Physicians are continuing to walk away from contracts with managed-care giant Aetna U.S. Healthcare.
Last month, independent practice associations representing more than 2,500 physicians in Texas and in the Louisville, Ky.-southern Indiana area announced they were terminating their physician contracts with the Blue Bell, Pa.-based insurer. A number of other physician groups have canceled Aetna contracts in recent months, citing unacceptable contract terms and poor relations with the insurer (See May, page 2).
Aetna is working to repair soured provider relationships, and last month unveiled an expanded and improved electronic claims submission and referral program that promises to speed physician payments.
These latest bailouts, however, are a reminder to Aetna and other health plans that physicians are finding financial and contracting strength in numbers. And as more physicians join IPAs and large group practices, they also may be more likely to terminate undesirable managed-care contracts.
"Physicians are testing the waters. They feel that they must finally be heard, and in a unified voice (are saying), 'We're not going to take this anymore. You can't just arbitrarily impose new changes and expect us to swallow them,' " says Medical Director Jan Diener, M.D., of Physicians Inc., an IPA representing 1,850 physicians in Louisville and southern Indiana.
Physicians Inc. and Genesis Physicians Practice Association, an IPA representing about 750 northern Texas physicians, were the latest to terminate their Aetna contracts. Like provider groups in Ohio and Florida before them, Physicians Inc. took issue with Aetna's "all-or-nothing" contract, which requires providers to accept all Aetna products, including the HMO.
Physicians Inc.'s board of directors issued a statement declaring that "physicians should not be forced to take capitation or other risk contracts."
"Some practices at this point do not feel they're ready for a capitated or risk contract and would like to continue their present practice types, (while) some are very aggressive and have the efficiencies and know-how to proceed," Diener says. "The individual physicians should be able to choose whether or not they want to participate."
The Physicians Inc. contract is set to terminate in September and would affect 70,000 patients.
Aetna's all-products contract is at the heart of the company's plan to build a nationwide provider network, which would allow enrollees to stay with their personal physician no matter which plan they -- or their employer -- are in.
Spokeswoman Stacey Jones says Aetna would like to retain the Physicians Inc. relationship, but the company stands by its all-products contract.
According to Genesis President and Chairman Ralph Turner, M.D., his IPA's primary complaint with Aetna is the company's failure to properly manage the contract. Turner says Aetna's failure to provide the physicians with correct and timely business and financial information prevents the IPA from tracking patient care and physician performance and subsequently from developing best practice initiatives. The contract is set to expire in mid-July and affects between 5% and 20% of patients in individual Genesis practices.
"Our doctors want to know who's in their panel and where their patients are," Turner says. "Most important to us is the utilization management because we feel like that's what we need to take care of patients."
Malinda Sullivan, president and CEO of System Health Providers, which manages Genesis' HMO contracts and is owned by the physician group, cites Aetna's failure to provide pharmacy information as an example of poor utilization management. "The physician organization is at risk for pharmacy costs and has been asking since July 1, 1997, for pharmacy data -- basically claims data on what's been paid and who prescribed what," she says. "When the pharmacy information was finally received, it was very incomplete and over half of the prescriptions did not identify who the prescribing physician was."
Even before the IPA acted, pediatrician Theresa Shouse terminated all her individually negotiated Aetna contracts last fall. Aetna had accounted for about 25% of her patient base, but the Genesis vice president says she ultimately lost only about one-third of her Aetna patients because most changed their insurance or paid more to continue seeing her.
"We terminated because of a multitude of problems; low reimbursement of claims, billing problems, excessive paperwork. Aetna was disorganized and inefficient," she says.
In response to Aetna's new, much-hyped electronic claims submission program, Shouse says: "In the past, we had electronic claims and it didn't seem to help."
Genesis and Aetna are in negotiations, and Shouse says the IPA would like to salvage the contract, but only if Aetna corrects its problems.
Regardless of what happens in current negotiations, Shouse believes terminations by groups like Genesis and Physicians Inc. send a powerful message about the importance of working together. "If the insurance groups are able to divide and conquer us, by going to individuals for contracts, we will lose any bargaining power in the marketplace," she says.