The rising tension between healthcare providers and payors reached a fever pitch last month, prompting a flurry of lawsuits aimed at better compensation and reimbursement. But
when the dust settles, consumers likely will be more confused than ever about their healthcare coverage if the hot-button issues aren't well defined and consistently articulated.
After years of being inadequately paid for healthcare claims, the hospitals and physician organizations that recently chose litigation say they are fed up with health plan
payment delays and reimbursement stonewalling. The health plans that are willing to talk claim that lawsuits are costly ways to manage these disputes. They are calling for cooler
heads to prevail. While it's too soon to tell how the public will perceive this legal mudslinging, both sides need to be prepared to address the tough image problems it will
create. Healthcare providers will have to develop PR strategies that convince consumers they are not insensitive and overly obsessed with the bottom line, while health plans will
have to use their communication muscle to overcome claims that they are holding hospitals and physicians financially hostage.
Drawing The Line
Last month, The Children's Hospital of Philadelphia's (CHOP) decision to sue IBC was considered a defining moment for conveying the hospital's position on refusing to accept
unfair HMO contracts. To underscore this point, CHOP eventually dropped IBC coverage for its 3,000 employees who were recently switched to Aetna.
The hospital's firm HMO stance required intense PR management and planning, says Karen Muldoon Geus, CHOP's director of PR and communications. Throughout the 17-month process
to secure an adequate contract from IBC, CHOP communicated its rationale to medical staff, referring physicians, patients, employers and the media. To support its position, CHOP
consistently communicated three key messages:
- IBC's expired contract;
- the impact of bad HMO contracts on hospitals; and
- CHOP's inability to continue to provide a high level of patient care under IBC's restrictive payment arrangements.
It was critical that CHOP handle its patients covered by IBC with kid gloves. This group, which accounted for 30% of its patient base, regularly received letters updating them
on the legal crisis. A special hotline also was set up to field their questions and concerns. Internally, CHOP relied on employee meetings and its corporate intranet to keep
employees up to speed on the legal filings and the rationale behind them.
"When it comes to explaining complex issues like [hospital] HMO contracts, you can't communicate too much. It's important to have your management team explain what they're
doing, why they're doing it and what the implications are," says Geus.
The California Medical Association (CMA) is tackling this communications challenge by feeding the media a steady diet of relevant research, compelling graphics and catchy
soundbite analogies, says Karen Nikos, CMA's media relations manager. CMA is suing the three largest for-profit HMOs in California. Shortly after making this announcement last
month, CMA President Marie Kuffner told reporters that the plight of physicians under managed care is similar to the situation depicted in the famous Lucille Ball chocolate
factory episode. Patients keep coming down the conveyor belt regardless of whether doctors have the ability to care for them.
(CHOP, Karen Muldoon Geus, 215/590-7091; CMA, Karen Nikos, 213/630-1139)
Legal Showdowns
Here's a snapshot of the lawsuits that recently grabbed national headlines:
- On May 9, the Children's Hospital of Philadelphia (CHOP) filed a preliminary injunction in federal court to bar Independence Blue Cross (IBC) from promoting CHOP as a
participating network hospital. CHOP's HMO contract with IBC had expired last June but the health plan continued to include the hospital in its marketing materials. After nearly a
year of legal wrangling, CHOP and IBC reached an agreement on a new contract that stipulates higher reimbursement rates and resolves other key business issues. - On May 26, the California Medical Association filed a federal lawsuit against the three largest for-profit national health plans in California, WellPoint/Blue Cross of
California, HealthNet and Pacificare, for imposing unfair contract terms. - On May 31, two dozen New York-area hospitals filed suit against Aetna U.S. Healthcare for various violations of the New York Prompt Payment Law, the New York Managed Care Act
and the state's deceptive business practice laws. The hospitals are seeking $45 million in compensatory damages and $50 million in punitive damages.