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Dear Friend,
Thrown out of network.
A few weeks ago, in August, 2019, the giant insurer UnitedHealth informed the large physician services company, TeamHealth, which fields physicians in many specialties including anesthesiology, emergency medicine, and hospitalist services, among others, that it would be dumping TeamHealth from two-thirds of their high reimbursement in-network contracts over the next 11 months.
As of this writing, nothing’s reported to have changed. Maybe they’ll kiss and make up. But maybe not. It’s been reported that TeamHealth may be ramping up to file suit.
The UnitedHealth/TeamHealth scuffle intersects with topics addressed elsewhere on the blog and presents interesting opportunities for some physicians and their medical groups.
For example, being removed from UnitedHealth plans might put Team Health’s exclusive contracts with hospitals at risk. Recall, for example, my August 19, 2019, post, Hospital Sues Medical Group. Medical Group Returns The Favor. Both Likely Lose., which reported on the fact that Trinity Health, a not-for-profit Catholic healthcare system doing business in Michigan had filed suit against the large, exclusively contracted Anesthesia Associates of Ann Arbor, also known as “A4,” claiming that A4’s becoming out-of-network with several payers violated the terms of the exclusive contract. Trinity wants to bring in its own anesthesia providers and seeks to use A4’s anesthesiologists and CRNAs, who are subject to non-competes, to do so.
Will TeamHealth lose exclusive contracts due to being forced out of network? Will this pose an opportunity for other groups to attack Team Health’s position as the exclusive provider?
Additionally, moves such as this by UnitedHealth to terminate TeamHealth from its network are likely emboldened by the increase in the number of states that have adopted so-called “surprise medical bill” legislation.
That type of legislation usually forces so-called “average contracted rates” on out-of-network physicians subject to its “fix.” By throwing higher reimbursed groups out of the network, the average, and thus the amount to be paid to non-contracted providers, falls, perhaps precipitously.
Only time will tell what happens to UnitedHealth and to TeamHealth as a result of the kerfuffle.
Other groups in competition with TeamHealth should be ready to pounce.
The situation also demonstrates that although large groups with national contracts can use their market power to cut great deals, they can also be singularly disadvantaged when great numbers of those contracts are terminated – strength turned into fragility. |
| | Tuesday - Success in Motion Video: Why You Want or Don’t Want An Arbitration Provision in Your Contract – Rebroadcast
Watch Tuesday's video here, or just keep reading below for a slightly polished transcript: |
| | Let’s talk today about arbitration agreements in a contract setting. Why would you want one? Is it a tool to help you? Or is it a tool to be used against you?
Many people believe that arbitration or some other form of private decision making is better than going to court. Maybe it is, and maybe it isn’t. And maybe, the question that you must ask yourself in determining whether arbitration is better or worse for you is slightly different: “Would you like to give up your right to trial by jury in a civil action?” Or, “would you like to give up courtroom protections?”
Often times, people think that an arbitration provision is placed into an agreement because it is going to be quicker, easier, more direct, and therefore it's going to save time and money in the event of a dispute.
But, as any experienced attorney will tell you, arbitrations can go on, and on, and on.
In fact, a colleague was once involved in an arbitration that had dragged on for eighteen months. That would be almost impossible in a courtroom setting. That arbitration certainly wasn’t faster than a trial. Do you think that it was cheaper? No way! It was far more expensive.
Second, when considering an arbitration provision, or inserting one yourself, think about who you will be arbitrating in front of. There are solo arbitrators who are unaffiliated with any arbitration company. There are arbitration companies like JAMS or ADR. Then there’s sort of the “granddaddy” of them all, the American Arbitration Association.
Specifying the arbitration “forum” in the agreement can itself impact the odds that you or the other party will file a claim. For example, the AAA has very formal rules for how an arbitration is conducted and its filing fees can be expensive.
Third, you need to consider discovery rights when crafting, or becoming bound to, an arbitration provision. In other words, what rights to take depositions, require the other side to provide information via interrogatories, etc., exist?”
Similar in some ways to attorney’s fees provisions, arbitration provisions can be used to frustrate the resolution of the case. While they seem warm and fuzzy, the process itself can be more burdensome than trial, as well as more expensive than trial. It can be a disincentive to do what arbitration is supposedly, in popular vernacular, there to accomplish - a quick, simple and inexpensive resolution of the dispute.
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| | | Wednesday - Medical Group Minute Video: Cooking Time = Negotiating Time
Watch the video here, or just keep reading below for a slightly polished transcript:
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| Recently, as my wife and I were in the kitchen, she quipped, peering into the oven, that she forgot to set the timer for the final step of the recipe.
I asked what she should have set the timer for, and she said 8 minutes, but that that was just cooking time, not actual time.
Hmm. Was time different inside the oven? Was a minute not a minute?
Okay, I’m not an idiot. I know that “cooking time” just means “estimated time.” Or does it? Think about it for a moment. Is time always the same?
I’m not trying to go all Einstein on you. [Einstein is said to have said, but probably didn’t himself say, in explaining relativity, something to the effect of, “when you sit with a nice girl for two hours you think it’s only a minute, but when you sit on a hot stove for a minute you think it’s two hours. That’s relativity.”]
Or, maybe I am, because “cooking time” as a different sort of time, a distorted time, a malleable time, is a perfect concept for use in negotiation.
Each negotiation has its own timing, not one set by a standard recipe or by a clock on the wall or on the calendar, but one that can be, and should be, set by you.
The object is not to get the deal done quickly, but to get the deal done – meaning on terms acceptable to you. Accomplishing that rarely means quickly and it always means deliberately.
Sometimes it means changing the clock to slow things down or to speed it up. Always it means deciding when to bring up issues, adding ingredients to the deal, if you will.
Other times it means imposing deadlines, real or imagined. Almost always it means ignoring deadlines.
Time in negotiation is not real time.
Instead, it’s a tool in the kitchen drawer of negotiation. A very useful tool.
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| | Thursday - Podcast: Another Medical Staff Moves to Fire The Hospital CEO |
| Listen to the podcast here, or just keep reading for the transcript
I can’t be sure that anyone on the medical staff at St. Mary’s Medical Center in Long Beach, California read my 2017 post, What You Need To Know About The Flea That (Metaphorically) Killed The Medical Center CEO, but they appear to be following the same strategy in an attempt to eject a hospital CEO, Carolyn Caldwell, in whose leadership ability they have no confidence.
In that 2017 post, I recounted the story of the “no confidence” action by no more than 37 medical staff members that brought down the CEO of Ohio State University’s Wexner Medical Center, Sheldon Retchin, M.D.
I analogized the action of the few handfuls of physicians to guerrilla warfare as described in the seminal work by Robert Taber, The War of The Flea. Taber wrote about how a small band of guerrilla fighters could emerge victorious in a conflict with a larger, well organized enemy
“Analogically, the guerrilla fights the war of the flea, and his military enemy suffers the dog’s disadvantages: too much to defend; too small, ubiquitous, and agile an enemy to come to grips with.”
In the “Battle of Long Beach,” the opening salvo was fired in February this year when the Medical Executive Committee sent a letter to all members of the medical staff that they were initiating a dispute resolution process with the medical center’s administration centering around what appears to have been their learning, through the “grapevine,” that St.Mary’s was about to end very long-standing contractual relationships with the anesthesiology and radiology groups covering the facility.
In that letter dated February 6, 2019, the MEC stated their contentions that the administration had violated both Joint Commission requirements and California law pertaining to a medical staff’s rights of self-governance, (1) by refusing to discuss with medical staff leaders who will be providing contracted clinical services, (2) by initiating steps to terminate existing clinical services contracts and to award alternative contracts in retaliation for medical staff leaders’ advocacy for improved patient protection and peer review policies, and (3) by taking steps to terminate contractual arrangements with the Vice Chief of Staff so as to interfere with the medical staff’s right to select its leadership.
Although it’s unclear what, if anything, happened to the radiology group providing services at Saint Mary’s, the hospital initially granted an extension to the current anesthesia group, Long Beach Anesthesiology, which had held the contract since the 1990s. Then, in mid-May 2019, the hospital announced that it would no longer deal with Long Beach Anesthesiology and that it was awarding the contract to Somnia Anesthesiology beginning September 1, 2019.
The warm war then became hot, with the MEC calling a meeting of the full medical staff on May 21, 2019, at which there were no votes in favor of CEO Carolyn Caldwell’s leadership abilities. 58 physicians added their names to the no-confidence letter delivered to the hospital, with others, according to Chief of Staff, afraid to sign-on publicly due to fear of retaliation from the administration.
So far, CommonSpirit, the system that runs St. Mary’s, has refused to cave in to what is essentially the Medical Staff’s demand that Ms. Caldwell be terminated.
What does this mean for your organization and for you, personally?
From the organizational perspective, as in a guerrilla war, change within the organization, as well as within a domain in which the organization interacts, can occur as a result of agitation, even by a vocal minority. Just as no vote was required for a dictator like Casto to take over Cuba, no medical staff vote, no survey by Press Ganey, no long and drawn out process among “stakeholders,” is required to topple the status quo.
What you think is permanent is only temporary. How temporary is the question.
What you do, and how you do it, within your organization, and how you project it to essential third parties (e.g., hospital-based medical group to hospital) is all-important in maintaining relationships, contracts, and even existence. That’s the flea collar.
And, just the same, from the perspective of the individual, the small, the “out group,” the “flea,” a steadfast, vocal, and somewhat intransigent minority, can kill the dog. The large group can be made irrelevant. The hospital CEO can be forced out. The small organization can ingest the larger. Yes, the dog bites back. No win is guaranteed.
In the Ohio State/Dr. Retchin situation, just 3 letters signed by, at the most, 3% of the medical staff, were unable to unseat the king. Chalk up one for the flea.
Many say that the world is a tough place. Maybe it is, because it’s not just dog-eat-dog. In Dr. Retchin’s and Wexner’s world, it’s flea-kills-dog as well.
In the St. Mary’s situation, it appears as if 100% of the medical staff wants to unseat the queen, but the administration is pushing back. Perhaps it’s chalk up one for the dog.
But only time will tell. And, unlike at a state-owned academic medical center with hundreds of employed physicians, at a community hospital like St. Mary’s the huge majority of the staff have the ability to refer their patients elsewhere. Ms. Caldwell may indeed remain queen, but perhaps as the queen of a ghost ship. So, perhaps it will end up as chalk another one up for the flea.
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| | | | We all hear, and most of us say, that the pace of change in healthcare is quickening. That means that the pace of required decision-making is increasing, too. Unless, that is, you want to take the “default” route. That’s the one is which you let someone else make the decisions that impact you; you’re just along for the ride. Of course, playing a bit part in scripting your own future isn’t the smart route to stardom. But despite your own best intentions, perhaps it’s your medical group’s governance structure that’s holding you back
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| In fact, it’s very likely that the problem is systemic. The Medical Group Governance Matrix introduces a simple four-quadrant diagnostic tool to help you find out. It then shows you how to use that tool to build your better, more profitable future. Get your free copy here.
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| | | | | | Stay tuned! Our new website is launching soon!
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| | | Whenever you're ready, here are 4 ways I can help you and your business:
1. Download a copy of The Success Prescription. My book, The Success Prescription provides you with a framework for thinking about your success. Download a copy of The Success Prescription here.
2. Be a guest on “Wisdom. Applied. Podcast.” Although most of my podcasts involve me addressing an important point for your success, I’m always looking for guests who’d like to be interviewed about their personal and professional achievements and the lessons learned. Email me if you’re interested in participating.
3. Book me to speak to your group or organization. I’ve spoken at dozens of medical group, healthcare organization, university-sponsored, and private events on many topics such as The Impending Death of Hospitals, the strategic use of OIG Advisory Opinions, medical group governance, and succeeding at negotiations. For more information about a custom presentation for you, drop us a line.
4. If You’re Not Yet a Client, Engage Me to Represent You. If you’re interested in increasing your profit and managing your risk of loss, email me to connect directly. |
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