Why Some Doctor Groups Favor No-Cause Terminations

Medical Economics, January 12, 1998 | Go to article overview

Why Some Doctor Groups Favor No-Cause Terminations


None of the state due-process laws apply to medical groups and IPAs that take fullrisk or full-professional-risk capitation from health plans. And that's only fair, say their administrators, because the groups and IPAs can't survive if their ability to control costs is restricted.

But a voluntary agreement between the Colorado Medical Society and the state HMO association does cover risk-taking organizations. And the Potvin court decision in California, which punched a hole in health plans' contractual right to terminate doctors without cause, could be interpreted as covering groups and IPAs. too.

This is a critical issue in California, where IPAs deselect far more physicians than HMOs do. In the past, says pediatrician and allergist Brian Greenberg of Tarzana. Calif., IPAs usually deselected physicians either for overutilization or for deficiencies of care. Rather than face a lawsuit. the organizations tended to drop doctors without cause, just as HMOs do.

Medical groups, which often contract with outside specialists, typically stop referring to those they deem cost-inefficient or procedurehappy. But some groups are owned by a minority of their physicians, which makes the rest of them independent contractors. Those practices face the same quandary as IPAs do when it comes to terminating physicians.

Since these trends are starting to spread beyond California, it's not surprising that the American Medical Group Association and two national IPA associations have filed an amicus curiae letter in the appeal of the Potvin ruling to the California Supreme Court. They want the court either to nullify Potvin or clarify whether it covers IPAs and groups.

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