What Is a Gag Clause in an Managed Care Contract

If you encounter this clause in your contract, delete it! Knowledge is power. If you know what precautions to avoid in a managed care contract, you have already accumulated bargaining power in the contract. Of the 100 or so contracts I reviewed and analyzed, I saw only one that included a “whistleblower” clause. This type of clause is worth mentioning as it can escape your attention when you review your contract and could be a liability burden on your door. The whistleblowing clause requires a physician who is already under contract with a managed care organization to report within 24 hours an unapproved provider who is caring for an insured patient due to an emergency. Gag rules — clauses in managed care contracts that prevent doctors from disclosing information that the plan may find derogatory but that could be directly related to the patient`s health — have recently been the subject of ethical condemnation and a legal ban. Another serious problem in managed care contracts, trade secrets or policies, and quality assurance mechanisms imposed on physicians while their origins are shrouded in exclusive secrecy, on the other hand, have received little attention. Responses to these ethical challenges to physician integrity must involve individual physicians, managed care organizations, professional associations, and public decision-makers. Since MCAs cover approximately 190 million citizens in the United States,4 these gag clauses have a significant impact on the health care of most people in this country. Predictably, organized medical and consumer groups praised state and federal efforts to restrict the use of such clauses.

But even with a law against gag clauses, there are other ways in which the MCO can apply the desired medical action. Virtually all health care contracts signed by physicians include a termination clause for no reason. This clause generally allows the MCO to dismiss the physician for any reason or no reason.4 Challenges to this form of termination (also known as “deselection” because the MCO`s originally “chosen” physician is “rejected” upon dismissal) have been remarkably unsuccessful.4, 5 Have you recently checked with your professional liability insurance provider? Most, if not all, carriers will not assume the liability that the physician assumes under these safety agreements. (See also the article on the impact of managed care on malpractice liability, page 21.) The author is a lawyer and managed care consultant at doctors` management inc. in Gainesville, Florida. “The Supplier must notify the Network, the third-party payer or the employer within twenty-four (24) hours if the Supplier becomes aware that an unauthorized provider is caring for an insured person due to a medical emergency.” State lawmakers and the U.S. Congress are currently seeking to prohibit “gag clauses” in physician contracts.1, 2 These clauses, enacted by Managed Care Organizations (CMOs) and other such health plans, prohibit physicians from openly discussing any treatment options, whether covered or uncovered, expensive or inexpensive, which could be beneficial for the patient. For example, a clause reads, “DO NOT discuss proposed treatments with [health plan] members before obtaining approval. Do NOT discuss the [usage monitoring] process with members. DO NOT share the [plan supervision] phone number with members.

3 Physicians should consider whether they want this responsibility. Does this clause require you to ask the other physician about their participation in the network? What about possible liability to you if you get the facts wrong? Remove this clause and initialize it before returning the contract to the managed care organization. What should physicians do if these communication restrictions affect patient care? It would be convenient if we could simply “do our best for the patient, whoever the patient is,” that is, talk to the patient about specialized treatment, experimental procedures, drug without formula, etc., and then be rejected. Unfortunately, things are not so simple in the practical world. There are negative effects of such a choice that go beyond the specific treatment for the given clinical circumstance. At a fundamental level, there is the patient`s loss of confidence in his treatment after the first doctor has been rejected. And there are the difficulties faced by the next doctor, who must try to keep abreast of the important material and intangible factors of the patient and the treatment, and takes precious time to reinvent the wheel. Therefore, the patient and the doctor stacked the bridge against them to build an optimal relationship. The new physician must rely on a one-page transfer summary and notes scribbled over a period of several years or more, without the benefit of knowing the patient as a person, their culture, or their background.

And the patient must rely on the MCO to have another compassionate and caring physician on their list of selected providers with whom they can quickly establish a relationship of trust, similar to the one that took years to establish with the previous physician. So if you do the “best” in the short term by violating the implicit gag clause, it can lead to the worst for the patient in the long run. Through this approach, all parties involved in the delivery of patient care – the physician and MCO – will be incentivized to manage the care provided to the patient in a way that minimizes at least the risk of injury to the patient, rather than deciding on the scope and form of such care within the currently divergent incentives of physicians and management. By extending responsibility to the organization, the secrecy of relevant medical information would theoretically be discouraged by the organization itself, which would have a strong incentive to work diligently with the physician to find medical treatments that effectively treat the patient`s illness in order to avoid the cost of the patient`s injuries. Many HMOs have never used gag clauses. Others have removed these provisions from their contracts, and some have added contractual terms that encourage physicians to fully discuss with their patients any recommended treatment and reasonable alternatives. How do you deal with these clauses? Provide options to the negotiator of the managed care organization. These may include: mediation, determining an appropriate jurisdiction for arbitration, and removing the clause. How should you deal with this deal killer? Contact your professional liability insurance provider about the safe disposition to ensure that the policy does not expose you to any major personal risk or affect your coverage. .