Are providers saying they won't take it anymore?

Some say Aetna's problems in Dallas are just a start

Methodist Hospitals of Dallas made waves when it announced plans to terminate its contract with Aetna U.S. Healthcare of Dallas effective April 20. Some providers and experts told Physician's Managed Care Report we haven't seen the last of the ripple effects. Across the country, they say, physicians are so fed up with unsatisfactory managed care contracts that they might follow Methodist's lead.

"Physicians are becoming increasingly concerned about the one-sided nature of managed care company contracts, which are take-it-or-leave-it contracts," says J. Leonard Lichtenfeld, MD, FACP, who works for a physician practice management company in Pikesville, MD.

"And having reviewed a number of these contracts, I can't imagine why anybody would sign them," Lichtenfeld adds.

Murfreesboro (TN) Medical Clinic has been trying to restrict its contracts with managed care organizations to those that provide reasonable compensation, says Donald J. Lloyd, FACMPE, chief executive officer of the clinic, which has 41 physicians in an area 35 miles southeast of Nashville.

"There is a point beyond which doctors are no longer going to accept the reimbursements being paid and are no longer going to put up with substantial infringement on their rights to decide what proper care is and how it is to be delivered," Lloyd says.

The Murfreesboro market, which has a population of 55,000, has about 25 insurance carriers. This means the clinic can easily say "no" to some of them without harming its business, Lloyd says.

Managed care has helped change some of these practices in beneficial ways. But MCOs also have gone too far in efforts to increase profits, Lloyd contends. If physicians want to take control back from managed care, then they'll have to take the initiative themselves in cutting costs and improving efficiency, he adds. "So what I say to doctors is, if you want to maintain control of health care, then you have to reinvent yourself continually."

If a physician group is a member of every single payer plan in its area, and these plans pay providers (and charge consumers) a wide range of rates, then there is no incentive for consumers to support plans that cost more, Lloyd notes. But if consumers believe a particular clinic has better service and care and better claims processing, then they may be willing to pay a little more to their health insurer so they can use that clinic.

"Every market is a little different, but when a revolution spreads, it starts in small places and gets bigger when others learn that sticking together makes a difference," Lloyd adds. Lichtenfeld cautions that different physician networks cannot act in a concerted manner to turn down undesirable HMO contracts because that might subject them to antitrust charges. "Each physician of each group has to act on their own volition," he says.

However, managed care contracts in some areas have lowered the rates so much that many physicians are saying, "`I've had enough, and I'm not going to do that anymore,'" Lichtenfeld says.

The medical community is beginning to sense that the pendulum is shifting away from managed care having the power base as consumers and legislators are scrutinizing payers' practices, he adds.

Delayed payments cause dissatisfaction

Methodist Hospitals made its decision to terminate its contract with Aetna because of a series of problems with the company, including delayed payments and annoying requests for more documentation, says Sam Lopez, APR, director of public relations for the 653-bed hospital system.

The hospital system also objects to Aetna's habits of reducing physicians' fee schedules without consulting or negotiating with physician groups, Lopez says. "This is very important because we consider ourselves a partner with our physicians," he says.

Methodist Hospitals' decision was completely unexpected, and has not resulted in a surge of providers terminating contracts with Aetna, says Kelli Brady, spokeswoman with Aetna U.S. Healthcare in Dallas. The insurance company covers nearly 14 million lives through its HMO, PPO, indemnity, disability, and other health care ervices.

"Actually, very few physicians have left our network," Brady says. "There were a lot of rumblings about threatening to leave, but the turnover was 3%, which is less than the regular turnover rate, and our network has grown by more than 25% over the last 12 months."

As to the hospital's complaints, Brady says Aetna had problems in April 1997 with delayed claims payments to Dallas providers because of a systems conversion, but that has since been straightened out.

Aetna still is willing to negotiate with Methodist Hospitals, Brady says, although no agreement had been reached at press time.

Lichtenfeld says Aetna and other large insurers have suffered financial setbacks in the past year because they have priced their products too low. And this may be why they are putting a tighter squeeze on providers.

"Aetna still made a profit last year," Brady says. "The earnings were not what Wall Street had expected, which is a difficult thing to anticipate, but we're still a profitable company, and it is not related to premium increases."

Aetna and other managed care companies are here to stay regardless of what the critics think, Brady states.

"Managed care brings a lot to the table in terms of information and technology and has brought health care to significant advances," Brady adds.

Even those who dislike the managed care trend admit that physicians have improved some health care services because of MCO influence.

There are many cases, for example, where physicians have overprescribed antibiotics, used outdated techniques, or performed operations that the latest medical research shows are no longer necessary, Lloyd says. "Normally, we don't change until someone forces us to change."