AMA launches new tool to help physicians correct unfair managed care contracts

The American Medical Association has unveiled its new National Managed Care Contract and database, designed to help physicians analyze and negotiate contracts with insurers and provide relief from unfair business practices.

The online resource, which the American Medical Association (AMA) says will provide physicians with an avenue to ensure the contracts they are entering into with some managed care organizations are not one-sided, is the first of its kind.

Creating a more even field

“The concentrated market power of large health insurers gives them an unprecedented advantage in dictating key aspects of health care to physicians,” stated AMA president J. James Rohack, MD, in a press release. “The AMA’s new resources will be a welcome guide for negotiating fair contracts with health plans angling for an even greater advantage over physicians.”

The National Managed Care Contract’s (NMCC) aim is to create model contract language that complies with the managed care laws of all 50 states and the District of Columbia. Further, it seeks to cover a broad range of physician concerns with managed care contracts by providing a “frame of reference” against which to compare and evaluate those contracts.

The searchable database allows for access to updated statutes and regulations in each state, as well as covering the managed care contracting process, the contract itself and the business relationship between physicians and managed care organizations after the agreement is signed.

“It is definitely needed”

David M. Glaser

David M. Glaser, JD, told Orthopedics Today that he has seen a need for this sort of service in the past. Though he could not say if he was sure that the AMA program would be the optimal solution, he considered it a step in the right direction.

“There are other ways that one could do it, but something like it is definitely needed,” he said. “One of the things that has struck me in terms of the changes I have seen in the 17 years since I started practicing law … when I started off I used to read provider agreements all the time. I now never review them.

“I would like to think that is because clinics have become adept at doing it themselves, but in fact what I have learned is I think a lot of physicians do not read them at all,” he added. “They just sign them.”

A number of functions

Though the AMA stressed in a release that the NMCC is not designed to take the place of competent, individualized legal advice, the system aims to help physicians with managed care contracts in a number of ways, including:

• providing alternative language to support contract negotiations;
• ensuring managed care contracts and organizations comply with applicable state legal requirements;
• clarifying key contract issues and managing ongoing relationships with managed care organizations;
• assisting with legislative, regulatory and legal efforts to reform unfair practices; and
• monitoring emerging state and federal legislative and regulatory trends.

Read agreements carefully

Glaser said the problems inherent in not being able or willing to fully read or understand a contract could be large for physicians, depending on what an organization includes.

“There are often things buried in there that can have a significant impact on a practice, and sometimes nobody is paying tremendous attention to it,” he said. “The contract might have some term in it that says if you hire a new physician … it used to be that you could retroactively get credentialing for that physician. A lot of the contracts now say you cannot. It sounds to me like this will help point out some of those terms. It is not entirely clear to me that it will, but if it does something like that it is wonderful,” he added.

“Interesting challenges”

Glaser added that even though the system being put in place should help physicians, there are still some hurdles and limits to keep in mind.

“There are some interesting challenges that come up whenever you try to help physicians en masse with something like this, and the biggest one is anti-trust,” he said. “There are limits as to how much you can jointly negotiate for physicians.”

Still, Glaser said, the benefits of the service could be welcome.

“Physicians are always going to benefit from having expertise, be it legal or consulting,” he said. “It is hard enough to practice medicine; I think practicing medicine and understanding everything there is to know about contracts is going to be a perpetual challenge.” – by Robert Press

A note from the editors

For more on medicolegal issues affecting orthopedic surgeons, read David Glaser’s blog.

• David M. Glaser, JD, can be reached at dglaser@fredlaw.com.

Ramon Jimenez

I believe that this new program being offered by the AMA is laudable. I have to agree with Mr. Glaser in his observation that today’s physician has neither the time nor the desire to review every contract ... they just sign it. We have been fortunate in California in that the CMA has offered this service for the past few years. I am not familiar with the numbers on how many physicians have participated. I believe that the NMCC program is another tool that a physician can utilize as he or she negotiates their way through the onslaught of paper, regulations, and policies. If it can prevent one physician from getting into serious trouble, it would be well worth it. Overall any and every program that will benefit and facilitate us to render good care to our patients is a positive thing.

— Ramon Jimenez, MD
Orthopedics Today Editorial Board Member