News and Commentary

Aetna, AMA Row Over Florida Contracts; HMO Faces Legal Trouble in Rhode Island

December was like a bad dream for Aetna U.S. Healthcare. The AMA raised a public stink against the nation's largest for-profit HMO over its physician contracts in Florida. The same week, Rhode Island cracked down over a physician shortage. And, if this were not enough, a physician revolt in Texas against AUSHC widened.

Actually, the HMO's nightmare started, appropriately, on Halloween. That day, the AMA fired off a scathing 11-page letter to AUSHC, charging that its Florida contracts use vague language allowing it to override a physician's determination of medical necessity and giving the insurer authority to change contract terms retroactively, without notice.

"Six states' medical societies contacted us about contractual problems, but the Florida Medical Association received a memo from AUSHC stating it refused to negotiate or discuss the situation," says William Mahood, M.D., a trustee of the AMA. AUSHC denies its doctors in Florida or elsewhere are forced to accept unilateral terms, and says it is reviewing contracts to modify language that can be construed in such a way.

The HMO also disagrees with the AMA on the issue of medical necessity, saying it merely follows practices that are standard throughout the managed care industry. Mahood agrees that other health plans second-guess physician decisions, but says "the inability of physicians to appeal is language we find really disturbing" in Florida contracts.

These are not the smoothest of times for the Blue Bell, Pa.-based HMO. The AMA action ignited the biggest in a series of grass fires that seem to pop up continually around AUSHC. Another flared in Rhode Island, where the HMO is in legal trouble over lack of physicians.

Though officially it neither confirms nor denies problems in the Ocean State, AUSHC accepted a 30-page list of deficiencies when it signed a consent agreement with the state health department on Dec. 3. The trouble started in October, when a group of 80 primary care doctors pulled out of the HMO — touching off a probe into whether it had enough physicians to meet state requirements for access.

The agreement requires the HMO to submit a plan of corrective action. That plan will include a provision that care will be delivered through non-plan physicians to any member who cannot find an AUSHC doctor close to home. The insurer also agreed to a $10,000 fine and 12 months' probation.

Physician abandonment of AUSHC is also a problem in Texas, where the issue is cuts in payment. Seventy-five specialists in Specialty Net, near Fort Worth, bolted Nov. 22.

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