A managed care tug-of-war has been ongoing for well over two decades between physicians and insurance companies. Managed care networks require physicians to agree by contract to a limited reimbursement schedule, in exchange for placement on the insurer’s approved list of providers. Now, physicians are being advised that they have been terminated from the provider network, which termination often falls into one of three categories: termination without cause; termination for cause; and refusal to renew.
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Termination without cause, simply put, “isn’t.” There is always a reason, and the reason is usually money. Termination without cause is akin to being “banned from the casino” for winning. Carriers take the position that they are not required to contract with physicians, and are free to terminate provider status without stating a reason.
The most costly physicians appear to be those who rely on mid-level employees to perform ancillary laboratory and testing services in house. The total payments to the physician may well appear to be more expensive, when in fact, the cost per patient may be no different or less than an outside referral.
Non-renewal often follows the same pattern. Physicians are singled out because they are the highest earners.
Termination for cause, in which the carrier gives a reason, may involve some alleged misstatement in the credentialing process, or some error in billing and coding. Carriers originally referred many such misstatements to licensing boards, but have discovered it is much easier to simply terminate the provider agreement. Carriers may be required to offer a type of appeal, though the likelihood of success may not be great.
Physicians have been fighting back, according to a recent article by the Texas Medical Association, “A Bitter Pill, Physicians Seek Justice for Network Termination.” The article tracks the history and outcome following UnitedHealthcare’s decision to terminate thousands of physicians from Medicare Advantage plans. In December, a federal appeals court granted the medical associations a preliminary injunction, preventing the payer from kicking physicians out of its Medicare Advantage plans until doctors could arbitrate their cases.
The basis of the lawsuits against carriers often depends upon the type of insurance involved. Medicare and workers’ compensation statutes may dictate procedures which must be followed before termination can occur. Private plans may have fewer statutory restrictions, depending upon the laws of a particular state.
The Texas Medical Association offers a white paper entitled “Physician Steps in Termination of Network Participation,” designed to help physicians appeal insurance network termination and available upon request.
If you have been terminated, or notified you will be terminated, contact a healthcare attorney who is licensed your state.