ConnectiCare In Fight Over Doctors' Fees
Standoff Involves 154 Physicians
Talks between Farmington-based ConnectiCare and Middlesex Professional Services, which negotiates for physicians, reached an impasse, and the insurer has notified MPS that it won't renew the contract that expires June 30. MPS contends that the current contract must continue another year because the insurer didn't give proper notice of termination.
ConnectiCare's second and final offer for a new contract was an average fee decrease of about 6.5 percent from what the insurer pays the physicians now, and that's not acceptable because doctors' expenses aren't going down, said Doug Arnold, executive director of MPS. The insurer's first offer was about an 8 percent fee cut, he said.
Arnold said MPS is willing to negotiate further with ConnectiCare, but "they've decided to burn the bridges here."
ConnectiCare has offered to contract with the doctors individually on nearly the same terms as it offered MPS. That's a way for the company to wield more economic power over physicians because it's hard for doctors to know what the "going" reimbursement rates are in the Connecticut market, Arnold said.
The health plan wants to reduce reimbursements to the group because "our main focus is keeping costs of health care down for our members and employer groups in that area; that's the main issue here," said Stephen Jewett, a ConnectiCare spokesman.
Members haven't been notified about the dispute yet because ConnectiCare believes "we're going to have the network at 100 percent" through individual contracts with the doctors by July 1, Jewett said. "We don't think there's going to be a disruption."
Regardless of whether the dispute is resolved, it won't affect members' use of Middlesex Hospital or the hospital-based physicians, Jewett said.
Arnold said he expects any savings ConnectiCare gets by cutting doctors' pay "are going to go to their bottom line and executive bonuses" and won't lower premiums. Jewett said the insurer isn't making giant profits and fared little better than break-even last year. ConnectiCare Inc.'s report to regulators shows its HMO made a $4.8 million net profit in 2008 on $802.6 million of revenue.
MPS says ConnectiCare failed to give the required 180-day notice that it planned not to renew the contract, and instead gave 180-day notice that it wanted to negotiate terms of a renewal. It wasn't until a May 5 letter that the insurer said it decided not to renew the current agreement, Arnold said. As a result, MPS believes the existing contract must remain in force another year.
The ConnectiCare standoff is the latest of several insurer-provider disputes in the last six months. Bristol Hospital eventually struck a new agreement with UnitedHealthcare, and CIGNA signed a new contract with Eastern Connecticut Health Network.