MANAGED CARE: California High Court Will Look At Physician Deselection
A case scheduled to be heard by the California Supreme Court later this year will address the contentious issue of whether a managed care plan can deselect a physician from its panel without cause. American Medical News reports that the case of Louis E. Potvin, MD v. Metropolitan Life Insurance Co. focuses on Potvin, "who was terminated from MetLife's panel" in 1992 without explanation and "without being given an opportunity to respond." MetLife eventually told Potvin that his malpractice history -- which included one $713,000 settlement and three dismissed cases over 30 years -- was unacceptable. MetLife refused to discuss whether the dismissal was appropriate. A lower court agreed with Potvin last summer that "the health plan controlled such important economic interests that it could not separate him from those interests without following fair procedures." American Medical News reports that the "decision essentially invalidated the concept of terminations without cause for medical providers, sending shock waves through a managed care community in California that had come to rely on deselection as a tool to adjust panel size and structure." At MetLife's request, the California Supreme Court is now charged with reviewing the decision, which if upheld "threatens the existence of termination-without-cause clauses for physicians in California and in any other state that looks there for precedent."
Although Potvin passed away in 1997, his estate has since pursued the case, rallying support from many organizations. The California Medical Association and the American Medical Association both "argue that physicians and their patients need notice and hearing rights to ensure that managed care organizations do not use termination-without-cause provisions to conceal deselections based on illegitimate reasons" such as patient care decisions. AMA Trustee Donald Palmisano noted, "[W]e believe that there should be fair play and due process before a physician can be deselected from a plan, because this harms patients and can destroy the physician's practice." In the 1997 appellate decision, the court noted "the state has fashioned protections for individuals whose livelihoods are dependent on public or private organizations such as unions ... and hospital medical staffs and medical societies."
Health Plans' Reasoning
MetLife has rallied the support of the California Association of Health Plans and the American Association of Health Plans, which "contend that any ruling affirming a physician's right to automatic hearing procedures would be an operational disaster" for its members. Health plans contend that such hearings would limit their ability to control the size of their panels and increase costs. American Medical News reports that while "[n]o one is predicting how the case will be resolved at this point, ... the California Supreme Court is more liberal than it has been in years past" (Klein, 2/23 issue).