After getting battered by managed care in recent months, Texas physicians are fighting back -- pushing insurance regulators to turn up the heat on HMOs by investigating controversial practices and slapping sanctions on those guilty of bending the rules.
The get-tough attitude comes on the heels of two new state laws: one that allows HMOs to be sued for malpractice (see February, page 68), and one that requires them to disclose performance records (see related story, page 50). Both are part of a new package of Texas laws that affect managed care.
In one of two recent high-profile cases, Dallas-based Harris Methodist Health Plan (the largest HMO in Texas) was the subject of a three-month investigation by the Texas Department of Insurance. The department was investigating the HMO's practice of fining physicians who write more prescriptions than the maximum their contracts stipulate.
The investigation was spurred by complaints from the 20-doctor Fort Worth Clinic, according to department spokesman Dana Palmer.
In a written statement, Leah Rummel, deputy commissioner of the department, says the agency's attorneys are considering possible disciplinary action against the HMO. The Texas attorney general's office also has launched an investigation.
"Our attorneys will make the final determination about whether any violations occurred and, if so, exactly what HMO rules and regulations were violated," Rummel says.
The fracas began when Fort Worth Clinic sued Harris Methodist over its prescription policy. Harris Methodist represents 25% of the group's client base, according to George Parker Young, the Forth Worth lawyer representing the doctors.
The 10 primary-care doctors involved in the lawsuit allege the HMO's prescription policy has forced them to choose between their patients' best interests and their own financial health.
The doctors claimed the conflict of interest inherent in the practice of fining physicians for writing prescriptions was illegal. Young says the group's lawsuit is the first under the new statutes. He also says the decision to sue an HMO as large as Harris required the doctors to take a "leap of faith" that their patients would stay with them. A second suit was filed against Harris by the clinic's 10 specialists, he says.
"They expect half of their (Harris) patients will switch health plans," Young says. "Doctors have been beaten up by HMOs in the last couple of years. Now, you're starting to see the reassertion of the physician's traditional role as patient advocate."
Under the terms of the Harris contract, the doctors were given a pay bonus as an incentive to limit their referrals to specialists, the number of prescriptions they wrote and the number of patients they sent to the hospital. The contract called for 25% of their pay to be withheld every year contingent on their staying within those limits. When they failed meet the prescription limits, they were penalized $100,000 or $10,000 per primary-care doctor.
"There is no way the doctors could meet that budget without denying medically necessary care," Young says.
But a Harris Methodist spokesman disagreed. "We would never take any action that would threaten the health of our members," says Brian Levison, vice president of communications.
"The doctors' action put the members in the middle of a business dispute, and that's unfortunate. Many had to change doctors."
A jury trial was scheduled for Feb. 9.
In another case involving state action against an HMO, the Houston-area Medicaid HMO Blue, a subsidiary of Blue Cross and Blue Shield of Texas, was fined $250,000 and saw its enrollment frozen for a month as a penalty for not following the rules for enrolling new patients, says Stacey Hull, director of development for the Texas Department of Health's Bureau of Managed Care. The action was taken by the Texas Department of Health and the Texas Health and Human Services Commission.
State officials also reduced the number of Medicaid patients HMO Blue could receive; in lieu of the automatic assignment of patients it had been getting from the state, it will now get only those patients who fail to designate a specific choice of health plan.
The state took action, Hull says, after a Medicaid broker notified officials that packets containing up to 50 completed and duplicated forms had been received from individual physicians' offices.
To guard against the potential for conflict of interest, state Medicaid regulations don't allow doctors to enroll patients in HMOs or to steer patients to HMOs, Hull says. The regulations require individual patients to fill out the forms and submit them.
David Bick, vice president of government programs for HMO Blue and its parent company, says a "number of doctors" who were new to the Medicaid program began signing up patients directly.
Doctors who once shunned Medicaid patients in Texas are now seeking their business because of their increased value to HMOs, Bick says. Recently, Texas began to pool its Medicaid funds, allowing HMOs to earn a profit on Medicaid patients if they can keep the cost of treatment below the amount the state has provided.
The potential for profit is good; in the Houston area alone, the pool of Medicaid funds amounts to $268 million, according to Bick.
"This is a very poor population," he says. "They may not speak English. Many don't have phones at home. The doctors didn't want their patient base going to hospitals that weren't familiar with them."
Despite the fine against HMO Blue, it plans no action against the doctors who bent the rules. "On the second time around, you can tell the doctor they're out," Bick says. In the meantime, HMO Blue has had its doctors sign a sheet confirming they have been educated about the rules that apply to Medicaid.
Plus, it has begun recruiting other doctors in other Texas cities into Medicaid programs. In Dallas, for example, it is recruiting 60 doctors to be Medicaid providers.