Insurers cut doctors' fees in new health care plans

The move has sparked worries that the exchange plans will attract far few doctors than needed.

By Money Staff Nov 22, 2013 3:03PM

This post comes from Christopher Weaver and Melinda Beck at partner site The Wall Street Journal.


The Wall Street Journal on MSN MoneyInsurers are slashing payments to medical practices in many of the plans they sell through the new health-law marketplaces -- sparking worries that Americans signing up for coverage will have fewer doctors to choose from if low fees spark an exodus from the plans.


Medical doctor © John Arborgast, Photodisc Red, Getty ImagesUnitedHealth Group Inc. sent some New York City physicians contract amendments as recently as this month setting rates well below what doctors normally see from private insurance, including less than $40 for a typical office visit and about $20 for reading a mammogram, according to confidential documents reviewed by The Wall Street Journal.


"We have heard from a lot of physicians the rates [insurers] are offering them are very low, and physicians are questioning whether they are going to participate," said Sam Unterricht, a Brooklyn ophthalmologist and president of the Medical Society of the State of New York.


Some of United's rates fall close to what the state Medicaid program for low-income people pays for the same services. The fees for some office visits are less than half of what doctors in the city say they receive for treating people covered by employer-sponsored insurance. Six doctors elsewhere in New York reported lower rates from a range of insurers, including United, but declined to specify rates citing confidentiality agreements.


"Our goal is to provide exchange members with a robust choice of providers," said a statement issued by United. The insurer added that it would "offer physicians the choice of participating at rates that are above Medicaid and comparable to historical rates." Few New Yorkers have historically purchased coverage on the individual market, and doctors say their rates for most employer-sponsored plans are much higher. The company initially notified doctors of new rates in April.


WellPoint Inc.'s Anthem unit in Connecticut offered Steven Levine, an ear nose and throat specialist in Trumbull, rates for exchange plans he said "were not what a reasonable person would consider acceptable." He says he declined the contract.


A spokeswoman for Wellpoint said that in designing its exchange plans, it "focused on affordability to allow the maximum number of individuals to purchase coverage."


The exchange plans are expected to cover more than 20 million people by 2016. Doctors have long protested declining or stagnant rates from government programs such as Medicare and Medicaid, and had looked to the exchanges to usher in more privately insured patients.


More physicians may leave the plans as awareness of the new rates spread, doctors and experts said. Many doctors surveyed in September by the Medical Group Management Association said they weren't aware of the fees they would be offered for treating patients gaining coverage on the exchanges. Of those that had heard, 37 percent said the rates offered were lower than Medicare, and 18 percent said they were lower than Medicaid rates, according to the survey.


The 2010 healthcare law itself doesn't include any requirements limiting physicians' payments or restricting insurers' arrangements with doctors. But in order to keep prices low for exchange plans, many health insurers cobbled together narrow networks of doctors who agreed to lower their fees.


But United's move, affecting plans designed around broader physician networks, is meant to rein in costs, too. Some doctors said they had learned of the fee cuts even as consumers began picking health plans. As a result, consumers may end up selecting doctors who haven't yet agreed to participate in the plans. United is giving doctors who don't want to accept the rates 30 days to opt out.


State-run Medicaid programs are being expanded in some states under the law. The program has long grappled with problems in patients' access to services because not all doctors are willing to accept the generally low reimbursements.


Experts worry that a stratified system could emerge for the insured, where people who get health insurance through their jobs can go to a broad slate of doctors, while those newly covered in the exchanges get fewer choices. Depending on their plan, people may be able to see an out-of-network doctor and get some level of reimbursement. But many plans on the exchanges are HMO-style closed networks.


"It is going to be very tough for consumers to have accurate information about which physicians they really have access to," said Paul Ginsburg, president of the Center for Studying Health System Change, a Washington think tank.


But Joanne Peters a Department of Health and Human Services spokeswoman said, "there are now new patient protections that require qualified health plans to offer sufficient networks of providers."


Under some contracts, doctors don't have to agree to the new rates -- they are automatically enrolled in the new networks. Other contracts give doctors as many as 90 days to opt out. Also, some plans are still offering the same rates as before.


How much leverage plans have to push down rates for physicians could depend in part on the number of consumers who sign up for coverage in the exchanges, which have gotten a slow start due in part to technical obstacles and a troubled rollout. If few people enroll in coverage, insurers may not need broad networks, but if enrollment soars, they may have to return to the negotiating table.


Blue Shield of California sent doctors contract amendments allowing them to opt in to treat exchange patients earlier this year. The health plan asked doctors to accept fees up to 30% lower than their normal commercial rates, according to doctors and the insurer.


"We said, this doesn't make a whole lot of sense for us," said Richard Thorp, an internist in Paradise, Calif., and president of the California Medical Association. Too few doctors agreed to the change in some mostly rural areas, so Blue Shield had to agree to continue usual rates for some doctors, said Steve Shivinsky, a spokesman.


Meanwhile, community health centers, long accustomed to treating the uninsured, are ramping up. Lone Star Circle of Care, a federally funded health center in Austin, Texas, is adding 80,000 square feet of clinic space next year, said Tamarah Duperval-Brownlee, its chief medical officer, and is participating with all seven insurers serving its market.


More from The Wall Street Journal:

Nov 22, 2013 4:24PM
Guess which plans will have the worst doctors? Bet you lib idiots didn't think that far ahead. 20 years from now most of our doctors will be from third world countries. Why would a brilliant kid want to spend hundreds of thousands going to school for 8+ years just to make a little more than what  UAW flunkies' used to make and have a lot more head aches to deal with. Obamacare is the beginning of the end of the US  having the best doctors and hospitals in the world. But at least the libs will make sure we all have equally crappy care. Except of course for the politicians.
Nov 22, 2013 3:56PM
Here is an example of what is wrong with our system. A person has a kidney stone and it does not pass. 60 years old and the first stone. 900 for a ride to the hospital. 20,000 for one night and a non-invasive laser to break it up. Stint inserted for one week.  20 minute removal of stint in doctor's office with no sedation just via bladder. Surgeon wants to do surgery to enlarge tube. Patient declines and is charged 3500 for the consultation of 10 minutes.  Never told patient what type of stone it was so diet could be modified. Total 24,000..... outrageous
Nov 22, 2013 4:38PM
Welcome to Canada. There will not be enough Doctors. Older Doctors will retire. Others that have steady practices will not accept ACA, medicare, nor medicaid patients. There will be a small amount of new physicians that will take the new patients with huge waits. There will be fewer and fewer new Doctors coming out of school. You cannot do 10 years of school and residency and make $40 on a doctors visit. Welcome to Obamacare.
Nov 22, 2013 4:21PM
My Brother is ending his practice at the end of the year. He's retiring a couple of years early rather than put up with the reduced payments and the ever increasing paperwork.
Nov 22, 2013 4:00PM

Offer doctors payments lower than Medicare so the Gov't has to expand Medicare.

Should have seen this coming..............


Nov 22, 2013 9:08PM
I've been serving patients for 20 years for an average dollar visit of $54.00  So why can't the others?
Saw MY physician  eight weeks ago, one half hour of time for $258.00.  Blood work still pending.
If the system went back to mostly cash, consumers would get good care as doctors would HAVE to CARE ABOUT their patient...not what insurance they have. FACT: if you have insurance you will get more tests, drugs, physical therapy, rehab etc.  There is a TON of waste in insurance based health care, especially Medicare. With this said; the BIGGEST waste are the expensive tests not the doctors wages. 
Nov 22, 2013 8:13PM

Wonder how many people will be hurt by and/or disappointed by 'ObamaCare'. Does anyone

expect our politicians to tell the truth. It seems as though no one has been truthful as to the implementation of the Affordable Care Act. Predict more pain and anger in the future. 

Nov 22, 2013 8:37PM
Most of you are missing the boat on this subject.  Many still don't understand globalization and the New World Order so here is a primer.  Wages throughout America and The EU are on decline and will continue until the same basic wage is world wide.  Production will never return to the States until wages drop to being comparable to China, India, and soon Central America.  When will illegal's stop coming across our borders?  When it no longer is a financial benefit and no sooner.  What will the ACA do to doctors wages?  They will lower them to be on par with doctors incomes in China, Mexico, and India. And doctors in these countries make perhaps 1/3 to 1/4 the relative wages here.  Many of the doctors needed for this ACA will be from the Asian countries as that is where they are now being trained. A massive influx of Asian medical professionals is under way as we speak and they all are willing to work for much less than your established American doctor.  This importation of cheaper labor is well planned and supported by this corrupt political institution. This medical industry is viewed very much the same as manufacturing.  And this is?  Bust the manufacturing unions and bust the medical practitioners union as well.  This is all about control and money and anyone thinking there is some form of compassion from this political front for poor people is ludicrous.  CONTROL over options is what socialism is all about!
Nov 22, 2013 6:00PM
As the fat cats with their great coverage in Washington tell us, " with your new policy you can see any LPN ( 1-1.5 years of post high school education) at the neighborhood bodega."
Nov 22, 2013 6:10PM
I'm old (medicare) and went to my Dr. of 7 years whom I like and respect with a middling problem. He prescribed a couple of very expensive tests ( ins would pay for them). As a cautious customer I questioned this as overkill; his response was "yes, but this will give as good information for the future and medicare probably will not cover them next year."
Nov 23, 2013 12:54PM

old grouch 323,


The ACA in fact has taken $700 billion out of Medicare which has resulted in reduced payments for services to doctors.


A little research will show you the majority of single payer systems in the world are running huge deficits.


Thanks for being a part of the movement to bankrupt the US and tax an ever growing smaller pool of taxpayers.

Nov 22, 2013 9:55PM
Just one more example of why the Patient Protection and Affordable Care Act is neither.
Nov 22, 2013 5:02PM
Nov 23, 2013 3:12PM
My old doctor quit and closed up his office.  After paying rent, staff, insurance, etc., it turns out he was only making around 80k a year, and he said it wasn't worth the headache. With Obamacare of course, he wouldn't even be making that much.  What are we going to do about recruiting new doctors?  I guess the liberal government didn't think about that!  Thanks Mr. President!
Nov 22, 2013 7:24PM
When I talked to my doctor this week, not only are payments being reduced but many doctors are being dropped from plans.  One of the major Seattle insurer only covers one clinic and no other doctors within 30 miles of my residence.  Statements like "there are changes to our network of doctors and providers next year" is the only warning you may see.  I presume that they have also delisted certain procedures and drugs along with increasing copays and catastrophic out of pocket expenses (for network listed procedures).
Nov 23, 2013 11:05AM

The ACA guarantees profit for the insurance companies at the expense of the taxpayers. Another bail-out by the empty suits in Washington. My wife works in a hospital and they are ramping up productivity and cutting employees. This will equate to less service per consumer and less time with your doctor.


The Democrats really screwed the 85% who had healthcare to entitle the 15%!!!!

Nov 23, 2013 1:53PM

No tort reform, no reform PERIOD. Affordable, no, Care not, Act, yes- a vote buying power grabbing scheme act that will likely finish the economic collapse we are on the path for.

MA health is NOT a good model for healthcare-its going broke as taxpayers and business leave the state due to avoid the excessive taxes levied to pay for the MA plan. Also, the avg length of time to see a primary caregiver went from 20 days to 43 and the ignorant and lazy still flock to th emergency room for care.

I AM in favor of true health care reform nut that will not be accomplished by OBAMACARE.

Tort reform

Selling across state lines

NO EXEMPTIONS-NONE including the president, congress, unions, etc etc..

These 3 simple acts would be a great start.

Wonder why all the E Coast imaging centers are filled with europeans and Chicago, Detroit, Buffalo imaging centers aee filled with Canadians? The answer should be obvious.  

Nov 22, 2013 5:37PM
Went to a GP/Family Practice MD for a sinus problem; no diagnosis, just a referral to an ENT specialist. ENT #1 ordered $4K worth of tests which were inconclusive, so went to ENT #2 for 2nd opinion - he spent the entire visit trying to get ENT #1's opinion, then suggested I see a GP/Family Practice MD for more tests. Hundreds of  $$$ poorer, and still no diagnosis but having obvious symptoms; did my own research, went to yet another GP who obliged my request for the prescription drugs I decided would clear up the problem - which they did. This is the finest healthcare system in the world and worth the extortionistic fees charged? Get these money hungry bozo's out and get back to medicine as a vocation, and not a ticket to a lush budget.
Nov 22, 2013 3:53PM
This is where congress should have regulated the insurance companies, hospitals, doctors, and pharma co. instead of targeting the masses with the ACA. Vote them all out Republicans and Democrats.
Nov 22, 2013 9:43PM
We have the best doctors and hospitals in the world? You do not think there are any good doctors in Germany and many other countries? You don't think medical devices are manufactured and designed in other countries? 
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