Physician's Capitation Trends

Insurers budge on some rigid capitation issues

The ice between capitated physicians and insurers may be thawing a bit. Just recently, physicians in two states scored some policy changes they’ve been pursuing for quite some time. In Georgia, the Atlanta-based office of Aetna announced these changes, effective Jan. 1, 2001:

  • Primary care physicians in small practices (in groups of 200 physicians or fewer) will receive fee-for-service payments from Aetna/U.S.Healthcare HMO.
  • Physicians will receive 90 days advance notice of significant payment or administrative changes to provider contracts, which will have a material adverse financial impact.
  • Regular meetings will be held with the Medi-cal Association of Georgia to discuss ongoing issues.
  • Computer discounts and free Internet access will be given to all physicians, dentists, nurses, and medical students across the country via an agreement with Hewlett-Packard Company and NetZero Inc.

HMO enrollees will see some new flexibility, given these changes:

  • Simplification of the precertification process, including the areas of outpatient surgery, most durable medical equipment, and many types of injectable drugs.
  • The option to use specialists as a principal physician for members with serious illnesses.

Georgia physicians called upon Insurance Commissioner John Oxendine to achieve the changes. "These policy changes are just the beginning of our overall efforts to strengthen relationships with Georgia physicians and, indeed, with all our constituents," says Aetna’s Georgia-based general manager Mary Louise Osborne. "My sincere hope is that these initiatives will form a more respectful and collaborative relationship with the medical community."

Oxendine describes the changes as a move in the right direction. "We have been working for sometime to improve the relationship between doctors and HMOs for the ultimate benefit of consumers. I’m glad our work is paying off. Aetna’s announcement represents a significant first step."

Two weeks earlier, Aetna made a peace offering to California physicians who have vociferously protested high drugs costs amid what they decry as rigid, underpaid capitated agreements. Aetna announced that it will immediately pay doctors the cost of any new vaccines recommended by the American Academy of Pediatrics (AAP) in Chicago and the Centers for Disease Control and Prevention in Atlanta. This includes payment for the newly released vaccine, Prevnar, which protects infants and children from pneumococcal infections that can cause ear infections and meningitis.

Once the appropriate capitation increases are determined and Aetna and the physician medical groups sign the new contracts, the medical groups will regain financial responsibility.

"Through our conversations with the CMA [California Medical Association] and the AAP, we were made aware of the financial challenges physicians are facing to provide the new vaccines to their patients prior to the change in their contracts," says Howard Arkans, MD, regional medical director for Aetna in San Ramon, CA. "This policy will ensure that our [policyholders] in California receive the appropriate immunizations for their children and that physicians are compensated accordingly for the cost of providing the vaccine to our members."