Harris Methodist Health Plan will pay back $3.4 million to physicians who were penalized or who lost bonuses under the North Texas HMO's now-defunct pharmacy reimbursement policy. The plan, which has 325,000 members, also will pay a $100,000 fine to the state and pay up to $50,000 to the Texas Insurance Department for consulting help in rewriting its contracts with physicians.
The payments are part of a consent agreement that will settle a lawsuit filed against Harris in April. Of the $3.4 million, $2.6 million will go to physicians who exceeded their prescription drug budgets and $725,000 will go to physicians who lost bonuses when they failed to meet plan targets for spending on prescriptions, specialists and hospital care.
The settlement is the first penalty imposed under a state law that prohibits HMOs from using financial incentives that reward physicians for limiting medically necessary care.
The 6,000 physicians who work with Harris will receive new contracts starting this month. The plan expects it to take two to three months to distribute all of the new contracts. Physicians will then have 60 days to sign if they wish to continue in the Harris network. The newly offered deal limits bonuses tied to financial performance to 10 percent of a physician's base salary, and does not impose penalties for missing budget targets.
The Texas Department of Insurance is investigating other health plans, which it declined to identify, to see if they are improperly using financial incentives to limit medically needed care.