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Health insurers are abruptly terminating anesthesiology contracts

February 27, 2020

Topics: Quote of the Day

By Jeff Lagasse
Healthcare Finance, February 27, 2020

Physician anesthesiologists are being forced out of network as insurance companies terminate their contracts, often with little or no notice, according to a new national survey from the American Society of Anesthesiologists.

Initial results find 42% of respondents had contracts terminated in the last six months, while 43% of respondents experienced dramatic payment cuts from insurers — both mid-contract and at renewal — in some cases by as much as 60%. Some of the impacted contracts were signed less than six months ago.

The informal, non-scientific survey, which was distributed earlier this month, received responses from 76 practice groups in 33 states. It confirms anecdotal complaints that proposed surprise medical bill legislation has coincided with a significant number of insurance contract terminations and unilateral lower payment adjustments by health insurance companies.

While the timing alone suggests insurance companies are motivated by factors related to anticipated legislative changes on surprise medical bills, some survey respondents reported they were specifically told by insurers this was the case.

The responses also indicated that UnitedHealthcare was noted as the insurer most associated with these changes, but Aetna, Cigna and Blue Cross Blue Shield also were mentioned.



By Don McCanne, M.D.

Patients who have been diligent in making sure that their hospitals and surgeons are in their insurers’ provider networks, often they find that the anesthesiologist is not and thus they may be exposed to surprise medical bills.

According to this survey from the American Society of Anesthesiologists there has been a relatively abrupt move on the part of private insurers to either demand payment cuts of up to 60% or force anesthesiologists out of the insurers’ provider networks. This certainly does not benefit the anesthesiologists, and it potentially exposes patients to surprise medical bills. So who does benefit? It is likely that the legislative proposals to end surprise billing that are being considered by Congress will primarily benefit the insurers. The government will control fees without need for the insurers to negotiate contracts with the providers.

This will work particularly well for the insurers if the legislation protects the patients from the surprise bills and the principle is established that the government can control fees in the private sector and not just in government programs such as Medicare and Medicaid. The insurer gets the equivalent of contracted rates without having to negotiate contracts. Arbitration has been proposed but it is administratively burdensome and costly and may result in higher fees, so the insurers do not want that. Congress has been very friendly to the insurance industry, and it is likely that this abrupt trend in contract cancellations signals the fact that the final surprise bill legislation will be written by the insurance lobbyists.

Can those politicians who keep telling us that we want to keep our private insurance plans explain to us why we would? Maybe we could find out their true motivations by checking out OpenSecrets.org.

Yes, fees would be controlled under single payer Medicare for All, but they would be determined through negotiations with representatives of the physicians, ensuring that they are fair for the physicians and fair for the taxpayers who fund the system. As it is now, we may soon find that our urgent care centers are staffed by former anesthesiologists who now work by the clock.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

About the Commentator, Don McCanne

Don McCanne is a retired family practitioner who dedicated the 2nd phase of his career to speaking and writing extensively on single payer and related issues. He served as Physicians for a National Health Program president in 2002 and 2003, then as Senior Health Policy Fellow. For two decades, Don wrote "Quote of the Day", a daily health policy update which inspired HJM.

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