INFORMATION FOR ATTORNEYS > Back To Newsletter List

Shaw Chiropractic
A Medical-Legal Newsletter for Personal Injury Attorneys
by Dr. Steven W. Shaw

Managed Care and Letters of Protection

I was recently questioned by an attorney friend with regard to what he should do in a client’s case which involved an orthopedic surgical procedure. The orthopedist performed a chodroplasty on his client and was paid the contracted fee by the managed care organization (MCO). The orthopedist then sent a bill for the balance along with a copy of the letter of protection which was given by the attorney. Was the attorney legally responsible (or even permitted) to pay these funds? THE ANSWER IS NO!!!

This concern was the topic of a previous newsletter titled "You Can’t Serve Two Masters" but since it has been two years since I wrote it I thought that the topic was worth revisiting. Interestingly, when I decided to write this newsletter I came across an article in the Connecticut Chiropractic Association’s newsletter (CCA) written by Lynette Newkirk who is their Claims Consultant. She addressed several issues which I will quote below:

"The bottom line is that the provider can not bill or collect from a patient or his representative any amount for which the patient is not financially responsible. A letter of protection is intended to protect fees to the extent amounts are due to a provider, later paying them out of settlement or jury verdict. If a patient is not financially responsible , the amount in question is not legally due and can not and should not be paid out of settlement. A plaintiff attorney who takes the position that he will not pay amounts in excess of that allowed by an HMO is proper."

There is a contractual agreement and obligation for a contracted provider to provide services and accept scheduled payments as payment in full. The provider may bill for deductibles and co-payments as permitted by the contract but nothing more.

What if the MCO agrees to pay for only 10 visits and the client received 25 visits. Read this language and decide for your self.

In the event that the MCO will not pay for services rendered by a provider to a member because of MCO’s findings that the services were not medically necessary the provider will not seek payment from the member.

Let me sum it up for you:

1. MCO providers must accept the fee schedules in the given contract.
2. MCO providers cannot see patient’s beyond the contractual guidelines.
3. MCO providers cannot perform or order procedures unless approved by the MCO.
4. MCO providers who do treat more than the average are subject to greater witholds (the percent subtracted from higher utilizers to assure physician compliance and MCO profitability)
5. MCO providers who treat more than minimally are not likely to have their contracts renewed.
6. Attorneys cannot and should not pay physicians for services beyond their contractual obligations of the MCO.

Some attorneys might be thinking that this is a wonderful opportunity to reduce the medical fees after the case has been settled with a carrier. By assuring that the patient sees their MCO doctor they can give the appearance of larger medical bills when in fact they are responsible for only a small portion leaving more money for their client. This would be a bad tactic since by now most of the physicians I know have been beaten up enough to realize that if the patient is a MCO member they had better control the care like a "good MCO doctor" (AKA employee) should. As a result, they give the minimum care possible to avoid a malpractice claim. After all, there are no incentives and many disincentives to giving the patient the gold treatment plan. The doctor’s needs are best served by giving the patient the minimum care necessary.

With this in mind the Shaw Chiropractic Offices have withdrawn from nearly all MCOs. We don’t want to compromise our patient’s quality of care nor do we want to jeopardize your client’s case. When speaking with your clients they should be informed of this obvious conflict of interest between the doctor, insurance company and patient. They should decide if they want to be treated optimally or minimally. Otherwise, they may seek care with a provider which has interests other than giving them the best care available.

What if the client decides to treat out-of network. Do they have to pay out-of-pocket? Only if they are not well informed. There are physician like those in our offices who have chosen to treat patients properly with the expectation of being re-imbursed their full fee upon settlement rather than hurt their patients and accept slashed MCO fees. Also, since we have taken this position for the past several years we have found many medical physicians have also come around. At this point we have little or no problem ordering orthopedic, neurologic, psychiatric and physiatric consultations. Additionally, we have found facilities which will perform bone scans, MRI, CT and EMG on a letter of protection basis.

Your clients have a choice. Unfortunately, they often don’t find out until it is too late and they have been beaten up by the gate keeper MCO physician who said that rest and over the counter medication should be just fine. Our offices in Bristol, Bloomfield, Bridgeport, New Britain, Hartford, East Hartford and New Haven are available to assist your clients towards better health without ethical compromise.