Tuesday, August 4, 2015

Rules of the Game

Texas basically started the medical provider network trend and there are many states that have modeled their systems, albeit with notable differences, on the Texas network style.

But a recent case out of the 5th District Court of Appeals in Texas may alarm physicians and other medical providers in networks, because in private contractual settings a doctor is not free to express his opinion, and certainly not in his chart notes, nor encourage patients to take legal action against the network or the underlying carrier.

Dr. John C. McConnell, is a board-certified orthopedic surgeon since 1987 who got his medical degree from the University of Texas Southwestern Medical School in Dallas, completed a residency in orthopedic surgery at the University of Tennessee and a fellowship at Tufts University of Medicine in Boston.

He thought he was advocating for his patients when he made deleterious notes in patient charts, stating in one that he believed Liberty Mutual Insurance Company was acting in bad faith, and that "inappropriate (`bad faith') denials on the part of work comp carriers in Texas are unfortunately endemic."

In another chart McConnell wrote that he believed that most carriers engage in a "3-D (delay/denial/dispute of care) business strategy," supported by the "opinions of a network of physicians from whom carriers can obtain whatever opinions they want.”

Liberty didn't like these comments so it told the network manager, Coventry Health (which is now part of Aetna) to terminate McConnell from its network.

After the termination McConnell sued on various legal theories, all based in tort but not in contract.

Likely that's because there was no actual breach of contract.

Regardless, the trial judge threw the case out.

And last week the 5th DCA upheld the trial judge.

The court said that generally, "conduct pursuant to a valid contract can not be said to be independently tortious or wrongful" and that the evidence showed "the conduct McConnell complains about was based on Coventry’s exercise of its legal rights under its contract with McConnell."

Liberty also "did exactly what its contract with Coventry allowed it to do," the court said, and McConnell had not properly presented a breach-of-contract claim to the trial judge.

Texas Department of Insurance, which governs the state's workers' compensation system, reports that physicians are vacating it.

In 2000, there were 17,318 doctors participating in the Texas system, representing about 57% of the physician population in the state. By 2013, according to the Department, the number of doctors in the comp system had dropped to 16,906 – even though the total number of doctors in the state had continued to rise at an average of 3% per year – leaving only 40% of the state's doctors were treating injured workers as of 2013.

Cases like McConnell's may explain this trend.

According to McConnell's appellate brief, in the two years before one of his patients sued Liberty Mutual for bad faith, Coventry received only one complaint concerning McConnell from all of its payers. But after the patient's bad-faith suit was filed, Coventry received 10 new complaints from Liberty in nine months.

What Liberty and Coventry were telling McConnell, and other physicians in its networks, is don't encourage patients to sue the carrier and its agents for bad faith (which has virtually no chance of success in Texas any longer anyhow).

And the message to McConnell's patients, and others similarly situated, is don't complain when someone else is paying your medical bill.

Until there's some legislative adjustment, those are the rules of the game.

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