UnitedHealth
Suspends Fines for New Jersey Doctors Who Continue to Use Quest
Diagnostics
Last
Friday brought an interesting twist to the question about whether
UnitedHealth would
follow through and fine doctors $50 for each of their patients
who had laboratory tests done at out-of-network laboratories,
effective March 1, 2007. The Associated Press published a news
story revealing that the New
Jersey Department of Banking had requested that UnitedHealth
suspend any attempts to fine physicians under this program, pending
its investigation in the situation.
The New Jersey Department of Banking said it was “not satisfied
with the legality of these protocols” in an article entitled
UnitedHealth
suspends MD fines in N.J.. The
American Medical Association has also expressed concerns about
the policy because physicians can't control where patients choose
to get their medical tests. The AMA also noted that this situation
is the first time a doctor could be financially punished for a
patient's behavior.
In response to the New Jersey Department of Banking and Insurance's
request, UnitedHealth spokesman Tyler Mason said the suspension
was voluntary and will be temporary. He added that the company
expects the review to be finished shortly and in a manner favorable
to the insurer.
New Jersey regulators are responding to the negative backlash
from doctors after UnitedHealth replaced Quest
Diagnostics with LabCorp
as their preferred laboratory for tests (see United
Health Disrupts the National Contract Status Quo Between the Two
Blood Brothers) effective January 1, 2007. Although the fine
policy has been on file since March 1, there has been no public
disclosure of whether or not UnitedHealth has actually exercised
their right to fine doctors as of this date.
New Jersey's action triggers some important new questions. If
New Jersey insurance regulators decide that UnitedHealth's policy
of fining physicians in this type of situation is illegal, will
this prove helpful to Quest Diagnostic's in its efforts to hang
on to as much UnitedHealth business as possible. Further, if New
Jersey insurance regulators determine that such a practice is
illegal, would other state insurance commissioners follow this
lead and make similar determinations? On the other hand, if UnitedHealth
prevails in its legal arguments in New Jersey, will this open
the door for other payers to copy UnitedHealth and begin fining
physicians whose patients end up getting testing done by out-of-network
laboratories?
This newest episode in the three-way contest between UnitedHealth,
LabCorp, and Quest Diagnostics demonstrates how the precedents
established in this new contractual relationship have the potential
to be copied by other national health insurance companies. Unfortunately,
many of these types of precedents prove detrimental to the interests
in independent lab companies and hospital outreach programs. Stayed
tuned for the next chapter in this fast-moving story.
Related Articles:
UnitedHealth
suspends MD fines in N.J.
P.S. Keep Dark Daily alerted to developments
in your own community. We welcome your news tips. Your local developments
help us develop regional and national patterns that can help your
laboratory develop effective strategies and responses to all of
these trends. Please forward your news to Robert (rmichel@darkreport.com)
or Sylvia (sylvia@darkreport.com).
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