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limited due process restrictions on their credentialing. [Liang, BA. Deselection under
Harper v. Healthsource: a blow for maintaining patient–physician relationships in the
era of managed care, ND Law Rev. 1997;72:799.] They may choose not to renew a
physician’s contract for any nondiscriminatory reason, including staff reductions to
lower costs. If the MCO terminates the physician’s contract for medical negligence–
related conduct, most states will allow or require the MCO to report this to the State
Board of Medical Examiners (BOME), who then report to the National Practitioner
Data Bank (NPDB). [42 U.S.C. §§ 11131, 11133, & 11134 (1996).] Physicians have
a right to review their files, and to request corrections, but no right to force the Data
Bank to make corrections. The NPDB allows hospitals and MCOs to query its files
when they are hiring or granting staff privileges to a physician. An adverse report in
the NPDB can make it impossible for a physician to obtain employment or medical
staff privileges anywhere in the United States.
On balance, the NPDB is a good idea, but it poses several problems for physicians in
MCOs. An unscrupulous plan can use threats of reports to the NPDB as coercion.
This can be very effective if the physician is contesting a noncompete agreement, or
does not want to follow the plan’s rules. Arguably, federal law does not mandate
reporting to the NPDB by MCOs, but it is difficult to contest the right of an MCO to
make a report. Reporting entities have immunity unless it can be shown that the
reporting entity knew the information in the report was false. [42 U.S.C. § 1137(c)
(1996).] This is a difficult standard to meet. If the physician loses, and the contract
with the plan has an indemnification agreement, then the physician may have to pay
the plan’s legal expenses.
For employee physicians the risk of deselection may be greater than just being fired.
Many MCO employment contracts include noncompete clauses that can force the
physician to leave the community. Some states strictly limit the enforcement of these
clauses as being against public policy, and a few have outlawed them entirely. [Berg.
Judicial enforcement of covenants not to compete between physicians: protecting
doctors’ interests at patients’ expense. Rutgers Law Rev. 1992;45:1.] However, in
many states, these agreements are enforceable for reasonable limitations of time and
distance. In at least one state, Missouri, the courts will enforce restrictions as long as
two years, covering a 200-mile radius, and have failed to find any public policy
rationale for treating physicians differently from other businesses or professionals.
The deselected physician faces having to move, and perhaps getting licensed in
another state. If physicians are deselected for not abiding by financial guidelines
established by the plan, then it is unlikely that other plans will be interested in hiring
them.
Physicians negotiating with an MCO should try to get a contract with very specific
criteria for termination. This is increasingly difficult to do. In many communities,
MCO contracts have become adhesion contracts because there are too many
physicians willing to take positions on any terms. The physician should know at all
times where he or she stands with the plan and what is necessary to meet the plan’s
objectives. These objectives should be spelled out in sufficient detail that the
physician can determine if they can be achieved while preserving adequate quality of
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