Out of network, out of luck: The perils of breaking the tie

If you think dropping a health plan means the hassles are over, think again. Insurers are coming up with ways to make life difficult for you so you'll come back to them.

By Robert Kazel, AMNews staff. May 16, 2005.

Many physicians undoubtedly would love to leave managed care networks and not look back.

But these days, it might be a good idea to survey the road ahead before deciding against renewing a contract. Increasingly, insurers are using payment policies to make out-of-network doctors' lives more difficult, and those medical groups that opt to take the "non-par" path may well find that freedom carries a high price tag, extra time and work, and added exasperation.

Some plans have used these pressure tactics for years, but others are just starting to get more aggressive. Insurers say using sticks as well as carrots to make networks look attractive is fair business strategy. Doctors, on the other hand, argue that putting the squeeze on nonparticipating medical groups winds up using patients as a wedge in contract disputes -- an approach they say is coercive and shortsighted.

Jim Palombaro, MD, an emergency physician in Raleigh, N.C., experienced déjà vu in March when he read a letter from UnitedHealthcare to his medical group. United said it would stop paying reimbursements directly to physicians who weren't in its network. Checks would be mailed directly to those doctors' patients, with the patients as payees.

Because the 46 doctors who constitute Wake Emergency Physicians didn't have a contract with United, Dr. Palombaro knew United's new procedures would spell trouble for the group, of which he is the president. In the past year, the group had grappled with those same problems with BlueCross BlueShield of North Carolina. The doctors, unhappy with what the Blues plan wanted to pay, dropped out of that network in April 2004. Immediately, the plan began sending checks to patients.