'All products' clause causes woes in Texas
Are you obligated for all services?
Tempers are flaring in Texas, where Dallas-based Genesis Physician Practice Association (GPPA), one of the largest IPAs in the state, has let Aetna U.S. Healthcare know it intends to terminate its HMO contract with the payer. Aetna, in turn, has notified GPPA that if the IPA terminates its HMO contract, then all working relationships between GPPA and Aetna would be canceled. The basis for this decision: the "all products" clause in GPPA's contract with Aetna.
The stakes are high. If all working relationships were canceled, the care for as many as 300,000 patients could be affected, and all 300,000 could be forced to change physicians.
How has this situation, calamitous by any standards, come about? There are many possible causes, not the least of which is the "all products" clause. This clause is common in managed care contracts. The language is designed to obligate a provider to care for patients enrolled in any of the managed care organization's products. These products usually include HMO products, PPO products, point-of-service products, EPO products, and indemnity products.
Payers use all-products clauses so they won't have to sign up each individual physician or practice every time a new product is developed or offered in the community. In the case in question, Aetna claims that an all-products clause allows its patients to keep the same physician whether they are in an HMO, POS, or PPO plan.
The physicians of GPPA allegedly signed the contract that contained the all-product clause. However, because of difficulties interacting with Aetna regarding the exchange of clinical and financial information concerning the HMO contract, GPPA desired to terminate the HMO contract. Aetna refused because of the all-products clause, and a stalemate has occurred.
How could this have been prevented? The most obvious way is for physicians not to sign contracts containing an all-products clause. If the physician or group is unable to get the all-products clause deleted, then an attempt should be made to get it modified.
A typical modification would be to add a clause to the all-products clause stating that if the payer desires to make any material change in a product offering that would adversely affect the physician in terms of payment or performance of another obligation, the payer would be required to give the physician timely notice, and the physician could object to this change. If the agreement to the proposed change is not forthcoming, then the all-products clause would be rendered null and void for that product.
What will happen in Texas? It is too early to say and too difficult to predict. If the physicians stand united and their contract is terminated, then 300,000 patients stand to be very unhappy. Most of these 300,000 patients have employers who will hear from them and in turn be very unhappy with the radical change in Aetna's network. These same employers may choose to terminate their relationship with Aetna and offer their employees coverage by a health plan that includes a network similar to the original Aetna network.
Another possible scenario is that Aetna will threaten to cancel the contract with GPPA, but at the last minute will allow the physicians to continue to care for at least Aetna's PPO and POS patients, while working out the differences in the HMO discussions. This would cause less disruption to patient care.
In any case, the situation is a difficult one for all concerned. It would be extremely difficult for Aetna to find an alternative to the 748 member physicians of GPPA. It also would be extremely difficult for the GPPA physicians to lose the revenue stream represented by 300,000 patients.
With more and more payers offering a multitude of differing products, physicians should be careful in identifying contracts that contain all-products clauses and to understand the implications of signing such contracts. Don't let what happened to GPPA happen to you.
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