Health plan contracts: Help in leveling the playing field

Negotiating a contract with a health plan is typically an exercise in frustration. There's you, the physician. Then there's the plan, most often a multibillion, even multinational corporation with armies of lawyers, plenty of data and a market share that would make walking away from a contract a major, disruptive event in your practice life.

As the American Medical Association recently reported, 99% of 313 U.S. metropolitan areas studied would be considered "highly concentrated" under U.S. Dept. of Justice and Federal Trade Commission guidelines. And that was as of Jan. 1, 2007, which are the latest data available.

Such an imbalance -- what AMA President J. James Rohack, MD, called the "near total collapse of competitive and dynamic health insurance markets" -- goes a long way toward explaining why over the years health plans have been able to take a hard line toward physician contract negotiations, while raising premiums, deductibles and co-payments on patients with near impunity.

As a result, the AMA is continuing to call on the Justice Dept., which has approved more than 400 plan mergers, to consider a retrospective study of those mergers. This research would identify the causes and consequences of health plans' market power and create a system for predicting the effects that mergers have on patients and physicians.

As organized medicine fought the abuses of health plans, the AMA also has offered resources to physicians to help them ensure that their contracts are as fair as possible. Notably, it has done this through the Model Managed Care Contract. First issued in 1997 and revised three times since, it served as a basis for the kind of contract a physician would want with a health plan, with the broadest possible language so it could be used by any doctor.

On March 16, the AMA's Private Sector Advocacy debuted the next generation of that contract: the National Managed Care Contract. It differs from the previous model in that, rather than being presented as a fixed document, the National Managed Care Contract is meant to be individualized from a rich, online, searchable database of state laws, regulations, AMA policies and issue briefs. It is available to AMA members only (link).

It is particularly useful as a means of making sure the contract you receive -- one that might be a health plan's national boilerplate -- follows the laws and regulations in your state. For example, you easily can check your state's prompt-pay laws to make sure the insurer's contract complies with the minimum turnaround after you submit a clean claim. Another example: You can get your state's definition of a clean claim to make sure the health plan contract doesn't differ.

The database behind the contract also will be updated frequently, including a planned addition of federal laws and regulations coming out of the health reform bill.

Private Sector Advocacy also has significant resources available to nonmembers as well. Those resources include health plan complaint forms; information on how to challenge your rating and placement in a tiered network; tool kits to prepare, follow and appeal a claim; and details on national legal settlements against health insurers (link).

All of these services are designed to help physicians move forward with confidence in making the practice contracting decisions that have such an important impact in their professional lives. Health plans have long benefited from the resource advantage they have in contract negotiations, and it is not too late for physicians to start using resources of their own.