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Health insurers are abruptly terminating physician contracts

Proposed surprise medical bill legislation has coincided with a significant number of insurance contract terminations.

Jeff Lagasse, Associate Editor

Physician anesthesiologists are being forced out of network as insurance companies terminate their contracts, often with little or no notice, according to a new national survey from the American Society of Anesthesiologists.

Initial results find 42% of respondents had contracts terminated in the last six months, while 43% of respondents experienced dramatic payment cuts from insurers -- both mid-contract and at renewal -- in some cases by as much as 60%. Some of the impacted contracts were signed less than six months ago.

The informal, non-scientific survey, which was distributed earlier this month, received responses from 76 practice groups in 33 states. It confirms anecdotal complaints that proposed surprise medical bill legislation has coincided with a significant number of insurance contract terminations and unilateral lower payment adjustments by health insurance companies.

WHAT'S THE IMPACT

Survey respondents came from a variety of groups of different sizes, from 35-member physician groups to large national groups.

The responses also indicated that UnitedHealthcare was noted as the insurer most associated with these changes, but Aetna, Cigna and Blue Cross Blue Shield also were mentioned.

While the timing alone suggests insurance companies are motivated by factors related to anticipated legislative changes on surprise medical bills, some survey respondents reported they were specifically told by insurers this was the case.

This trend is why ASA supports a solution to surprise medical bills that does not further encourage insurers to engage in these negotiating techniques -- techniques that create more out-of-network physicians.

The group said it believes any solution should include a fair, market-based mechanism for physician anesthesiologists to be paid for their healthcare services, including a robust independent dispute resolution process in which payment disputes between insurers and physicians can be resolved without the involvement of the patient.

One respondent said an insurance company "abruptly terminated our longstanding contract a few months ago. A few days later we were offered a new contract with a 60% reduction in our professional fees. We were advised by our consultant that commercial payers are emboldened to force anesthesiology groups into accepting severe pay reductions in the face of new surprise medical billing laws."

Another respondent said, "We have been in-network with all carriers for the last 30 years" until an insurance company "offered without negotiation a greater than 60% reduction in rate or we had to go out-of-network. We were, therefore, forced out-of-network. We are making every effort to ensure that our patients do not get caught in the middle of this nefarious insurance practice." The insurance company "mentioned the balance billing (or surprise medical bills) legislation in our discussions."

THE LARGER TREND

University of Michigan research from earlier this month found one in five operations could result in a surprise bill potentially totaling hundreds of thousands of dollars.

On average, that potential surprise bill added up to $2,011. That's on top of the nearly $1,800 the average privately insured patient would already owe after their insurance company paid for most of the costs of their operation.

All the patients in the study chose a surgeon who accepts their insurance, and had one of seven common, non-emergency operations at an in-network hospital or at an outpatient surgery center.

But they still ended up potentially owing large sums to pay other people involved in their operation or their follow-up care. The average potential surprise bill ranged from $86 for medical imaging specialists involved in a hysterectomy, to more than $8,000 for surgical assistants involved in a breast lumpectomy. These out-of-network bills were significantly more common for patients who had complications after surgery.

If the patient had an outpatient procedure with an in-network surgeon, but it took place at an ambulatory surgery center that was out-of-network, the potential surprise bill could add up to more than $19,000.
 

Twitter: @JELagasse

Email the writer: jeff.lagasse@himssmedia.com