The right to reject what plans demand: The Montana radiology case

Physicians' ability to stand together helped stop a health plan's lawsuit to force doctors to sign a bad contract.

Posted May 2, 2005.

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With the market power that health plans hold over physicians, contract negotiations often come down to: Take it or leave it. Until recently, there was a threat that "leave it" would be struck from the list of options.

When Missoula Radiology decided that "leave it" was a better option than "take it" when it came to BlueCross BlueShield of Montana's contract, the plan's response was "sue it." Fortunately, after organized medicine and many of the doctors in Missoula rose up to support the practice against the plan, the Blues' last response was "settle it."

The plan's recent settlement with the practice allowed the doctors to keep the right to say no to a contract they didn't like. It also blunted any immediate threat of other plans thinking of strong-arming physicians to pick up a pen and sign. The settlement was a major victory for physicians, and a reminder of what can be accomplished for doctors when they stand together.

Nominally, the lawsuit was about antitrust: that the 12-physician practice was throwing its weight around in its market-dominant position as the only radiologists in town. Yet painting the group as a sinister monopoly was a flimsy argument -- it had grown internally, not by acquiring other practices. The plan claimed that Missoula Radiology had acted illegally, in part because it had exclusive contracts for radiology at the city's two hospitals. But the hospitals said they wanted the exclusive deals to guarantee 24-hour call.

Antitrust lawyers and organized medicine saw the unprecedented case as a not-so-veiled attempt by a plan to bully a practice into a contract. Essentially, the "take it or leave it" option would become "take it -- or else."

Saying "no" is about all practices have left when it comes to contract negotiations with health plans. With years and years of market consolidation, mega-health plans have built up enough power so that, in most locales, one or two plans represent at least half the HMO and PPO lives. In some markets, that domination gets up into the 80% to 90% range, as measured by the AMA in its annual survey, "Competition in Health Insurance: A Comprehensive Study of U.S. Markets."

When the Montana Blues plan filed its lawsuit in November 2004, physicians stood their ground. Other specialty groups announced that they would drop their Blues contracts because of the plan's conduct. The Montana Medical Assn. offered its immediate support to the practice. The Litigation Center of the AMA-State Medical Societies provided financial assistance for the lawsuit.

For that matter, the uprising against the Blues gave Greg Lind, MD, a state senator, anesthesiologist and Montana Medical Assn. trustee, even greater support for his bill that would regulate how a nonprofit health plan, such as the Blues, could convert to for-profit status. (The bill recently passed and was signed by Montana Gov. Brian Schweitzer.)

In March, the Blues agreed to settle the case. Missoula Radiology agreed to remove from any contract, such as with local hospitals or even its own physicians, any language that could be construed as monopolistic. But it did not have to sign with the Blues. Essentially, life was unchanged for the practice.

That's not to say that plans might not find other ways to coerce physicians to think that leaving is not an option. Other specialists around the country have noted that plans are doing things such as no longer directly reimbursing out-of-network physicians, forcing the practice to collect from patients, who presumably might then try to convince the practice to re-sign with the plan.

But as the case in Montana shows, if physicians work together, they don't always have to take what a plan is dishing out.

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