Five Texas physicians who fought back when a giant insurer excluded them from a health plan have been dealt another blow in their legal battle.
The 5th U.S. Court of Appeals in New Orleans ruled this month that the physicians who were dropped from Aetna Life & Casualty's PPO were not entitled to sue under Texas' laws governing PPOs.
The suit dates back to September 1993 when 35 Houston physicians were notified that their participation in Aetna's PPO of 2,000 doctors would be terminated within 90 days. Aetna argued the termination was a business decision and that the physicians signed contracts saying either party could terminate the contract without cause with 90 days written notice.
The practice of dropping doctors from the PPO, called "de-selection," prompted an outcry from physician groups. Five of the de-selected physicians, the Texas Medical Association and the Harris County Medical Society sued in November 1993. The physicians argued that Aetna's termination-without-cause provision violated Texas administrative regulations governing preferred provider plans.
Aetna provided the physicians with information on why they had been dropped from the provider panel after the suit was filed, and two of the physicians were subsequently reinstated.
In 1994, a U.S. District Court judge in Houston ruled in favor of Aetna, and this month, the federal appellate court upheld the district court. The appeals court said the physicians did not have legal standing to pursue their complaint.
"Their ruling reaffirms the fact that Aetna and the Texas Department of Insurance have in place well-defined processes that address physician contracts with managed-care organizations, as well as a comprehensive appeals process to ensure that physicians have every opportunity to appeal contractual procedures," said Joseph T. Blanford, vice president and chief operating officer of Aetna Health Plans of Texas.
In the wake of the suit, Aetna said it has implemented a plan to analyze patient records to determine who would be affected by a physician's de-selection. In such a case, enrollees are notified that their physician is no longer participating and are given the names of three other physicians in their area.