Demand causing legal troubles

Increasing demand for Preferred Provider Organization (PPO) products is causing legal problems for PPOs trying to meet that demand.

Because of a law prohibiting physicians from sharing price information, fixing prices, and boycotting particular health plans as a group, they are turning to other methods of price gathering.

An alternative used by Mount Sinai Health System in New York City is a third-party messenger agent who collects pricing information in the region, states an article in Medical Network Strategy Report.

The messenger has single signature contracting authority. After examining various contracts for each physician based on contracting parameters set by individual physicians, the messenger signs the contract if the parameters are met. If not signed, the contract goes to the physician for review and signature.

Messengers allow the PPO’s 3,500 physicians and 23 hospitals to participate in various contracting opportunities, and contracts can be implemented quickly. The network takes on a degree of authority as hospitals and physicians have handed over some of their power, and messengers can also provide services to self-insured employers. But insurers will push reimbursement to minimum levels if they find out the minimum fee schedules in the market.