The American Medical Association yesterday released its new Code of Conduct, a list of dos and don'ts that it says all health insurers should enforce.
The physician group says it hopes to publish a scorecard showing which plans play by these rules in a few years, in time for the launch of health exchanges enabled by health reform legislation.
As it released the new code, the AMA also sent letters to eight specific health insurance companies that it says have not had good track records in the past. They are Aetna, Cigna, Coventry Health Care, Health Net, Humana, Health Care Service Corp., UnitedHealth Group Inc and WellPoint.
"The decision to deal with these particular companies was not a random draw out of a hat," says AMA President J. James Rohack. "These companies were picked based on who has market dominance, and in particular, these companies were the ones that physicians had the most concerns over their past behaviors."
Rohack says that the code has been in the making for about 18 months, and "calls for transparency, so patients have the ability to choose insurers not only on the basis of price, but on the basis of the conduct toward their enrollees." A CD with resources will be distributed as well, to help physicians monitor each insurer's compliance with the code.
The AMA developed the code with support from 43 state medical associations and physician groups representing 19 types of specialized care, from the American Academy of Dermatology to the Renal Physicians Association.
In response, spokesman for America's Health Insurance Plans, Robert Zirkelbach, said, "Our top priority is ensuring patients have access to the safest and most effective healthcare treatments. All stakeholders need to work together to reduce gaps in care and the continued variation in practice patterns."
He added, "Health plans have pioneered innovative programs to reward quality, promote prevention and wellness, coordinate care for patients with chronic conditions, streamline administrative processes, and provide policyholders with greater peace of mind. We will continue to work with policymakers and other healthcare stakeholders to improve the quality, safety, and efficiency of our healthcare system."
The 10-point code includes 41 provisions, including:
1. Rescission and Cancellation. Health plans should not cancel plans "for innocent mistakes on applications, nor after significant delay," or for patients who become injured or severely ill after the policy is issued. Nor should plans pay bonuses or rewards for rescinding policies of sick consumers. Any cancellation must be subject to independent, outside review.
2. Premiums and Spending on Medical Services. Health plans must make profit and non-medical or administrative expenditures transparent to the public, and spend a "substantial bulk" of the premium dollar on direct medical care. They must price products fairly and give clear information on what's covered, copayments, coinsurance, and other information regarding the patient's financial responsibility.
3. Access. Provider directories must be accessible in paper and electronic format, including lists of which physicians, hospitals and other providers are accepting new patients, and which ones are restricted or out of network, or require other financial terms such as increased copayment.
4. Respectful Relations. Health plans must protect confidentiality of each enrollee's medical information, and "must cease such unfair practices with physicians as demanding unreasonable contract terms, improperly applying contractual discounts, unilaterally amending contracts or refusing to acknowledge contract terminations."
5. Medical Necessity. Health plans must cover all emergency screening and treatment services "without regard to prior authorization or the treating physician's or other healthcare provider's contractual relationship with the payer." Also, they may not use financial incentives that discourage doctors from recommending, prescribing, or rendering medically necessary care.
6. Benefit Management. Health plans will not change formularies or other benefits during the plan coverage year, and may not force physicians to change medications or treatments for patients who have been stabilized on a particular course of care, nor charge patients more for changes. "Financial incentives must not corrupt benefit decisions."
7. Administrative Simplification. Health plans must eliminate complexity and confusion from processes and communications. Also health insurers should minimize and streamline requirements they impose on patients and providers to provide information and approvals. "Health insurers must maintain sufficient staff and infrastructure to respond promptly."
8. Physician Profiling. Systems must be focused on improving quality, not on reducing cost, must use good relevant data and produce accurate, statistically valid results reflecting matters within the doctor's control, and must be appropriately risk-adjusted to account for patient variation.
9. Corporate Integrity. Policies prohibiting conflicts of interest, retaliation against whistleblowers and sharp business practices must be aggressively enforced.
10. Claims Processing. Health plans must pay claims accurately and timely and provide clear, comprehensive explanations of any denial or reduction of payment. Patients and physicians "must have a fair, fast, and cost-effective right to appeal any contested claim."
Several health plans sent statements in response to the AMA's release of its Code of Conduct.
Ross Blackstone, spokesman for HCSC, said, "We are aware of the contents and we do adhere to the code of conduct principles as outlined by the AMA. In fact, we have been doing so for quite some time."
Patrick Johnston, president of the California Association of Health Plans provided this response: "Partnerships between doctors and health plans in California are a national model in effectively and efficiently delivery care.
"Couple these effective partnerships with change required in federal health reform and the high standards California law establishes for health plans and the physicians with whom we work and we have addressed many concerns. Additionally, health plans established programs that streamline the administrative work of health care, help manage chronic conditions, and provide incentives for quality care."
Other health plans that received letters did not respond to requests for comment.
Rohack says that the AMA and the other physician groups want patients and providers to know up front which health plans are playing by these rules.
"It is frustrating to have to go through the court system to finally rectify wrongs, like the experience we had with the lawsuits that were filed against health insurers in 2000 for abuse of practices," he says. "They were finally settled six or seven years later."