Substantial savings are often realized through use of a Medical Provider Network (MPN), especially if the MPN offers the highest quality of medical providers. Since the creation of MPNs, we have seen our share of “problematic” doctors. Some physicians have a reputation for recommending surgery for every work comp patient they see, while others are known to keep injured workers on disability for prolonged periods of time. It’s almost impossible to obtain a light duty release from these doctors, let alone an MMI report. When an MMI report is finally issued, an unusually high permanent disability rating is often identified. By the time a claims administrator realizes they have a “bad apple” in their MPN, it is usually too late to do anything about it. By then word has spread among applicant attorneys who quickly transfer clients to the newly discovered liberal doctor. What is a claims administrator to do?
In the early days of MPN, one particular insurance company decided to just terminate problem physicians from their network. That strategy backfired when one terminated doctor filed a lawsuit alleging that the insurer was depriving him of a livelihood. He alleged that his termination from the network and subsequent loss of business were caused by a biased claims adjuster who simply wanted him out of the network. Based on this one adjuster’s recommendation, the doctor was removed from the MPN, resulting in a substantial monetary loss to him. This physician eventually won the suit, sending a huge wake-up call to the claims industry. Since then, employers and administrators have implemented mandatory protocols and procedures before removing a physician from their MPN, including the issuance of warnings and soliciting rebuttal commentary from the provider. The bottom line is that it now takes months to remove a physician from an MPN, and only after first gathering a tremendous amount of supporting evidence.
Recently, a major insurance company came up with a novel idea to quickly and efficiently deal with questionable physicians while simultaneously protecting itself from civil liability. Every year it creates and implements a new MPN which “problem” physicians are not invited to join. Once the new MPN is activated, any doctor not on the list automatically becomes an out-of-network physician and is no longer authorized by the insurance company to treat its injured workers. Note the subtle but important difference in what this insurance company is doing. It did not specifically terminate any physician off its MPN. Instead, it created and adopted a new MPN that omitted certain physicians. The omitted physicians are still members of the original MPN. It’s just that the insurance company no longer uses that network.
Will the insurance company end up being sued over this novel tactic? The legality of the above-described practice has not yet been decided in a court of law. Therefore, we urge administrators to proceed with caution whenever removing physicians from their MPN, as such action often results in a significant financial impact on the doctor’s bottom line and possible legal consequences for the claims administrator.