by Claude Solnik
Published: June 16, 2011
Tags: antitrust laws, collective bargaining, coverage, Health Care, insurers, Long Island, medical insurance, medical practicioners, payments, reimbursements

Dr. Michael Ditkoff, an ear, nose and throat doctor in Manhasset, has extensive experience in treating disease, but hasn't spent time at the bargaining table when it comes to negotiating rates with insurers.

Ditkoff and many others say insurers essentially dictate reimbursement rates at levels physicians frequently consider to be rock bottom or worse.

"They don't even talk to me. I would love to negotiate with them," he said. "They have no incentive to speak with me. ... They don't have to give me better rates. It's take it or leave it."

Although hospitals and insurers conduct extensive negotiations, antitrust provisions ban doctors from collectively bargaining, leading to a steady erosion of rates.

But legislation has been introduced that would let doctors collectively bargain in New York, potentially forcing insurers to better compensate them and, doctors say, helping level the playing field.

"If you collectively bargain, you can then try to get higher reimbursements from these companies, as hospitals are getting higher reimbursement," said Dr. Paul A. Hamlin, president of the Medical Society of the State of New York

State Sen. Kemp Hannon, chairman of the Senate's Health Care Committee, proposed the bill that would empower doctors to collectively negotiate in cases where "health plans dominate the market to such a degree that fair and adequate negotiations between health care providers and the plans are adversely affected."

In the legislation, Hannon describes the goal as being "to restore fairness in the contracting process between health care providers and large managed care plans." The bill would create a system for resolving disputes when insurers don't negotiate.

Hannon argues that industry mergers such as those between United and Oxford, MVP and Preferred Care and Wellpoint with Wellchoice (to form Empire) consolidated power. As of March 2008, almost 75 percent of managed care plan members in New York were enrolled with just five insurers: GHI/HIP, United/Oxford/Amerchoice, Excellus, Empire and MVP/Preferred Care.

But insurers argue giving doctors more clout will make care more expensive, and lead to higher rates.

"The proposed legislation relaxes antitrust laws designed to protect consumers from excessive pricing," said Dr. Scott Breidbart, Empire BlueCross BlueShield's chief medical officer. "This bill will increase health care costs and will not improve health care quality."

But Ditkoff said insurer consolidation has depressed doctor rates so "they pay you an unreasonably low fee for the most part" in networks and that there needs to be "a logical meeting of physicians and insurers who say this is a reasonable amount of money."

Ditkoff, for instance, said he gets $200 to $300 for a tonsillectomy, an hour-long operation that includes 90 days of follow-up care.

"I'm not saying they should pay 30 grand," he said. "There has to be something normal. That's unacceptable, but we all do it. If we don't accept payment for that, we're concerned we'll lose a lot of patients."

Even Ditkoff said allowing physicians to bargain collectively might improve reimbursements while raising health insurance premiums.

"I think it'd be great," he said of collective bargaining. "But I don't know how that's going to solve other problems. No one's going to bargain for less. Where is this money coming from? If everyone's complaining there's no money, how would that fix a broken health care system? It would make medicine more expensive."

Claudia A. Hinrichsen, a partner at Abrams Fensterman, a law firm in Lake Success with a large health care practice, agreed that insurers would likely increase charges to members to cover the increase in doctors' reimbursements.

"They'll try to pass it on to the consumers. It's a no-win situation," she said. "The insurance companies are like the casino in Vegas. They never lose."

Breidbart said doctors can improve reimbursements by banding together in loose networks, increasing efficiency and adhering to guidelines that lead to incentives for better care, such as longer hours.

"Without this bill, some physicians have joined with each other to form large groups, and these doctors enjoy greater bargaining power," Breidbart said. "We support the formation of those groups where the increase in physician fees is balanced by the provision of high-quality, efficient care."

Even if Hannon's legislation passes, it would have to comply with antitrust laws.

"The federal government is saying independent businesses that are competitors can't come together to fix prices," Hinrichsen said. "If the state passes a law, you still would have to pass muster under federal antitrust laws."

Hamlin, however, believes physicians are in a unique situation, since they are paid not directly by consumers, but by insurers controlling huge market shares.

"Many other professions don't have price controls. An attorney charges what he wants. The local veterinarian charges what he wants. Your dentist charges what he wants," Hamlin said. "Physicians don't have that luxury anymore."