A federal consent decree forbidding the Federation of Physicians and Dentists, Tallahassee, Fla., from negotiating contracts between independent doctors and insurers hasn't kept the union from organizing more than 100 of the 130 orthopedic surgeons in Utah.
The union's role in Utah is as a third-party messenger, said Executive Director Jack Seddon, and the union understands the restrictions imposed by an October consent decree that settled a lawsuit by the U.S. Justice Department. The Justice Department had alleged the federation organized orthopedic surgeons to illegally boycott Delaware Blue Cross and Blue Shield in 1996 and 1997. The union settled without admitting guilt.
Federal antitrust law bars competitors from collectively setting or attempting to set prices or terms for their services. However, a third party, such as a union or a consultant hired for the purpose, may convey information between physicians and insurers, so long as it doesn't share confidential information among independent physicians or make recommendations about which terms to accept.
The organizing effort in Utah began earlier this year after 14 orthopedic surgeons in Ogden dropped out of health plans owned by the state's largest provider, Intermountain Health Care, Salt Lake City, citing contract disputes.
Some 85 physicians attended a union meeting on Oct. 17, and 60 met on Nov. 7, said Ken Lester, executive director of the Utah Orthopedic Society and chief executive officer of the Ogden physician group that triggered the initiative.
The surgeons understand the union's limitations and have hired a lawyer to ensure compliance, Lester said. The immediate intent is to educate doctors about their options with the union. "We have not discussed setting fees, nor is there any pressure to send a third-party messenger letter," he said. "The surgeons just want the ability to control their own destiny."
Doctors throughout the country face similar problems with managed care, Seddon said.
"Intermountain has the market cornered, like the Blues do in Delaware," he said. "Over the years, physicians have accepted some bad contracts that have come back to haunt them."
As long as the federation sticks with a messenger model, it shouldn't run into legal problems even though it represents the majority of the state's orthopedic surgeons, said David Marx, an antitrust lawyer with McDermott, Will & Emery, Chicago. "Messenger models that represent even 100% of providers in a particular community have in some cases been condoned by regulatory agencies," Marx said. Intermountain spokesman Daron Cowley said the healthcare system's problems with the doctors have been overstated. Two of the 14 surgeons who left IHC Health Plans are again participating on the company's panel, and the remaining doctors have indicated their intent to reapply for participation, Cowley said.
The surgeons left after demanding a 38% fee increase, he said. "We offered 6% increases in 2000 and 2% in 2001 and next year plan an increase between 4% and 9%."
Lester conceded that several Ogden doctors had returned to IHC Health Plans but said that was only because IHC refused to negotiate with doctors not on its panel. "For them to say it was a rate issue only is extremely narrow and entirely incorrect," he said. "The rate we offered was negotiable, and there were many other patient-care issues, such as (emergency room) staffing. Everything has come to a head because of evergreen clauses that perpetuate lousy contracts year after year. What's motivating physicians is an awareness of how these contracts have become so one-sided and detrimental to patient care."