YOUR MEDICAL OR DENTAL PRACTICE MAY BE “TERMINAL”

Aetna recently dropped 552 physicians from its networks; apparently because they cost too much. It cited the “demand” for “smaller networks that are less expensive.”[1] Insurance company euphemisms aside, since most insurance companies pay physicians from a fee schedule, that can only mean that these physicians must have ordered “expensive” tests, procedures, or therapy. Although each jurisdiction differs on termination rights, most follow a modified “at will” employee concept. In a nutshell, the physician can be terminated at any time without cause but with some notice, and the physician can drop out of a plan, again with some predefined notice, for any reason. The Texas Medical Association, where 130 of the terminated physicians work, pointed out that Aetna only examined Evaluation and Management codes (E&M) 3 and 4, which are most often used by Primary Care Physicians’ for office visits; thus leaving these physicians especially vulnerable.[2]

Are these actions legal? Yes and no. When a physician joins a provider network, he or she agrees to abide by everything in their provider agreement, most of which individual physicians never even bother reading. If you read carefully, you’ll find that the physician has few rights, but many are reserved for the insurance company. Moreover, the fact that you may not have read all the fine print, or had it reviewed by an attorney, does not void it – you signed it! On the other hand, there are situations in which such provisions in provider “contracts” are, in fact, voidable.

A contract is “a promise for consideration.” In other words, “if you do this for me, I’ll pay you this much (yes, it is more complicated, but we’re not getting into that now).” However, the gravamen by which such contractual obligations will be judged by a court is whether or not they were freely bargained for. If one party, literally, had no choice, the contract, or that provision may be voidable. This is important because in many instances, one or two health insurance companies control more than 80% of a market. You don’t have to sign their contracts but, if you don’t, you will simply have no patients and be out of business. This may, however, be a Contract of Adhesion, and may be voidable if such monopolistic coercion is shown to exist. Can you fight back? Can you prevent such an event happening to you? Do you have any rights if terminated? The answer is, “it depends.” For that answer, you need to have your practice and contracts reviewed by a knowledgeable Health Law attorney (not your family lawyer); which will cost less and be less stressful now, than when you are actually dropped.

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[1] Lewis, Morgan Jr., Aetna drops 552 higher-cost physicians, April 11, 2012.

[2] Ibid.