[Congressional Record Volume 143, Number 152 (Tuesday, November 4, 1997)]
[Extensions of Remarks]
[Pages E2179-E2180]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                HMO DRUG RESTRICTIONS: LOOK OUT PATIENTS

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                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                       Tuesday, November 4, 1997

  Mr. STARK. Mr. Speaker, following is an article from the October 16, 
1997, Dallas Morning News regarding the Harris Methodist Health Plan's 
financial incentives restricting what doctors prescribe for their 
patients.
  I'm glad I'm not in that plan--and if I were in it, I'd sure get out 
if I could. The plan's financial incentives on doctors not to prescribe 
violate the spirit, if not the letter, of the Medicare law limiting the 
type and amount of financial incentive that a plan can place on a 
doctor to withhold care.
  This Texas example is a classic of why we need managed care consumer 
protection reforms--ASAP.

             [From the Dallas Morning News, Oct. 16, 1997]

    HMO Fines Angering Physicians; State Regulators Examine Harris 
                          Prescription Policy

                         (By Charles Ornstein)

       A growing number of Fort Worth- and Arlington-area doctors 
     are accusing Harris Methodist Health Plan of penalizing them 
     for writing too many prescriptions, and the controversy is 
     drawing the attention of state insurance regulators.
       The doctors say the health maintenance organization has 
     fined them thousands of dollars this year because they 
     exceeded a predetermined pharmacy budget, which is included 
     in their contracts with Harris.
       They contend that the company's policy, enforced for the 
     first time this year, places the financial bottom line above 
     the patients' best interest.
       ``My concern is that one day, I or another physician may 
     withhold some care for financial reasons,'' said Dr. J. Mike 
     White, a family practitioner in Joshua, south of Fort Worth, 
     who had to repay Harris $28,000 this year. ``That's 
     inappropriate and that's unethical.''
       Harris officials defended their system Wednesday but said 
     they will increase the allowable pharmacy expenses next year 
     in response to the doctors' concerns. The officials said the 
     network's 6,600 physicians should work harder to cut their 
     costs.
       ``I think we are in a situation where we are not doing 
     things as efficiently as possible and we need to change our 
     practice patterns,'' said Dr. Ramiro Cavazos, chairman of 
     Harris Methodist Select, the network's exclusive physician 
     group. `The problem is that we have a premium, and we have to 
     live within that premium.''
       The Texas Department of Insurance said Wednesday that it 
     has begun a review of Harris' incentive policies. Spokesman 
     Jim Davis said he does not know how long the review will last 
     but said it comes after a physician complained to the state.
       ``Whenever questions are raised about the operations of 
     HMOs or insurance companies in Texas, it's our job to look 
     into the situation,'' Mr. Davis said. ``This is nothing 
     really special.''
       The Texas Medical Association board has said that it has 
     serious concerns about the effect of the prescription limits 
     on patient care.
       ``Our concern is that the financial incentives and 
     disincentives appear to be really too severe in the sense of 
     encouraging doctors to provide necessary care,'' said Rocky 
     Wilcox, general counsel of the state medical group.
       ``Nobody has really looked to see whether these patients 
     were provided with unnecessary medication or whether they 
     really needed it.''
       Last week, the 18-doctor Fort Worth Clinic joined a lawsuit 
     against Harris that was filed in August by physician Richard 
     Hubner. Dr. Hubner, who practices in Springtown, in Parker 
     County, settled his claims against Harris last month after 
     officials agreed to stop penalizing him for writing too many 
     prescriptions.

[[Page E2180]]

       The clinic's court petition alleges that the health network 
     provides an incentive for doctors to deny care and reject 
     sick patients, which would be a violation of state law.
       ``I don't think that you would want your doctor to think 
     about whether it would cost him money personally if he 
     prescribes medicine that you need,'' said David Humphrey, the 
     clinic's administrator. ``We think it's wrong, and we've been 
     advised that it's illegal.''
       Under Harris' contracts with its physicians, the company 
     pays doctors a set monthly fee to provide all necessary care 
     to each Harris HMO patient. That fee, which is a percentage 
     of each member's premium, ranges from $11.87 to $15.19 per 
     month.
       In addition, doctors are entitled to spend 9.6 percent of 
     each premium dollar on prescriptions. If they exceed that 
     budget, the contract requires them to pay Harris 35 percent 
     of the additional cost. If they spend less than the budget 
     allowed, they receive a bonus.
       Harris has awarded $338,000 in bonuses during the last 
     quarter, Dr. Cavazos said. He didn't disclose the amount of 
     fines assessed to doctors.
       According to a confidential memo obtained by The Dallas 
     Morning News, Harris doctors exceeded their pharmacy budget 
     by more than 26 percent last year. Internists, who generally 
     treat sicker patient, surpassed their budget by 46 percent, 
     the memo says.
       ``I've been amazed at the number of people who have been 
     suffering and paying this in silence,'' said Robin Weinman, 
     executive director of the Tarrant County Medical Society. ``I 
     don't know how they're surviving, quite frankly.''
       Internist Karen Spetman said she was billed $10,000 by 
     Harris in July for exceeding her pharmacy budget during the 
     first six months of the year. That accounts for about 15 
     percent of the fees she has received from Harris, she said.
       ``Nobody works for free,'' she said. ``But right now, that 
     is what I'm doing. I'm not even working for free--I'm working 
     for a negative number. I am paying money for the privilege of 
     practicing medicine.''
       Dr. Spetman, the only Harris internist in the Fort Worth 
     suburb of Willow Park, said she has met repeatedly with 
     Harris representatives to explain her problems. When she 
     reviewed her patient charts and prescriptions with a Harris 
     pharmacy director, she was told that she was making the 
     correct medical decisions, she said.
       Harris officials did not contest Dr. Spetman's claims. But 
     they said doctors in the system need to realize that 
     increased efficiency and short-term sacrifices will 
     eventually lead to long-term savings.
       ``When you get a bill, you're hopping mad,'' said Harris 
     spokeswoman Lisa O'Steen. ``But if you look at it in the long 
     term, because Harris has such a high retention of patients 
     and doctors, this is a savings you see over a long period of 
     time.''

     

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