Some New York physicians join the Teamsters

Doctors fear a rate cut by Excellus BlueCross BlueShield will create access-to-care problems for patients.

By Amy Lynn Sorrel — Posted May 15, 2006

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Nearly 300 Central New York physicians are seeking a new ally to help them level the playing field in a fight for control over patient care against the area's dominant managed care network -- the Teamsters Union.

Frustrated over recently announced cuts in reimbursement rates and existing restrictions on medical care imposed by Excellus BlueCross BlueShield, the doctors joined the approximately 1-million member Teamsters Local 1149 in Baldwinsville, N.Y., hopeful that the organization will help increase their leverage to negotiate with such large insurers.

Doctors say that Excellus recently informed those in Oswego County, N.Y., that effective June 1, it would implement a minimum 20% reduction in fee schedules, possibly higher depending on a doctor's specialty. Other policies include placing limitations on the types of drugs doctors can prescribe and requiring approval for certain medical procedures. Doctors say their discontent is exacerbated by earlier news that the nonprofit company recorded an 88% increase in profit over the previous year. They are concerned that the earnings exceed statutory requirements for a nonprofit company.

"Insurance companies have created barriers to care, and the concern is that if [they] have monopolies in a marketplace, they can create an unfair advantage against doctors," said Dennis J. Nave, MD, a Syracuse, N.Y., family physician who spearheaded the union effort and is vice president of the newly created Central New York Physician Teamster Alliance.

Excellus spokeswoman Elizabeth Martin declined to comment for the story.

The local doctors are believed to be the first in private practice to join the Teamsters Local 1149, according to that union's president, Steve Richmond. He said the doctors approached the union because they "were frustrated that the heavy-handed tactics by insurance carriers are getting into the practice of medicine."

With Excellus possessing about 70% of the market share in the Central New York area, local doctors are concerned that the insurer's dictates in medical care quickly could erode access to care for patients, said Robert A. Scher, MD, president of the Medical Society of the State of New York.

"Doctors are looking for any way to protect their patients from the colossus they are fighting against," he said.

MSSNY supports legal methods of collective bargaining on behalf of physicians as well as legislation to advance the effort. The medical society supports the doctors' plight against the large insurer to be able to preserve patient care but has not taken a position on them joining the Teamsters.

Trying to change the system

A member of the Florida-based union, the Federation of Physicians and Dentists, for four years, Dr. Nave said he and the other New York doctors joined the Teamsters because the union is planning to push for state legislation to allow physicians to bargain collectively in the state.

Federal antitrust law prohibits doctors from banding together to bargain collectively; however, a federal "labor exemption" allows employees who unionize to negotiate for wages and other work conditions. But the exception applies only to doctors who, for example, work for a hospital or a practice group, and are not self-employed.

"The federal government has been very strict in treating individual practicing physicians as competitors, so that when they try to get together to negotiate jointly, the Dept. of Justice and the Federal Trade Commission are quick to accuse them of price-fixing," said attorney Philip H. Liebowitz, an antitrust and health care lawyer based in Philadelphia.

Historically, the government has rejected doctors' arguments that they are similar to "employees" of managed care companies because they are subject to their reimbursement rates, he said.

Federal antitrust law, however, does allow independent doctors to use what is called a "messenger model," which Richmond and Dr. Nave say the Teamsters has implemented on behalf of its physician members.

The process allows an unrelated third party to negotiate with an insurer on behalf of doctors individually, but not as a group, Liebowitz said. With a group of 25 doctors, for example, he said, "it would have to be 25 separate decisions," and doctors cannot discuss rates with one another.

"It can be done, but it is not accomplishing the purpose doctors usually want it to when they are trying to increase their bargaining power," he said.

It is because of such legal complexities that the American Medical Association is pushing for federal legislation to allow collective bargaining for physicians, said Duane M. Cady, MD, chair of the AMA Board of Trustees.

"We support the rights of physicians to collectively negotiate so you get an appropriate balance between patient interests and health care delivery interests," he said. Unfortunately, because the law tends to discourage collective bargaining, doctors need to be wary of running afoul of antitrust requirements, Dr. Cady added.

As an ethical concern, AMA policy also states that doctors should be mindful of other union policies that could interfere with patients' access to care, such as striking, which the AMA opposes.

Dr. Nave, an AMA member, said the doctors' contract with the Teamsters precludes them from striking. He and Richmond said they hope that as they recruit more doctors into the union, it will strengthen their political efforts at state legislation that would give doctors a fair fight against insurance companies' dictates in medical care.

Dr. Nave, an active member of the Greater Syracuse Labor Council, said it was not just about payment.

"It's a physician and a patient issue combined, and we all have to work together," he said.

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