Managed-care organizations that give financial incentives to physicians to control utilization of Medicare and Medicaid services would have to disclose those arrangements under a regulation released last week by HCFA.
The new rule is designed to ensure that physicians in managed-care plans do not have a financial incentive to under refer patients to specialists, said Bruce Fried, director of HCFA's office of managed care.
"It's a proxy for quality and a safeguard against underreferrals," he added.
The rule covers any fully capitated agreement between a managed-care plan and a physician or group of physicians and any other arrangements that put more than 25% of the physician's compensation at risk. The rule applies only to Medicare and Medicaid managed-care plan, not private-sector plans.
However, Fried said he expects most managed-care plans, regardless of who they serve, to adopt the new rules.
"It's likely that this will become the de facto standard," Fried said.
The American Association of Health Plans, which represents managed-care plans, said the regulations "establish cumbersome standards for federal oversight of phsycian compensation arraingement." It also denied that health plans reward physicians for withholding medically necessary care.
Plans would be prohibited from making specific payments to physicians to limit or reduce medically necessary services under the new HCFA regulation. Managed-care plans would also have to file a series of disclosures to HCFA about their agreements with physicians and must make those disclosures available to beneficiaries. Any "intermediary organization," such as an independent practice association or physician hospital organization would also be subject to the same disclosure requirements.
"We want to make sure that HMO's don't set-up groups to skirt the regulations said Tony Hausner, senior analyst in HCFA's office of managed care.
Plans that put physicians at "substantial risk," meaning a physician or group of physicians is at risk for more than 25% of their compensation, the plan must provide stop-loss insurance protection to limit the potential financial losses of the physicians.
Congress ordered HCFA to formulate rules as part of 1990 legislation.