Doctors dropping health plans

Thursday, Aug. 22, 2002 | 11:16 a.m.

Some Clark County obstetricians have severed ties with managed care organizations, citing what they believe to be unfair reimbursement rates.

Instead, they have either reduced the number of plans they will deal with or have agreed to take patients on a fee-for-service basis only. For now Dr. Josef Zority, a Las Vegas obstetrician, is in the latter category.

"I dropped all of my plans as of July 12," Zority said. "I will try to negotiate new contracts in September but I don't know how successful those negotiations will be.

"I'm in a Catch-22 because I can't pay overhead by charging fee-for-service and I can't pay overhead with these company reimbursements. The problem is that patients don't want to pay fee-for-service, so it's hard for me to make a living right now."

The decision by Zority and other obstetricians comes at a time when they have complained that it has become tougher to stay in business, forcing many to leave town. They say that the money they're taking in from managed care plans such as health maintenance and preferred provider organizations is not keeping pace with rising costs such as medical malpractice insurance.

At the same time, Dr. John Nowins, president of the Clark County OB/GYN Society, said he believes that an ongoing Federal Trade Commission probe of the society was prompted by the fact that virtually all local obstetricians are seeking reimbursement increases.

"OB/GYNs are going to need increased reimbursement to survive and almost all of the obstetricians are actively renegotiating their contracts," Nowins said. "I can tell you that a lot of doctors left here because they were not getting what they were seeking. Many gave up in the process because insurance companies haven't come to the plate."

But Peter O'Neill, spokesman for Sierra Health Services, parent of Nevada's largest HMO, said that only a small number of obstetricians have decided this year to leave the company's managed health care plan. Sierra Health Services maintains that it has kept pace with the market in terms of reimbursement rates.

"I know we have been contacted by a few physicians but it's not a huge trend," O'Neill said. "There are a lot of rumors going around, but the reality is we haven't seen a lot of obstetricians drop out."

Managed care companies negotiate contracts of a year or longer with individual physicians and those in group practices. The physicians typically negotiate rates for particular services as part of the contracts. In return they agree to take patients who are affiliated with those health plans. The patients normally pay a nominal co-payment per visit, with the doctors submitting bills to the managed care companies for reimbursement for services rendered.

But Drs. Darin Swainston and John Martin, two other Las Vegas obstetricians who share offices, decided in the past three months to drop roughly 10 plans that refused to increase reimbursement rates during contract renegotiations. Swainston said he and Martin have agreed to keep some plans that have approved increases and are in the process of negotiating with others in hopes of getting better deals.

"I don't want the patients to run out of physicians because I grew up here," Swainston said. "But I only have three options. I either have to raise rates, go bankrupt or leave town."

Swainston said he has rarely been able to negotiate higher reimbursement rates in the seven years he has been in practice.

"I know a lot of doctors are in the same boat I am in," he said.

Dr. Florence Jameson, a fellow Las Vegas obstetrician, has not dropped any of her affiliations with managed care plans. But she said that if she is unsuccessful in getting the reimbursement increases she seeks, she may be forced to do what some doctors are doing in cities such as Boca Raton, Fla., and Palm Springs, Calif.

That is, form what is known as a "boutique practice," in which seeing a doctor is like belonging to a private club. Jameson said that under such arrangements, she would agree to take patients from managed care plans as long as they paid her a membership fee.

Jameson testified earlier this summer before the state Legislature in Carson City, helping to convince lawmakers to place caps on medical malpractice damages for pain and suffering. A longtime Las Vegas resident, Jameson said she is financially stable enough to survive the possibility that it could take three to five years -- if it happens at all -- for local physicians to see substantial decreases in medical liability insurance rates.

"The chance that I will get a multimillion-dollar lawsuit that would destroy me is very small now," she said. "Now at least I know I can breathe out."

But she said some obstetricians, particularly those who have relatively new practices in Las Vegas, may not be able to survive financially given the combination of high insurance premiums and health care reimbursements that haven't kept pace.

"A lot of OB/GYNs don't have financial stability and haven't saved anything," Jameson said.

Zority, for one, said he is already planning to meet with recruiters who represent medical practices in other states. The possibility looms that he will be forced to join the 34 Southern Nevada obstetricians this year who have already closed their doors, retired or stopped taking obstetric patients.

"The special session of the Legislature on medical malpractice was useless," Zority said. "It didn't drop insurance one dime."