« Fine Fellows | Main | Stand Up for Family... »

Wednesday Oct 12, 2011

A Conversation About Fair Payment

According to a recent survey, payment issues are the No. 1 concern for AAFP members. We heard you and wanted you to know that we are actively working on this topic for you with both public and private payers.

Academy leaders, including myself, met with about a dozen representatives from one of the nation's largest private payers on Oct. 10 to discuss payment and your concerns.

During the four-hour meeting -- which included representatives from UnitedHealth Group and its subsidiaries, UnitedHealthcare and Optum -- the AAFP discussed distressed practice environments and clearly spelled out for company representatives that paying fee-for-service rates that are below Medicare rates harms primary care physicians and jeopardizes patients' access to care.

A number of members practicing in distressed environments have asked the AAFP for help.

Evidence has shown that primary care leads to better outcomes and lowers overall health care costs. However, these distressed environments -- where primary care payment is especially low -- have low per capita primary care physician penetration rates, high per capita subspecialist penetration, low retention of primary care trained residents, aging primary care bases, and a decreasing number of primary care physicians.

Many health plans are offering family medicine practices -- especially in rural areas and in areas with small- and medium-sized practices -- contracts for fee-for-service payment that are up to 40 percent less than Medicare. Sadly, these practices have no room to negotiate. It's take it or leave it.

We told United's representatives that such tactics are outrageous. This approach is killing primary care practices. Meanwhile, some subspecialists in these same geographic areas are being offered fee-for-service rates at or above Medicare rates, steering medical students away from primary care, driving family medicine residents out of these areas and exacerbating shortages in the primary care workforce.

Paying less than Medicare also conveys the public message that UnitedHealthcare, as both a payer and employer, does not value primary care. We urged company representatives to reconsider their corporate policy in this regard.

The AAFP's Commission on Quality and Practice is looking into the problems faced by family physicians in these distressed practice environments. In addition, a staff working group is collecting data on factors that lead to these environments, where they exist and ways the AAFP can work with constituent chapters to address the problem.

The Academy also has asked the Patient-Centered Primary Care Collaborative to address the fact that some private health plans involved in the PCPCC are offering family physicians contracts that pay significantly less than Medicare.

It is up to you as an individual physician to decide who to contract with. However, it is important that part of that decision-making process is an evaluation of whether the offered payment leads to a viable practice with quality patient outcomes.

For years, the AAFP has urged public and private payers to adopt a blended payment model that rewards primary care physicians for coordinating and managing patient care. Our meeting with United came soon after some good news on that front. On Sept. 28,  CMS and its Center for Medicare and Medicaid Innovation, or CMMI, announced the launch of the Comprehensive Primary Care InitiativeThe initiative will involve CMS collaborating with commercial and state health insurance plans to support primary care practices that deliver coordinated and seamless care.

The program will give participating practices fee-for-service payments and a risk-adjusted per-patient, per-month coordination fee ranging from $8 to $40, plus the opportunity to share in savings resulting from the program. This model is what AAFP has been advocating in support of the patient-centered medical home, and we encouraged the United companies to participate.

Commercial insurers interested in participating in the initiative need to submit a letter of intent to participate by Nov. 15. CMS will then recruit 75 primary care practices in up to seven regional markets for the initial phase of the project. Participating physicians will benefit from the blended payment model for Medicare and Medicaid patients as well as patients enrolled in participating private insurance plans.

AAFP leaders are scheduled to meet with CMMI staff Oct. 20 in Washington, D.C. to talk about the initiative, and we plan to discuss it again with UnitedHealthcare sometime after that CMMI meeting.

I'm confident this initiative will further demonstrate that patient outcomes improve and costs are saved when the health care system values primary care by paying for all the services we provide to our patients.

Monday's meeting with UnitedHealthcare was a first for me but not for the Academy. The AAFP meets regularly with private payers, and similar meetings with other large commercial insurers are being planned for 2012. As with Monday's meeting, the focus will be on payment and improving care coordination and quality.

Our message is simple. To ensure patients' access to care, primary care physicians must be paid at a level that matches the value of our service.



You are negotiating with an organization that gave its retiring ceo over a $1 billion dollar retirement package. I think we have little value to these organizations. United obviously could not skim that kind of money from patient care and grant it to a single individual if any semblance of care for our patients existed in the ethos of the company.

Posted by David Black on October 18, 2011 at 09:12 PM CDT #

David, thank you for your comment. I certainly understand your frustration. The discussions between AAFP leadership and United Health Care are certainly not negotiations. I share your perspective they don't adequately value family physicians. A primary focus of our discussions was to point out their payment policies inadequately value primary care and send a message to medical students that this large insurance company doesn't value primary care. This message was delivered clearly and repeatedly. I hold no illusions they will drastically change their behavior based on this one meeting but through our ongoing meetings and participation in the Patient Centered Primary Care Collaborative I'm hopeful we will see changes over time.

Posted by Glen Stream, MD on October 18, 2011 at 10:06 PM CDT #

Well said, Dr. Stream. However, I think any insurer that pays 40% less than Medicare must hold family physicians and what they do in such complete contempt that it is probably impossible to have a "conversation" with them. I'm not sure that the physicians practicing in these distressed environments will be able to hold out for "changes over time." What we're seeing here is the inevitable result of two decades of compromise and give-aways on the part of America's family physicians. Many of us feel that our speciality is in crisis, and drastic action is called for. Just off the top of my head, how about a focused ad campaign in these distressed areas, giving the public the facts about what United pays its executives, and what it pays physicians? How about meeting directly with the large regional employers to shed some light on the situation? I don't think talk is going to get us anywhere with this gang of thugs.

Posted by D. C. Brown on October 19, 2011 at 08:33 PM CDT #

Our 6 provider family practice has never contracted with United Healthcare because of its history of unethical practices in its relationship with primary care docs. We will hold out as long as we can, but we have lost many patients as a result. I think that begging United for justice will get us nowhere and is distasteful. We should be aggressively making our case with employers who contract with United.

Posted by Evan Ballard on October 20, 2011 at 05:15 AM CDT #

I agree with Dr. Brown. We need to be more assertive in our interactions with these insurers. They are abusing the health care system for their own profit and gain with little interest in providing care to patients and paying doctors fairly. I held out from signing a contract with them as long as possible and lost many patients. Then the local hospital (second largest employer in county) signed with them. I was stuck. I originally refused to sign the contract as their rates were well below Medicare. The hospital human resources department intervened and said they needed me in network and got me much better rates. I signed the contract but limited it to only the plan the hospital uses. I opted out of their capitated plans, MedicareHMO and Medicaid plans, etc. Things have been OK. This company is NOT friendly to doctors or patients.

Posted by stargirl65 on October 20, 2011 at 09:30 AM CDT #

My hairdresser gets paid better than our Family Physicians by all the private payers while they grossly overpay many subspecialists 5-9 times more than equivalent services by primary care (my family's own EOBs tell the sorry tale). Trying to work with the private health insurers is a losing battle - haven't we beat our heads against that wall long enough?! We need to work around this obstacle with help organizing forces to create networks that can contract directly with employers and patients.

Posted by Susan Wilder on October 21, 2011 at 04:44 PM CDT #

Thanks to everyone who commented on this topic. I predicted if this blog post on a controversial topic got no responses it meant no one was reading. I understand this is controversial and that's why our Academy needs to fight for members and patients. @ D.C. Brown: I agree with your comment about engaging patients and regional employers. This needs to be done by FPs in those regions. I encourage you to reach out to the AAFP Private Sector Advocacy folks for resources and support. @ Evan Ballard: I'm disappointed you'd think AAFP would "beg for justice." Our message was of strong objection to their payment policies and their impact on family physicians. @ stargirl65: I complement you on your approach to contracting with health plans. If more family physician practices showed this business sense and discipline we might have prevented the situation from getting this bad. @ Susan Wilder: I agree with you about the benefits of bypassing health plans to contract directly with employers and patients. This approach takes a lot of work and may not work in all markets but can certainly restore some sanity and eliminate unnecessary administrative cost. Overall, I'd agree it is challenging to engage with a health plan like United. But our focus as family physicians is what is best for our patients. United and others may not change policies based on our input, but without that input they most certainly won't change. United administers health benefits for 70 million Americans. As advocates for those patients and the family physicians providing their care, AAFP will continue to engage United and other major health plans, no matter how difficult the process.

Posted by Glen Stream, MD on October 23, 2011 at 09:34 PM CDT #

That is one of the reasons that I let primary care in a small town and now work out of an Urgent Care. It is too complicated and difficult for a solo provider to try and negotiate with large carriers and patients have little say so in the carrier their employer uses.

Posted by John Reaves on October 24, 2011 at 01:36 PM CDT #

Thank you for your work in addressing this important issue. I also experienced work as a solo physician attempting to negotiate, in fact with one of UHG subsidiaries. I was able to obtain a phone interview to negotiate with the contracts department and their lawyer, but it did not result in a change to the contract. The contract stipulated a discount from the billed rate. As a practice that focused on those without insurance or those with high deductibles I did not want to charge more to patients without insurance than those with insurance that were paying for all of their own expenses. As a result the patients with insurance were receiving a discount on already minimal fees being charged. Ultimately, patients with insurance wanted me to contract with their insurance company. They would have gladly paid the fees I was charging without the discount; but the contract would not allow me to do so. Such a model of a small practice negotiating with insurance companies on pricing only works if you are all working together. Expecting an office with very low fees to lower them even more in order to bill through an insurance company is an example of how the focus of the insurance company needs to shift. This conundrum will be even more true as patients take on greater cost sharing with high deductible insurance plans - a trend we are already seeing take place. Unless or until this system of contract negotiating of small offices changes, I will not be able to return to that practice environment even though it was tremendously well received by my patients and our community in general. I appreciate your attention to this input and hope that it may be helpful in the efforts of our academy.

Posted by Samuel Hanson Willis, MD Family Medicine Physician on October 25, 2011 at 04:08 PM CDT #

Could you please check...I submitted a comment on this article yesterday.. could you let me know by e-mail if you received it and will post it. Thank you. Robert T Bailey, PharmD, MD, FAAFP

Posted by Robert T Bailey, PharmD, MD, FAAFP on October 25, 2011 at 08:18 PM CDT #

In contrast to President Obama's thinking, health insurance no longer guarantees healthcare as highlighted in this article. I would suggest that if we individually and collectively as AAFP would focus resources first on supporting our members who are delivering patient care above and beyond all else, second make the doctor-patient relationship our passion, and third educate the public directly on our commitment to being their personal physicians and advocates, detailing to them the evidence of our incredible cost- effectiveness as highlighted by the research of Barbara Starfield, MD, DPH, Director of the Primary Care Institute at Johns Hopkins University, and bring to light to the public the unfair and unjust reimbursement practices of RUC and the for-profit health insurances who favor of higher reimbursement rates for hospitals and sub-specialists in lieu of primary care we have our best chance to restore and advance this great specialty. Contrary to UHC public campaign, they do not take care of the patient, we do!

Posted by Robert T Bailey, PharmD, MD, FAAFP on October 25, 2011 at 08:53 PM CDT #

You must be logged in to post a comment. Login

Sign Up

Subscribe to receive e-mail notifications when the blog is updated.


Our other AAFP News blog

Fresh Perspectives - New Docs in Practice


The opinions and views expressed here are those of the authors and do not necessarily represent or reflect the opinions and views of the American Academy of Family Physicians. This blog is not intended to provide medical, financial, or legal advice. All comments are moderated and will be removed if they violate our Terms of Use.