Avoid the consternation of all-products’ clauses
They are legal, but tricky
So-called "all-products" clauses in managed care contracts requiring physicians to accept all present and future insurance products and payment methods offered by the insurer are a major source of irritation among providers.
Some states have outlawed those all-products provisions. Here are some tips from William H. Maruca, a partner in the Pittsburgh law firm of Kabala & Geeseman, to help make all-products provisos less of a pain when negotiating a Medi-care risk agreement.
It’s perfectly legal for plans to include an all-product clause in its Medicare+Choice physician participation contract. However, the insurer "risks violating the Medicare and Medicaid anti-kickback law if they demand a price concession in exchange for access to other lines of business," says Maruca.
That’s because anti-kickback regulations say
it’s a felony to "offer or pay, solicit, or receive any remuneration in exchange for referring any business reimbursable under the Medicare or Medicaid systems," he points out.
Pure extortion
In fact, the Department of Health and Human Services’ Office of Inspector General (OIG) has put HMOs on notice that it feels forcing physicians to provide services at below-market rates in exchange for access to their other health care programs could be treated like extortion — and subject to the same civil and criminal penalties.
The OIG addressed the issue in a Nov. 15, 1999, compliance guidance for Medicare+Choice organizations: "We are concerned that a managed care organization or contractor may offer (or be offered) a reduced rate for its items or services in the federal capitated arrangement
in order to have the opportunity to participate
in other product lines that do not have stringent payment or utilization constraints.
"This practice is a form of a practice known as swapping.’ In the case of managed care arrangements, low capitation rates could be traded for access for additional fee-for-service lines of business," said the OIG. "We are concerned when these discounts are in exchange for access to fee-for-service lines of business, where there is an incentive to overutilize services provided to federal health care program beneficiaries."
At the state level, Nevada has declared all-products clauses to be an unfair trade practice,
and Kentucky’s General Assembly outlawed all-products clauses. Meanwhile, a new law went
into effect last July in Virginia protecting providers who refuse to participate in some of a plan’s products. Maryland also enacted similar legislation.
In a settlement with the Texas Attorney General’s office earlier this year, Aetna US Healthcare also agreed to stop including an all-practice clause.
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