Georgia doctors sue for access to United's contracts with state plan

When the South Georgia Physicians Assn. LLC noticed that the health insurer administering Georgia's state employee health benefits plan was requiring different contract terms for rural doctors than for those in urban areas, the group got suspicious.

The Georgia Dept. of Community Health in 2005 awarded United Healthcare a five-year, $55 million contract to service the state-funded plan. It took effect Jan. 1, 2006.

While the insurer was recruiting doctors to participate in the plan, John Crew, a consultant who assists practices in health plan contract negotiations, saw as many as six different versions with varying fee schedules offering lower reimbursement to rural doctors, he said. At one point, United also put all-products clauses in some contracts, added Crew, who works with South Georgia Physicians. The independent practice association has about 280 physician members practicing in about 30 counties in predominantly rural southern Georgia.

"When the state enters into a vendor relationship, doctors ought to be able to participate on equal terms to other providers and should not be disadvantaged by where they are located," Crew said.

The physician group, joined by the Medical Assn. of Georgia, filed an open records request in March 2006 asking United and the health department for documents related to the state contract. Under state law, records maintained by a private entity performing a service on a government agency's behalf are subject to public disclosure. The medical association and physician group asked for fee schedules, executed physician and hospital contracts, template physician contracts, and any correspondence between United and the state health department.

But United filed a lawsuit seeking a court order to prevent the documents -- some of which the Dept. of Community Health already possessed -- from being released. The health insurer argued that the records contained trade secrets and, therefore, were exempt from disclosure under an exception to the state's open records law that shields confidential, proprietary information. The Medical Assn. of Georgia and South Georgia Physicians joined the suit as defendants.

"United is acting on behalf of the state, and the public has a right to know how the state's money is being spent," said Donald J. Palmisano Jr., Medical Assn. of Georgia general counsel. "It's all about transparency."

Open records or trade secrets?

The Georgia Court of Appeals agreed in July. The court said the documents the doctors sought constituted public records under state law.

However, the judges said that, for now, doctors were entitled to see only the records already turned over to the state -- the template contracts and correspondence between United and the health department. The court noted that the state's contract with United specified that information in the department's hands was subject to public disclosure.

The judges concluded that a lower court failed to analyze whether the information not yet turned over to the health department -- namely United's fee schedules and finalized physician and hospital contracts -- qualified as confidential trade secrets. The appeals court sent that portion of the case back to a trial court to decide.

Doctors and United have appealed to the state Supreme Court. The Dept. of Community Health declined to comment on the case. United contends that disclosing any of the records would give doctors an unfair edge in negotiating with the insurer and, as a result, drive up health care costs.

United spokesman Tyler Mason said fairly negotiated contracts are "crucial to achieving the goal of providing employers and employees with access to affordable health care services." The company strove to balance that objective with providing reasonable compensation to physicians, he added.

South Georgia Physicians consultant Crew said doctors are the ones at a disadvantage.

"[A physician] can't negotiate when [he or she] is a single doctor or one of two in a rural community," he said. At the same time, in some cases rural doctors are treating a large number of state employees.

Physicians fear that the case could set a dangerous precedent if the information they are seeking is not revealed, especially as states increasingly contract with managed care organizations to administer publicly funded health insurance programs.

"If you don't have transparency, what you have done is given [health plans] a tool to say, 'We just won't provide this to the state, and we won't have to let you know,' " Crew said.

The Georgia case is similar to a legal battle in Connecticut.

A coalition of patient advocates there sued to find out Medicaid HMO physician reimbursement rates. It suspected doctors were taking fewer Medicaid patients because of low pay.

A state trial court in 2006 rejected the HMO's argument that the information constituted proprietary trade secrets exempt from disclosure under Connecticut's Freedom of Information statute. The case prompted Gov. M. Jodi Rell in 2007 to issue an order requiring insurers administering state health plans to comply with the open records law as part of their state contracts.