Merritt Personal Lines Manual: Criticisms of HMOs and Gag Clauses
HMO coverage can be quite restrictive and many people don't learn the details of their plans until they have a medical problem. Many critics question whether managed care has been stretching its method of cost curbing too far. Among other things, managed care is criticized for depleting funds for scientists and medical schools, proposing "gag" rules to restrict treatment discussions between doctors and patients and offering financial incentives to its staff for curtailing medical costs.
In the mid-1990s, the American Medical Association called on all managed care plans to cancel "gag" clauses in their contracts or policies with physicians. A few months later, the American Association of Health Plans (AAHP), a national trade group based in Washington, D.C., that represents roughly 1,000 managed care plans, announced its adoption of a similar program to urge the strengthening of the patient-physician relationship.
The so-called "gag" rules, outlined in a physician's contract, are a way for managed care organizations to discourage discussion between physicians and patients regarding treatment options that managed care organizations do not want to cover (usually more expensive and non-traditional methods of treatment). The rules initially were intended to prevent the physician from criticizing the managed care organization.
But gag orders didn't stop the criticism, especially from outside sources, like consumer advocacy groups. In some cases, managed care organizations have been criticized for offering incentives such as bonuses, to physicians to curtail medical costs. These financial incentives were used to determine the type of treatment or tests the doctors either recommended or avoided. In other cases, managed care organizations required a second opinion from another physician before they would dole out the money for coverage.
To help protect patients, lawmakers in a number of states have unveiled provisions to guarantee broad protections for managed care enrollees. Under the bipartisan legislation, managed care plans would be required to provide safeguards to enrollees by addressing such issues as clinical decision making, access to personnel and facilities, choice of provider, grievance procedures and quality of care based on clinical outcomes.
And, public sentiment has put pressure on HMOs to change some of their policies. For example, many HMOs have changed their policies regarding mastectomies. Believe it or not, a few managed-care providers actually had decided that a mastectomy should be treated on an outpatient basis only.
In response to tremendous criticism, the AAHP's board of directors issued a statement saying, "The decision about whether outpatient or inpatient care best meets the needs of a woman undergoing removal of a breast should be made by the woman's physician after consultation with the patient."
The group also stated that health plans do not and should not require outpatient care for a mastectomy and that physicians should make medical decisions based on the "best available scientific information" and the individual needs of each patient.
An FHP International Corp. spokesman compared the so-called "drive-through mastectomy" to the "drive-through delivery" issue dealt with in 1995. Some HMOs had placed strict limitations on the amount of time a mother could stay in the hospital after giving birth. The drive-through delivery debate resulted in a federal law mandating that new mothers have the option to stay in the hospital for 48 hours after delivery.
Most plans now cover at least one night's hospital stay for patients undergoing mastectomies.
