HMOs Absorb Another Blow

In April, the U.S. Supreme Court refused to overturn an "any willing provider" law in Kentucky.  "Any  willing provider" laws require health plans to include on their panels any doctor or pharmacist meeting the plans' criteria.  Both patients and doctors like such laws, because it allows patients to switch health plans without having to switch doctors, as long as that doctor is willing to participate in the patient's new plan and meets that plan's qualifications - thus eliminating a major complaint patients have have against HMOs.

That HMOs don't like "any willing provider" rules is illustrated by the fact that they fought it all the way to the Supreme Court.

DrRich comments:

Last month's unanimous Supreme Court ruling is a blow to HMOs for two reasons.  First, by allowing Kentucky's "any willing provider" rule to stand, the Court has taken away from HMOs one of their major weapons for pummeling doctors into submission, that is, the ability to determine arbitrarily which doctors can participate.  The ability to include or exclude doctors is a major tool for controlling physicians' behavior.  It gives health plans the leverage they need to make sure the doctors work to please those plans at least as hard as they work to please their patients.

Second, last month's ruling indicates that federal ERISA statutes (the Employee Retirement Income Security Act of 1974) no longer shield HMOs from state laws.  States can, apparently, now pass laws to protect patients and their doctors from health plans - and the Court appears to be in no mood to overturn such laws.

While doctors and patients in Kentucky are celebrating, the state's health plans are "saddened," and suggest that any celebration may be premature.  A spokesperson for the state's health plans says the result of this ruling will be increased insurance premiums, causing more of the state's employers to drop coverage.  This assessment is no doubt true, as if they can less effectively intimidate doctors into cutting costs by withholding care, they will have to charge more.  And we will have made yet another revolution in our circling of the drain.

May, 2003

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