Health plans: All or nothing could be here to stay

Key Points

In 2005, a year after UnitedHealthcare acquired Oxford Health Plans, it issued an ultimatum to New York-area physicians: take both plans or you can't participate in either. Internist Daniel L. Brook of New York City, who says he'd had problems with Oxford and didn't want to add another managed care plan, refused to sign with United. As a result, when his Oxford contract expired in October 2005, it wasn't renewed.

A large portion of Brook's patients belonged to Oxford at the time. Because the plan paid poorly, it represented a smaller percentage of his revenues; yet his practice took a significant financial hit, he says, when he lost Oxford. Also, the number of new patients coming to his practice declined.

Subsequently, Brook, several other physicians, and the Medical Society of the State of New York filed a class-action suit against United. They alleged that imposing the "all-products" clause on doctors was an unfair and deceptive trade practice and that the insurer was using its market share to force physicians to accept both plans.

United has also been pushing its all-products agenda in other parts of the country. In Texas, for example, it tried to force the members of the Genesis Physicians Group, a 1,740-doctor IPA, to accept an all-products clause, according to Genesis CEO Ron Lutz. But the insurer stopped those efforts, Lutz says, after the IPA reminded United that a former Texas attorney general had declared such contract provisions illegal in the state.

In California, physicians who want to participate in the PPO plans of United or PacifiCare, which United acquired in 2005, must sign a joint contract with both companies, according to the California Medical Association (CMA). Those physicians who are already in the PacifiCare network can remain in it without signing the joint contract; but they're considered part of the United network, and United members may see those doctors, the CMA says. United declined to comment on any of the points raised in this article.

Despite laws banning all-products clauses in several states and national class-action settlements that prohibit some insurance companies from imposing all-products provisions, many health plans other than United continue to demand that physicians sign contracts containing them, according to healthcare consultants, physicians, and administrators. Among those plans, sources say, are Coventry, Geisinger, Independence Blue Cross, and Kaiser Permanente. None of these plans responded to requests for comments.

You've probably seen contracts that include all-products clauses, and you may have believed you had to sign them because of a plan's market power. That's true in many cases, but not all. Read on to find out how the legal environment is changing and how you can get plans to drop these provisions.

Plans are trying to please employers

Since most physicians and medical societies oppose all-products clauses, why do so many health plans still have them? While it's difficult to get insurance companies to speak about this issue, the biggest reason appears to be that employers-the plans' main customers-demand the broadest possible networks in all products that the insurers sell them. (Some plans have also tried "tiered" networks that include only the lowest-cost, highest-"quality" doctors, but they haven't caught on to any great extent.)

Consider Wellmark Blue Cross and Blue Shield, which claims about half of the insured patients in Iowa. Technically, Wellmark doesn't have an all-products clause in its contracts. It has a "universal contract" that covers its HMO, PPO, indemnity plan, and third-party administrator network. Doctors don't have to take all of these products, but most have chosen to because Wellmark pays them a bit more if they sign the universal contract.