Dropping A Payer

January 1, 2007

We’re soon going to part ways with a specific managed-care payer. I will be sending a letter to my patients covered by that payer to inform them of our decision, explaining to them that we will not be renewing our contract because the insurer has ignored our complaints, been grossly substandard in its partnership with us, and has exasperated our staff. Will giving our patients the above reasons for the non-renewal open us up to any sort of litigation?

Question: We’re soon going to part ways with a specific managed-care payer. I will be sending a letter to my patients covered by that payer to inform them of our decision, explaining to them that we will not be renewing our contract because the insurer has ignored our complaints, been grossly substandard in its partnership with us, and has exasperated our staff. Will giving our patients the above reasons for the non-renewal open us up to any sort of litigation?

Answer: At the risk of seeming evasive, allow me to ignore the legal issue. It seems to me what you really have on your hands is a communications and business problem.

What do you hope to accomplish with the letter? I think the letter you propose will not do much to help you retain any of these patients, may alienate a payer you might want back in your corner someday, and really only serves to let you blow off some steam. Your patients don’t care that your staff is exasperated, and they may not understand what all this has to do with them except that they probably need to find a new physician.

Instead, accomplish something positive.

Write a letter that briefly states that you are dropping the payer, and then go on into some detail explaining that you want to keep these individuals as patients and that money shouldn’t have anything to do with it. Outline exactly how they can go about continuing to see you out of network.

If you want to push back on the payer, push where you might have some effect. Determine whether a large percentage of this payer’s patients work for the same company. Arrange a meeting with the human resources director of that company, and explain your situation. Encourage the company to drop this payer as a provider of benefits to its employees. Tell them that they are paying for administrata, not healthcare. The point of your communication should be to keep your patients’ business if at all possible, not to change the country’s entire healthcare system or achieve some personal release. Besides, success is the sweetest revenge.