The House of Representatives bowed to the American Medical Association yesterday and voted, 245 to 155, to exempt physicians and other state-licensed professionals from regulation by the Federal Trade Commission.
In two more blows to the controversial regulatory agency in its running battle with Congress, the House also:
Voted, 241 to 158, to reduce FTC funding over the next three years to levels requested by the Reagan administration--a cumulative cut of about $40 million, or nearly 20 percent, from levels recommended by the House Appropriations Committee.
Voted by voice, over objections from its Rules Committee, to continue congressional veto power over rules issued by the FTC. The veto was most recently exercised to overturn regulations requiring used-car dealers to disclose known defects to prospective auto purchasers.
The new restrictions on the FTC's powers and purse were approved in connection with a three-year agency reauthorization that may have trouble winning final approval in this Congress. After the restrictions were passed, the House approved the bill by voice vote.
The Senate Commerce Committee has approved an FTC reauthorization, including the exemption for doctors and other professionals, but it has yet to be scheduled for Senate action, although the issue could come up in connection with an appropriations measure.
The doctors' exemption, for which the AMA lobbied with thousands of dollars in campaign contributions to supporters of its position, was approved after a 208-to-195 rejection of a substantially less-restrictive compromise.
President Reagan's appointees to the FTC had supported the compromise, and FTC Chairman William C. Miller III said after the vote that the exemption amounted to "bad economics and bad law." Miller, describing himself as "extremely disappointed," said he believed the provisions "would place professionals above the laws which apply to all other Americans."
In the exemption debate, advocates said it would preserve states' rights and keep the FTC from overreaching powers originally given it by Congress. Opponents said it could leave consumers unprotected against price-fixing, boycotts and deceptive advertising practices.
Rep. James T. Broyhill (R-N.C.), who joined Democratic leaders on the Energy and Commerce Committee in fighting the exemption, cited examples of a doctors' boycott of a hospital emergency room in a dispute about hiring a physician and a medical association's attempt to block a physician's advertising of a discount for senior citizens.
Others, including Rep. Henry A. Waxman (D-Calif.), chairman of the health subcommittee, argued that the exemption would "remove the little bit of protection we have now" against anticompetitive practices that lead to higher costs, especially in the health field.
Proponents contended that the FTC is "usurping the power of state-licensing boards" in claiming powers to regulate professionals, who they said are adequately regulated by states.
"I don't want the FTC to practice its brand of quackery in regulating medicine," said Rep. Thomas A. Luken (D-Ohio), who led the fight for the exemption. There is "simply no magic line of demarcation," he added, between regulating doctors' business practices and regulating health-care delivery services, which he said should not be the FTC's business.
The House Rules Committee had recommended that the legislative veto provision be dropped as an "unconstitutional incursion into executive functions," as Rules Committee member John Joseph Moakley (D-Mass.) put it.
But Rep. James H. Quillen (R-Tenn.) said it was a proper way to hold regulatory agencies accountable and prevent "harassment and intrusion" into private business.
Among area legislators, only Michael D. Barnes (D-Md.) voted against the exemption for professionals.