If you work in primary care, you’re probably well aware the system could use a facelift. You know what’s best for your patients but often the best choice isn’t covered by insurance. You feel that you don’t have enough time to spend with your patients but to meet your appointment allotment you have to rush through visits. Or, maybe you are just unhappy in your job but can’t quite put a finger exact reason that working in the healthcare system leaves you a bit disgruntled.
Last week I began a three part series covering an article that discusses the three obstacles to providing better primary care. I thought this article did an excellent job of identifying major barriers we as nurse practitioners and physician assistants encounter in our daily practice. First, I discussed the expectation that primary care should be paid by insurance and how this affects the healthcare system. Today, let’s look at a second obstacle to primary care, “No Other Payment” clauses in insurer-provider contracts.
Obstacle 2: “No Other Payment” Clauses in Insurer-Provider Contracts
Say you wanted to pay your primary care doctor differently and more for the kind of relationship you want. You might go to your doctor and say “Hey doc, instead of you only getting paid x by the insurance company when I have an office visit, I’d like to pay you $60 per month whether I see you or not because I’d like to have an ongoing relationship with you and I’m willing to pay for that.” As things stand today, your doctor would have to say “I’m sorry, I can’t do that as long as you have your health insurance because of my contract with your insurance company.”
This is because of “No Other Payment” clauses in insurer-provider contracts. These clauses provide that the doctor cannot charge the patient any amount other than the price (reimbursement rate) negotiated in the insurer-provider contract.
Why? To explain this, it helps to start by understanding that there are three types of “prices” in health care:
Retail Price: What the provider publishes as its “retail” price
Insurer-negotiated rate: The rate the provider has negotiated with the insurer that all members have to pay
Cash-paying patient price: What the provider is actually willing to take if the patient is paying cash
Many patients are already “on the hook” to pay cash out-of-pocket for their health care needs up to their deductible. As things currently stand, when they go to the doctor, they pay the insurer-negotiated rate. It has surprised many to find out that this insurer-negotiated rate is higher than the provider’s cash-paying patient price.
This issue has been widely covered in the media. When pressed, providers say that they are not allowed to charge insured patients the lower cash-paying patient price because of the contracts they have with insurers. The providers explain that those contracts force them to charge these patients the higher insurer-negotiated rate.
But what if the patient wants to pay more, or pay differently, as in a subscription based model? Same issue applies. The doctors can’t do it because of these “No Other Payment” clauses.
Legal experts say that states could forbid insurers from putting these clauses in their provider contracts. In other words, states could stop insurers from forbidding providers from charging prices to covered patients that are lower or different than the insurer-negotiated rate. Passing such a law would open the door to giving doctors more flexibility to experiment with different business models for delivering care. This would be particularly true for primary care, where the subscription-based business model has already started to flourish.
Without this sort of change, doctors who want to implement a new, better business model have to end their carrier contracts completely. That is hard. By forbidding these clauses, doctors could make an easier transition to a different business model than fee-for-service.
A Nurse Practitioner’s Response
If you own your own clinic, or work for a smaller office, you are more likely in tune to the contractual obligations you have with insurance companies. How cool would it be if these were lightened allowing for more freedom and innovation within your practice.
Most primary care physicians, PA’s and NP’s are frustrated with the red tape they encounter in daily medical practice. While some regulation is of course necessary, it’s gone too far. Imagine what you and your practice could do if you had the luxury of thinking more freely. You could change the way your practice is run and how patients are billed. You could work outside the current system.
We won’t see change in primary care, or in any patient care for that matter, until regulations such as “No Other Payment” clauses with insurance carriers are abolished. Current contracts with insurance companies don’t allow for creativity and innovation keeping medicine stuck in it’s current debacle. Allowing providers to think and experiment with new models for providing primary care benefits both patients and providers. With better, less stringent contractual systems in place patients and providers will be much happier with primary care.