Bay Area Preferred Physicians (BAPP)

FTC Broadens Group Negotiations; How Insurance Companies Often Reimburse Out-of-Network Claims

At a recent Bay Area Preferred Physicians Board of Directors meeting, a discussion was held in regards to two concerns.

One was the recent Federal Trade Commission (FTC) staff advisory opinion that gave approval for doctor-hospital networks to integrate. The second matter involved insurance companies' practice of paying out-of-network benefits with fraudulently low 'in-network' rate schedules. BAPP intends to ask CMA to sponsor legislation to stop such deceptive payment practices.

In their staff advisory opinion, the FTC opened the door for a physician and hospital networks to jointly contract with health plans under a clinical integration program. IN the Sept 17 advisory opinion, the FTC said the Greater Rochester (New York) Independent Practice Association's plan showed no signs of illegal price fixing, and the the group negotiations appear reasonably necessary to reach its goals.

The Rochester IPA will operate on a nonexclusive basis. Health plans can still contract separately with the individual doctors without having to contract with the IPA - which the FTC noted as "key" to its approval.