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State Legislatures Move To Ban 'Gag Rules' Imposed on Physicians

MANAGED CARE July 1996. © MediMedia USA
State Initiatives

State Legislatures Move To Ban 'Gag Rules' Imposed on Physicians

MANAGED CARE July 1996. ©1996 Stezzi Communications

Use of so-called "gag rules" by managed care plans is under attack in many states. Bills to ban these rules — which prevent physicians from discussing treatment options, payment policies and other plan provisions with patients — have been introduced in at least 24 states this year, says Anne Markus of George Washington University's Intergovernmental Health Policy Project. Physician groups seek to ban these rules because, they argue, gag orders interfere with the doctor-patient relationship, stifling the ability of physicians to:

  • discuss treatment options a plan does not offer with patients,
  • make referrals, and
  • reveal the terms of capitation agreements.

Doctors who ignore these orders invite termination of a managed care contract.

So far this year, 11 states have enacted gag-rule bans, says Marcus. They are Colorado, Georgia, Indiana, Maine, Maryland, Massachusetts, New Hampshire, Tennessee, Vermont, Virginia and Washington. More states are expected to move in this direction, she adds.

"If other states with bills banning these rules don't enact their measures this year, the legislative push for passage will continue next year,'' Marcus predicts.

In California, an initiative to outlaw gag rules will be on the ballot in November as part of a pair of larger patient-protection measures.

That initiative would not allow any health care business to prohibit licensed or certified caregivers from giving patients any information the caregiver determines to be relevant to the patients' health care.

Moreover, the California legislature's Assembly has already passed a bill with the same effect as the ballot measure, and the Senate is expected to do likewise. The bill has broad bipartisan support.

For its part, says Don White of the American Association of Health Plans, the managed care community is committed to unrestricted communication between physicians and patients concerning diagnosis, treatment and other information that affects patient care.

But it opposes efforts that would result in disclosure of proprietary contractual information. Physicians should not be given the right to reveal publicly the exact reimbursement they receive, says AAHP.

Above all, physicians contend that gag rules put them in a difficult position, making it hard to fulfill their ethical duty to disclose pertinent treatment information to patients.

Florida Gov. Lawton Chiles has vetoed a bill that would have allowed patients to sue their HMOs more easily in cases where medical care is denied. Florida would have been the first state to allow enrollees to sue for compensatory and punitive damages as well as legal fees when an HMO denies payment for a treatment ordered by any doctor.

The measure, HB 1853, was supported by trial lawyers, but business groups opposed it. "The business community, which pays most of the costs for privately funded health insurance, has never agreed to this bill," said Jon Shebel, president and CEO of the Associated Industries of Florida.

The governor, a Democrat, said the bill "would encourage a return to the era of 'defensive medicine' that helped to spur sharp increases in health care costs during the 1980s."

He speculated that doctors would have an incentive to authorize services and would do so "whenever there was a doubt about the need or efficacy" of a treatment.

"The tendency in most cases would be to require the HMO to pay for the service, regardless of cost," resulting in "erosion of the ability to perform utilization management."

— Joan Szabo

Meetings

HealthIMPACT Southeast Tampa, FL January 23, 2015