By Amin H. Karim MD
PRE MANAGED CARE ERA:
When I started solo cardiology practice in 1987, not much was heard about Managed Care in general. There was MediCare, Medicaid (Federal program for people below poverty line: patients did not have to pay anything to any provider) and then there was INDEMNITY insurance like BC BS and others which paid the provider for whatever health care service was needed on the basis of usual and customary charges. Many physicians, even in those days did not participate in MediCaid and this situation persists even today. However, there already was PruCare which was a plan of the Prudential Insurance Co and there was only one provider group called the Macgregor Clinic which held their contract. I learned for the first time what an HMO ( Health Management Organization) was; MacGregor had a HMPO contract with them meaning they were paid a fixed amount per patient and they managed the patients in that budget. Another name we heard was NYLCARE by the New York Life Insurance. We heard that they denied tests and were nicknamed DENIAL CARE! 🙂
THE ARRIVAL
But the age of Managed Care had arrived. Now we had managed care companies that you had to become a member of to see their patients. That meant more paper work and several page agreements that we rarely read; it had the payment schedule as to how much we would be paid for visits and procedures and they were usually lower than what the INDEMNITY insurance.
Most physicians and groups gladly signed up for them; the attraction for them was that they would be listed on the panel of those companies which would therefore give them popularity and a chance to get referrals from PCPs. Little did they realize that in signing up with them they were agreeing to their pre determined rates and could not collect any difference from the patients other than deductibles and co-pays. They would later learn that once signed up and tied to the patient volume offered by these companies, the rates would keep coming down year after year till they would become close to or even lower what MediCare paid! Now if they resigned they would lose all the volume of patients. The larger group had the wherewithal to negotiate better rates but the small groups and solos simply accepted their fate. This situation persists even today and Managed Care companies now rule the roost, requiring pre-authorizations for every procedure done in the clinic. Soon Medicare Advantage Plans would start taking over traditional Medicare from patients with promises of providing them with dental and eye coverage etc. Little do patient realize that they are giving up their freedom to choose the doctor or hospital. Fast forward from early 2000 to the 2023, these plans have grown too big for their breeches now: See the news report from November 27 2023:
Congress Increasing Scrutiny Of Medicare Advantage Plans’ Care Denials, Prior Authorization
Politico (11/24, King) reported, “More than 30 million older Americans are enrolled in Medicare Advantage plans, wooed by lower premiums and more benefits than traditional Medicare offers.” However, “a bipartisan group of lawmakers is increasingly concerned that insurance companies are preying on seniors, and, in some cases, denying care that would otherwise be approved by traditional Medicare.” Congressional “scrutiny of these care denials…could have a far greater impact and reshape the rules for one of the most profitable parts of the insurance industry.” Additionally, “many physicians complain that balance has tipped too far in favor of Medicare Advantage plans.”
These and other insurance barriers have resulted over the years to increase the practice costs for the solo physician, while salaries and rents have continued to increase steadily in keeping with inflation. One or two people have to be hired to do ” pre-authorizations” for procedures, sometimes denied till the physician does a “peer to peer” review with their designated physician, often not in the same specialty.
INDEPENDENT PRACTICE ORGANIZATIONS:
One entity that came to the rescue of solo and small practices was the start of Physician Practice Organizations, established with the help of hospital systems; joining these provided a mechanism to negotiate payments from HMOs and PPOs as well as not having to filling forms for each company separately at times of renewal.
I joined the following:
Cardiovascular Care Providers
St. Luke’s Independent Practice Association
Methodist IPA.
Gulf Coast IPA
Twelve Oaks IPA
The last three are closed now. The first two have been very helpful in keeping our contracts.
GlobeMedic 