Regulating the financial incentives facing physicians in managed care plans

Area of Science:

• Health policy
• Managed care
• Physician economics

Background:

• Public anxiety over managed care access and appropriateness of services has spurred legislative action.
• Focus on financial relationships between managed care organizations and physicians.

Purpose of the Study:

• To review legislative and regulatory actions concerning physician compensation in managed care.
• To examine state and federal regulations impacting financial incentives for physicians.

Main Methods:

• Review of state legislation mandating disclosure of financial relationships.
• Analysis of state laws regulating physician compensation methods.
• Examination of Health Care Financing Administration regulations for Medicare/Medicaid plans.

Main Results:

• Twelve states mandate disclosure of financial relationships between managed care plans and physicians.
• Eleven states regulate physician compensation methods, prohibiting incentives to limit care.
• Federal regulations governing physician financial incentives in Medicare/Medicaid plans are in effect since January 1, 1997.

Conclusions:

• Legislative and regulatory efforts are underway to address financial incentives in managed care.
• New laws aim to ensure physicians are not induced to restrict medically necessary services.
• Managed care financial structures are increasingly subject to oversight to protect patient access to care.