New York doctors sue health plan over "all products" policy

Physicians say that the requirement tying them into two networks is not only illegal but bad for patient care.

By Amy Lynn Sorrel, AMNews staff. Oct. 16, 2006.

New York doctors filed a class-action lawsuit to fight a "take it or leave it" policy that Oxford Health Plans and UnitedHealthcare mandated. Doctors accuse the plans of illegally coercing them to participate in their networks.

The lawsuit underscores doctors' growing concerns about the burden such restrictions place on patient care. Physicians say that health plan mergers are reducing choices for patients and create unfair business practices for doctors.

UnitedHealthcare and Oxford merged in July 2004 and last year told New York doctors that if they wanted to stay in, or join, one of the networks, they had to be in both. If doctors did not agree, their contracts would be cancelled under what is known as an "all-products" requirement.

The Medical Society of the State of New York and 11 individual doctors allege that the rules violate state antitrust laws by illegally tying the two plans together and forcing doctors to contract with an inferior plan that imposes low reimbursement rates or inadequate coverage of services. If they don't accept the terms, doctors say they risk losing a number of patients, whose care also will be disrupted if their doctors are dropped and they have to find another doctor.

The health plans "are using their economic clout in one product to force doctors to take a product that they otherwise would not if it weren't for that market power," said Donald Moy, MSSNY general counsel.

The lawsuit filed on Sept. 14 in a Manhattan trial court also alleges that UnitedHealthcare and Oxford are breaching their contracts with doctors by imposing the new requirement and infringing on the physician-patient relationship.