiIyg reults.

In iI bJrlou II 12 n.Ilt.Dnd coro,l!k In ou aln Nt rutllhir QI,. lh"II: l'rJI.MI- .a01 II Wr FcIIIIIJIK hcl ""L ""ilol_1I Noll JI)i!m. ..ou- -11-.0l an on fkboour urr. list" h.'!I!I pc. MIII'-)alr hn "dci.LhlCm 0C. OurbDbybdu"'bII ra -d-' JO. M: atUK M:ClIuDnO m'lnliRrr1nf.lr)U.,n: In Im.. _d_... "'_r 1)1l_0I ""_""rq- ""klC"" ""L _R. ..1n T1_- _,,1D,"1"1I i:l1 pnan I). ,"cmr .af: hc_n. IiLy 1fti.\l Th""M' (I"YI," _I b'"" "II bm a \b1i 11. M: IMlrol Clinic. )0 21 Slw: Ib.r 1.1I1i. care iI 01 lNiI ; ICI Mlxlic,1 GeIC. pr Dr on ....",. Q:lar Boc Raton The Fert Insttu of At \Wt Boc Medical Center . .. . . . ,.... .. .._ ,.. ....... _...._...... .. _.. ....... NME HOSPITALS, INC. 1119 1115 Complaint EXHIBIT B The fert In Raton' someBo Vr:ud satlIy . \e re. .. ..... II12 l111l1""''' __....11.. tl. -1I--'" _CI. Ao_- on .. "'.--II .11- _"'11_11'" ..--. 'WI,...-_li ... i_"" UI...... ""_11"' 811_.",-.CD __I1_"'''d D.II _R- 'IM'(1n1l ..t; 11""__"" GI--8d- aM'" !D 7. "" _. PI '1 , -C8,...- --_11.""- J:- Raton of Bo Th Intu . Feat Bo Medca Ceter Decision and Order 113 F. DECISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondent named in the caption hereof, and the respondent having been furnished thereafter with a copy of a draft of complaint which the Bureau of Consumer Protection proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondent with violation of the Federal Trade Commission Act; and The respondent, its attorneys, and counsel for the Commission having thereafter executed an agreement containing a consent order an admission by the respondent of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settement purposes only and does not constitute an admission by respondent that the law has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission s Rules; and The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondent has violated the said Act, and that complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such an agreement on the public record for a period of sixty (60) days now in further conformity with the procedure prescribed in Section 2. 34 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following order:

1. Respondent NME Hospitals, Inc. , is a corporation organized existing and doing business under and by virtue of the laws of the State of Delaware, with its office and principal place of business located at 2700 Colorado Avenue, Santa Monica, California. 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent, and the proceeding is in the public interest.

ORDER It is ordered That respondent, NME Hospitals, Inc. , a corporation its successors and assigns, and respondent' s officers, agents, repre- NME HOSPITALS , INC. 1121 1115 Decision and Order sentatives, and employees, directly or through any corporation subsidiary, division, or other device, in connection with the advertising, promotion, sale or offering for sale of services relating to the treatment of infertility through in vitro fertilzation, do forthwith cease and desist from representing, directly or by implication: A. That its success rate in achieving pregnancies for its patients is higher than or compares favorably with the success rates of other providers of these services, unless at the time of making such representations, it possesses and relies upon a reasonable basis for making such comparison which shall, at a minimum, consist of results for its own patients that are based upon either the same or essentially equivalent test procedures for determining pregnancy that were used to produce the results with which the comparison is made. B. That any of its patients have achieved pregnancies through respondent' s treatment unless at the time of making such representation, respondent possesses and relies upon a reasonable basis for making such representation. Such reasonable basis shall consist of competent and reliable scientific evidence substantiating the representation. For any test to be "competent and reliable" it must be conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the relevant profession to yield accurate and reliable results and shall not consist solely of measuring or evaluating human chorianic gonadotrophin (hcg) risings.

II.

It is further ordered That respondent, NME Hospitals, Inc. , a corporation, its successors and assigns, and respondent' s officers agents, representatives, and employees, directly or through any corporation, subsidiary, division, or other device, in connection with the advertising, promotion, sale or offering for sale of services relating to the treatment of infertilty, do forthwith cease and desist from misrepresenting, directly or by implication, the number or percentage of respondent' s patients that give birth or achieve pregnancy, or have given birth or achieved pregnancies, or otherwise misrepresent respondent' s past or present success rate in achieving births or pregnancies.

Decision and Order 113 F. It is further ordered That respondent shall maintain for a period of three (3) years after the date the representation was last made, and make available to the Federal Trade Commission upon request business records supporting any claims of success in connection with its infertility treatment programs.

IV.

It is further ordered That, for a period of five years after the date of entry of this order, respondent shall notify the Commission at least thirty (30) days prior to any proposed change in respondent such as of adissolution, assignment or sale resulting in the emergence successor corporation, the creation or dissolution of subsidiaries or any other change in respondent which may affect compliance obligations arising out of this order.

It is further ordered That respondent shall, within (60) days after service of this order, file with the Commission a report, in writing, setting forth in detail the manner and form in which it has complied with all requirements of this order.

Commissioner Starek did not participate.

FERTILITY INSTITUTE OF WESTERN MASSACHUSETTS, ET AL. 1123 1123 Complaint