HMO profits jumped 60% in first-quarter 2003, rating agency reports, -AND- Physicians: Watch Out for Abusive Clauses in Managed Care Contracts

[CAL/AAEM News Service]

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AHA NEWS NOW

The Daily Report for Health Care Executives

www.ahanews.com

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Tuesday, Jan. 20, 2004

1) HMO profits jumped 60% in first-quarter 2003, rating agency reports

The nation's HMOs recorded a $2.3 billion profit for the first three months of 2003, a 60% increase over first-quarter 2002, rating agency Weiss Ratings Inc. reported today. In addition, the number of HMOs earning a profit climbed to 80.2% from 61.6% in 2001, Weiss said. The analysis is based on 451 HMOs rated by Weiss, including Medicare HMOs. "HMOs continue to thrive as a result of ongoing premium increases and effective cost-cutting measures," said Melissa Gannon, Weiss vice president. She said she expects the rate hikes to eventually wane, giving consumers "some much needed relief." For more, see the announcement at http://www.weissratings.com/News/Ins_HMO/.

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Copyright 2004 by the American Hospital Association. All rights reserved. For republication rights, contact Craig Webb. AHA News is a registered trademark of the American Hospital Association. The opinions expressed in AHA News Now are not necessarily those of the American Hospital Association.

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-----Original Message-----

From: cma_alert@cmanews.org [mailto:cma_alert@cmanews.org] 

Sent: Thursday, January 29, 2004 2:58 PM

1. Physicians: Watch Out for Abusive Clauses in Managed Care Contracts

Physicians should vigilantly check any managed care contract before signing it to ensure that it does not contain improper or otherwise abusive conditions. In particular, physicians should beware of contract terms that bind them to lengthy contractual periods. 

For example, some contracts require physicians to notify a health plan of their intent to terminate a contract at least 120 days prior to the anniversary date of the agreement and also require the physician to continue providing care under the agreement for at least 60 days after the anniversary date. If you signed such a contract, you would be obligated to provide care under the terms of the agreement for a total of 5 months after sending a timely notice of termination. If you missed the 4-month preanniversary notice deadline, you would be bound for more than a year. 

CMA urges physicians to negotiate such clauses out of any contract before signing. If you have already signed a contract containing such terms, CMA attorneys believe that you still have the right to terminate the contract, if the payor has breached the contract by, for example, failing to pay claims in accordance with the terms of the agreement. (CMA legal counsel believes this to be true even if the contract does not contain a termination-for-cause clause.)

For more information, visit CMA's ON-CALL library, which contains thousands of pages of medicolegal, regulatory, and reimbursement information. ON-CALL documents are available free to members at CMA's members-only website <http://www.cmanet.org/logon> . Nonmembers can purchase ON-CALL documents for $2 per page at the <http://www.cmanet.org/bookstore> CMA Bookstore. For step by step instructions on how to access the ON-CALL system, click here <http://www.calphys.org/html/bb483.asp> . 



Brian Potts 
Managing Editor, CAL/AAEM News Service 
MS-IV, UC-Irvine

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<DIV><FONT size=2>
<P>===============================</P>
<P>AHA NEWS NOW</P>
<P>The Daily Report for Health Care Executives</P>
<P></FONT><A href="http://us.f413.mail.yahoo.com/ym/www.ahanews.com"><U><FONT color=#0000ff size=2>www.ahanews.com</U></FONT></A></P><FONT size=2>
<P>===================================</P>
<P>Tuesday, Jan. 20, 2004</P>
<P>1) HMO profits jumped 60% in first-quarter 2003, rating agency reports</P>
<P>The nation's HMOs recorded a $2.3 billion profit for the first three months of 2003, a 60% increase over first-quarter 2002, rating agency Weiss Ratings Inc. reported today. In addition, the number of HMOs earning a profit climbed to 80.2% from 61.6% in 2001, Weiss said. The analysis is based on 451 HMOs rated by Weiss, including Medicare HMOs. "HMOs continue to thrive as a result of ongoing premium increases and effective cost-cutting measures," said Melissa Gannon, Weiss vice president. She said she expects the rate hikes to eventually wane, giving consumers "some much needed relief." For more, see the announcement at </FONT><A href="http://www.weissratings.com/News/Ins_HMO/"><U><FONT color=#0000ff size=2>http://www.weissratings.com/News/Ins_HMO/</U></FONT></A><FONT size=2>.</P>
<P>==================================</P>
<P>Copyright 2004 by the American Hospital Association. All rights reserved. For republication rights, contact Craig Webb. AHA News is a registered trademark of the American Hospital Association. The opinions expressed in AHA News Now are not necessarily those of the American Hospital Association.<FONT size=2></P>
<P>===================================================</P>
<P>-----Original Message-----</P>
<P>From: cma_alert@cmanews.org [</FONT><A href="mailto:cma_alert@cmanews.org"><U><FONT color=#0000ff size=2>mailto:cma_alert@cmanews.org</U></FONT></A><FONT size=2>] </P>
<P>Sent: Thursday, January 29, 2004 2:58 PM</P>
<P>1. Physicians: Watch Out for Abusive Clauses in Managed Care Contracts</P>
<P>Physicians should vigilantly check any managed care contract before signing it to ensure that it does not contain improper or otherwise abusive conditions. In particular, physicians should beware of contract terms that bind them to lengthy contractual periods. </P>
<P>For example, some contracts require physicians to notify a health plan of their intent to terminate a contract at least 120 days prior to the anniversary date of the agreement and also require the physician to continue providing care under the agreement for at least 60 days after the anniversary date. If you signed such a contract, you would be obligated to provide care under the terms of the agreement for a total of 5 months after sending a timely notice of termination. If you missed the 4-month preanniversary notice deadline, you would be bound for more than a year. </P>
<P>CMA urges physicians to negotiate such clauses out of any contract before signing. If you have already signed a contract containing such terms, CMA attorneys believe that you still have the right to terminate the contract, if the payor has breached the contract by, for example, failing to pay claims in accordance with the terms of the agreement. (CMA legal counsel believes this to be true even if the contract does not contain a termination-for-cause clause.)</P>
<P>For more information, visit CMA's ON-CALL library, which contains thousands of pages of medicolegal, regulatory, and reimbursement information. ON-CALL documents are available free to members at CMA's members-only website &lt;</FONT><A href="http://www.cmanet.org/logon"><U><FONT color=#0000ff size=2>http://www.cmanet.org/logon</U></FONT></A><FONT size=2>&gt; . Nonmembers can purchase ON-CALL documents for $2 per page at the &lt;</FONT><A href="http://www.cmanet.org/bookstore"><U><FONT color=#0000ff size=2>http://www.cmanet.org/bookstore</U></FONT></A><FONT size=2>&gt; CMA Bookstore. For step by step instructions on how to access the ON-CALL system, click here &lt;</FONT><A href="http://www.calphys.org/html/bb483.asp"><U><FONT color=#0000ff size=2>http://www.calphys.org/html/bb483.asp</U></FONT></A><FONT size=2>&gt; . </P></FONT></FONT></DIV><BR><BR><STRONG>Brian Potts <BR>Managing Editor, CAL/AAEM News Service</STRONG> <BR>MS-IV, UC-Irvine<p><hr SIZE=1>
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