In one state, United suspends new lab protocol

New Jersey physicians will not face possible penalties if patients use out-of-network lab services while regulators review the program.

By Bob Cook, AMNews staff. March 26, 2007.

UnitedHealth Group's new laboratory services protocols, which threaten sanctions on physicians whose patients are referred to out-of-network facilities, has run into a roadblock.

United has complied with a request by New Jersey's state insurance regulator, the Dept. of Banking and Insurance, to suspend its new protocols in that state, United spokesman Tyler Mason said. In a statement, the department said it wanted to review United's program because it was "not satisfied with the legality of these protocols." The regulator did not say when its review would be completed.

The protocols, rolled out nationwide as of March 1, attempt to curb physician referrals to out-of-network labs. They state that doctors could be assessed a fine of $50 -- "the amount by which non-par laboratory claims exceed the cost of par laboratory claims, on average," according to United -- for each out-of-network referral. Physicians also could face a change in eligibility for quality-based pay and pay-for-performance programs, a decreased fee schedule or termination from the United network.

The protocols followed United's signing a 10-year exclusive deal with Laboratory Corp. of America to be the plan's exclusive national lab network. It is not unheard-of for large insurers to have exclusive deals with labs, but physicians say they haven't heard of a plan that tried to enforce that deal through doctor sanctions.

United has tried to assure physicians that it would assess any penalties infrequently, and not without talking with physicians first. "It will be applied rarely and with complete respect," Mason said.