Practice Beat

By Joan R. Rose, Senior Editor

HMO Contracts: The all-products clause draws fire wherever it appears

At the request of the Connecticut State Medical Society, state AttorneyGeneral Richard Blumenthal is investigating Aetna US Healthcare's new PrimaryCare Physician Agreement.

At the heart of the issue is the carrier's insistence that doctors whoparticipate in any Aetna plan participate in them all. Doctors contend thatthe all-products clause violates the state's Unfair Insurance PracticesAct. Aetna began including the provision in physician contracts three yearsago, but only recently introduced the concept to Connecticut.

The medical society has asked Blumenthal to investigate other contractprovisions as well, including financial incentives that discourage hospitalizationand the use of specialists and restrictions on referrals outside the insurer'snetwork.

Blumenthal appears to be in the doctors' corner. The provisions in question"raise the specter of assembly-line medical care," he said. "Ourhope is that . . . Aetna will rethink [its] decision."

To increase public awareness of the issues, the CSMS recently ran full-pageads in the state's newspapers. The $50,000 campaign accused Aetna of hamperingdoctors' ability to do what they think is best. "Patients have becomecommodities to be auctioned off to the lowest bidder," says CSMS ExecutiveDirector Timothy B. Norbeck. "We have to stand up for the doctors andlet patients know how physicians have been totally controlled."

Medicare: Uncle Sam will rethink private contracting

HCFA will revisit the issue of private contracting between physiciansand Medicare beneficiaries, according to the HHS Office of Inspector General'sWork Plan for the Year 2000.

Sanctioned under the Balanced Budget Act of 1997, private agreementsstipulate that beneficiaries will pay out of pocket for Medicare-coveredservices. (In most cases, of course, they pay more than what Medicare allows.)Physicians who enter into such contracts must agree not to bill Medicare—forany service to any patient—for two years.

The government acknowledges that relatively few doctors have chosen tocontract privately. But since those who do make themselves unavailable tothe rest of the Medicare population, HHS wants to evaluate the contracts'impact on access to care and other beneficiary protections.

Malpractice: Should word be spread before the suit is filed?

Under Florida law, patients who are contemplating a malpractice suitagainst a physician must notify the Department of Health of their intention.

In the past, such notices were made public only after a state investigationfound probable cause or after a malpractice suit actually had been filed.Now the Department of Health wants to make that information available tothe public when received. And the Florida Medical and Osteopathic associationshave gone to court to prevent the state from doing so.

Although the doctor organizations were unsuccessful in obtaining a temporaryinjunction against DOH, they are proceeding with a suit for a permanentinjunction.

While "patients are entitled to accurate, reliable information,"says FMA President Glenn Bryan, the premature release of unfounded accusations"would unfairly identify physicians who may be threatened with frivolousand unfounded lawsuits."

The doctors argue that releasing the information would violate statelaw. But the state attorney general says the notices aren't specificallyprotected and thus are a matter of public record.

Reimbursement: More movement toward bargaining solidarity for doctors

A federal appellate court has cleared the way for the California MedicalAssociation to represent its members as a class in arbitration proceedingswith Blue Cross of California.

When a lower court originally granted the doctors class-action status,the insurer responded by invoking its protection under ERISA. Now, withits recent ruling, the federal court has determined that physicians' contractcomplaints differ from claims for benefits and are not subject to the ERISAshield. ERISA does still apply to, and generally pre-empts, benefits claims.

The doctors are challenging fee cuts imposed retroactively for 1993,'94, and '95 by the Blues' Prudent Buyer Plan. The CMA contends that thefee reductions were invalid because Blue Cross didn't follow the review-and-notificationsteps specified in the agreements. Under the terms of their contracts, physicianswere required to bring their disputed claims to arbitration. Blue Crosswanted to force them to do so individually.

If the doctors prevail in arbitration, Blue Cross could be liable formillions of dollars in underpayments

Managed Care: States move to tighten their grip on HMOs

Massachusetts. Can governmenthealth officials offer more protection to consumers than insurance regulatorsdo? Massachusetts' Secretary of the Commonwealth William F. Galvin thinksso. At his behest, two influential state senators have introduced legislationto shift HMO oversight from the insurance department to the Commissionerof Public Health.

To help the health commissioner do his new job, the measure would requireevery HMO to submit lots of specific information on what it does, and how.Each HMO would have to deliver a service plan, outlining every benefit,service, hospital, clinic, covered procedure, and emergency care policyit uses, as well as the number of participating physicians, nursing servicesparticipants, and all "pharmaceutical coverage providers," a categorythat includes everything from benefits managers to drug- stores. The HMOsalso would have to include "all exceptions and exclusions, or deductiblesof any kind, for every category . . . of person covered."

What's more, before amending any of its plans, an HMO would need thecommissioner's approval. It would have to submit the proposed changes, notethe number of patients affected, and explain its reason for changing things.The commissioner would decide-but only after a public hearing on the issue.

California. Included in the package of managed care reform bills signedinto law by California Gov. Gray Davis in September (see Practice Beat,Nov. 8, 1999) is one creating a new overseer of health service plans. Themeasure would transfer responsibility for the licensing and regulation ofmanaged care plans from the Department of Corporations to the newly establishedDepartment of Managed Care. And one of its primary directives will be toensure that treatment decisions are being made by physicians.

The new law also provides for an advisory committee of physicians toassist the department in ensuring that quality standards are met. For example,the doctors will review the decisions made by external review panels andmake recommendations for improvement. The panel will also be charged withrecommending ways to reduce clinical errors, improve patient safety, andincrease the practice of evidence-based medicine.

Another provision in the law establishes the Financial Solvency StandardsBoard within the Department of Managed Care. The board will develop andimplement solvency requirements for providers who sign risk contracts withhealth plans. The standards are an attempt to stem the surging number ofmedical-group bankruptcies. According to the California Medical Association,90 percent of groups in the state are on the brink of insolvency.

Elections 2000: Will patient protection be a pivotal issue?

If the House and Senate can't agree on a patient protection bill thatthe president will sign, the right to sue HMOs for adverse treatment decisionscould play a key role in the upcoming elections, a new Harris Poll suggests.

Eighty-eight percent of the 1,009 adults questioned in a nationwide surveybelieve that making it easier to sue HMOs would increase the cost of healthinsurance, and nearly 60 percent believe it would limit access to care.Nevertheless, the majority of respondents still lean toward giving patientsthat right. Candidates will oppose it only at high risk.

A clear plurality of Harris' respondents trust the Democrats more thanthe Republicans "to support good policies on patients' rights."

How patients feel about the right to sue HMOs*

How the right to sue would affect cost and access*

*Columns may not add up to 100 percent because of rounding.

Joan Rose. Practice Beat.

Medical Economics

1999;22:31.