Washington medical society hopes to negotiate clinical, other contract issues with health plans
Washington Health Plans
June 30, 1997
So far, the Washington State Medical Association (WSMA) is the only medical association in the country that has aggressively sought to negotiate contracts on behalf of a collective physician group. But, as in other areas of health care, Washington could be charting a course.
About 2,000 physicians have signed up to participate in the new WSMA Representation Services, a subsidiary of WSMA, but the service has yet to be tested since no carriers have been enlisted. The group is in early discussions with a few carriers.
Lori Preston, executive director of the WSMA Representation Services, says the health plans most likely to sign up with the service are those that want to improve their relationships with physicians, and newer players in the market looking to gain a foothold and become more "physician-friendly."
The WSMA is providing the program free to its 8,000 members. The service is prohibited from negotiating fees—a clear violation of state and federal antitrust laws. Rather, its role will be to identify areas of concern in contracts, negotiate problem clauses with the carrier, and encourage contract consistency. Ms. Preston notes that half of WSMA's members are in medical groups with between three and 20 physicians, or are in solo practices, which don't have the bargaining clout that larger practices do.
More negotiating clout
If the program does what it set out to do, physicians will be able to reduce the time they spend poring over legal stipulations. They won't overlook clauses they don't understand when the time comes to sign a contract.
"There is a lot of terminology [physicians] don't understand," says Peter Marsh, a Tacoma-based infectious disease specialist and president-elect of the WSMA. "With 2,000 physicians you have a lot of leverage," he adds.
"The idea is to put providers back in the driver's seat when it comes to contractual arrangements with carriers," says Debra Wiggs, clinic administrator for Lynden Family Medicine in Lynden WA. "So often it's not what's in the contract, it's what's not in the contract that's the issue," she says.
Unless a physician sits down and negotiates each contract line item by line item, the carrier usually holds sway. "Part of it is to look at details, particularly in a small practice where they don't have the expertise in negotiation," says Mr. Marsh. WSMA will serve as their expert "to make sure we are looking at the fine print and the real costs."
"I think it has a lot of potential," adds Mark Adams, MD, vice president of the WSMA. Dr. Adams says it is becoming increasingly difficult for physicians to have any standing with a health plan when it comes to ironing out elements of a contract. Thus, there is little incentive for health plans to negotiate or to pay attention to the concerns physicians raise about contract terms, particularly if it has to be done on a case-by-case basis. "Our bargaining position is really pretty poor in smaller physician groups. . . . There really is not much give and take," he says.
The state's Health Care Policy Board promulgated the eight areas that the WSMA subsidiary can negotiate on behalf of physicians. These are:
• formulating and applying reimbursement methodology;
• issues surrounding provider and health care plan liability for treatment or lack of treatment of health carrier enrollees;
• administrative procedures including methods and timing of provider payment for services;
• dispute resolution procedures relating to disputes between health carriers and providers, including disputes between providers and health carriers that originate from enrollees;
• patient referral procedures;
• quality assurance programs,
• health services utilization review procedures; and
• carrier provider selection and termination criteria, or whether to engage in selective contracting.
Ms. Preston says there are many areas where physicians are seeking guidance in contract negotiations, including hold harmless clauses, liability insurance requirements, patient grievance issues, retroactive disenrollment, medical necessity billing, and claims turnaround times. Some carriers seek to limit the right of the physician to refer patients. Physicians also object to clauses that allow carriers to terminate contracts without material cause.
One of the hot-button issues for physicians is a provision contained in some contracts that indemnifies health plans from malpractice when patient harm stems from the carrier's refusal to pay for treatment.
The so-called "Wickline" provision, stemming from a case in California, is one that Washington physicians want purged from contracts because it shifts all risks to providers when care was deemed "unnecessary" by the carrier. This is an issue that is drawing attention at both the state and federal levels. Texas has just passed a law that would let HMO enrollees sue health plans for malpractice under these kinds of scenarios. Similar bills are pending in Congress.
Ms. Wiggs is hoping the new service will lead to some common administrative requirements in contracts. "When you negotiate a contract, you are not just negotiating for price, you are also negotiating a lot of administrative requirements as well. . . I am very intrigued by the concept of us being able to go to carriers and challenge them to provide some consistency administratively."
Roger Garretson, who administers Orthopedic Consultants of Washington in Seattle, says there are many pluses to having one entity handle contracts. "We deal with hundreds of insurance companies. . . By having one negotiator and one contract negotiation person who develops a standardized contract we save a lot of time and effort."
Says Ms. Wiggs, who administers a 10-physician practice: "We have about 6,000 covered lives with one managed care plan, and it requires a full time person just to manage that plan."
Still, it is too early to tell how far carriers will go in standardizing contracts. Mr. Adams is optimistic that carriers will ultimately see the advantage of standardizing contract conditions for large groups of doctors. But, he and his colleagues admit they are approaching the field gingerly. In fact, few carriers have even heard about the program.
Although physicians in the state are intrigued by the new program, many are waiting before they sign up. Mr. Adams acknowledges that larger physician groups, those with at least 100 physicians, have been reluctant to turn over bidding responsibilities to one entity until they see what its efforts can produce.
One of the few provisions to survive the 1995 effort to repeal the state's 1993 health reform law helped make the service available. WSMA fought to retain a provision in the 1993 law for providing state immunity from antitrust laws.
— Janet Firshein
Contact Ms. Preston at 206-441-9762; Mr. Marsh at 206-627-4123; Ms. Wiggs at 360-354-1333; Mr. Adams at 360-479-4203; and Mr. Garretson at 206-386-2600.
Washington medical society hopes to negotiate clinical, other contract issues with health plans
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