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Clinical Laboratories and Pathology Groups

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Update on United HealthCare’s Plan to Fine Physicians for Using Out-of-Network Labs

Apparently physicians in several states besides New Jersey are catching the attention of their insurance regulators over UnitedHealthcare’s effort to fine doctors who continue to use out-of-network laboratories. Now, state authorities in Texas, Connecticut, Iowa, Florida, and California have joined New Jersey state regulators by announcing plans to review the legality of the $50 fine announced by United Healthcare for doctor’s who refer their patients to out-of-network laboratories.

In March, the California Medical Association said that this new policy illegally interferes with PPO patients’ right to access out-of-network benefits and improperly obstructs the physician-patient relationship. “Patients have the right to decide where to receive health care services, without having to worry that their physicians are being fined or otherwise penalized for their choices. This right is particularly acute for patients who pay premiums for nonexclusive PPO benefits,” wrote CMA chief legal counsel Catherine Hanson. “And physicians have the right to speak freely with their patients about their health care choices, without having to worry that they will be fined or otherwise penalized should their patients choose an out-of-network option.”

The Florida Medical Association initially asked United Healthcare to take the policy out of its protocols with physicians, but now simply says “We’re confident United is going to be working with physicians not to charge that $50,” said Lisette Gonzales-Mariner, FMA spokeswoman.

United Healthcare spokesman Roger Rollman said that the policy was for “worst-case scenarios” and that fines would not be imposed the first couple of times a doctor didn’t abide by the policy.

American Medical Association spokesman Robert Mills said, “I think, while others [insurers] may have protocols that talk of out-of-network labs, I don’t believe any other insurers are using the stick approach versus the carrot.”

It is not difficult to see that United Healthcare is receiving significant bad press from the medical community on the $50 fine for doctors with patients that use out-of-network labs. This decision has triggered growing concern among doctors, who are worried that they can be made responsible for the actions of their patients. The American Association of Family Physicians has clarified United Healthcare’s new lab protocol and outlined how and when fines can be dispensed, trying to put physicians at ease.

However, it is important to remember that, as part of the 10-year exclusive national lab services contract between UnitedHealth and Laboratory Corporation of America, UnitedHealth has a commitment to take active steps to enforce compliance by its physicians with the laboratory services network. It is believed that the financial benefits to UnitedHealth from this exclusive national lab services contract are significant enough to motivate it to continue its tough stance. What remains to be seen is whether the bad press and negative impact on relationships built with state medical associations will do lasting harm to the long term relationship between UnitedHealth and its physician panel.
Related Articles:

CMA Calls United Healthcare’s New Lab Policy Illegal and Ill-Advised

Doctors upset over insurer’s new policy

AAFP Clarifies UnitedHealthcare’s New Lab Protocol