Eye On Managed Care
Pushing Open the Doors
A Supreme Court ruling on "Any Willing Provider" laws could have a significant impact on some M.D.s.

For years, HMOs have been able to say, "We have enough physicians; the panel is closed." They've made it difficult for young M.D.s to start a practice, and for new doctors to "grow" in an existing practice. They've also refused admission to established physicians seeking to expand their patient bases. With so many patients tied into health plans with closed panels, denial means no access to many -- or most -- patients in some communities.

However, change is in the wind. In April, a United States Supreme Court ruling upheld two Kentucky "Any Willing Provider" (AWP) laws, obligating HMOs in that state to open their provider panels to any physician willing to accept a plan's payment rates and program terms. Now Kentucky HMOs won't be able to deny admission to physicians, as long as they meet the plan's credentialing standards. The ruling is also expected to apply in six other states with similar laws covering M.D.s: Georgia, Idaho, Illinois, Indiana, Minnesota and Wyoming. (Other states have AWP laws, but most only apply to nonphysician entities such as pharmacies.)

Several fascinating scenarios could result from this significant shift in the traditional HMO vs. provider power dynamic:

Opportunity for M.D.s. HMOs will no longer be able to turn down qualified physicians, new or established.

Opportunity for O.D.s. In many states optometrists are routinely denied admission to HMO panels. AWP laws will probably also open HMO provider panels to all qualifying optometrists, so this change could be enormously beneficial for them. (It will also change the patient/provider ratio in the managed care community, increasing the competition to attract HMO patients to each practice.)

Policy changes for third-party intermediaries. For example, in some states Vision Service Plan (VSP) is licensed as a single-service HMO. In those states VSP now can force a dispensing ophthalmologist to choose between admission to its primary vision care panel (providing routine vision exams and eyewear) and the medical/surgical eyecare panel.

In states with AWP laws applying to physicians, VSP may no longer be able to deny ophthalmologists simultaneous participation. The same might even apply in those states where VSP operates as a PPO third-party intermediary under contract to an HMO.

The end of capitation? Capitation management is extraordinarily complicated, and it can only work when the at-risk entity -- such as an IPA, medical group, or physician network -- handpicks a limited number of dedicated participants (who may also be co-owners of the at-risk entity). Crucial tasks such as effective utilization management and stringent cost-containment are impossible when network admission is guaranteed to anyone -- including doctors who clearly don't understand the commitment necessary for capitation.

For this reason I believe HMOs in AWP states might see a significant reduction in the already shrinking number of entities willing to accept capitation. This could even lead to the total demise of eyecare capitation in some markets.

Just the Beginning?

Most ophthalmologists in states with AWP laws will regard this as positive news. In other states, AWP legislation may not happen any time soon, given today's much more urgent issues of malpractice insurance cost and tort reform.

One thing is sure: These are interesting times in managed care.

Gil Weber, Ophthalmology Management's consulting editor, is a nationally recognized author, lecturer and practice management consultant to practitioners and the managed care and ophthalmic industries. He has served as director of managed care for the American Academy of Ophthalmology. You can reach him at (954) 915-6771, by e-mailing gil@gilweber.com  or at www.gilweber.com.