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A Gagged Physician Cannot Fully Serve the Patient : If the offending HMOs persist, new laws may be needed

April 21, 1996

Secrecy and threats should have no place in medical care. Yet there are "gag clauses" and "disparagement clauses" in contracts between some health insurers and physicians that raise troubling questions about the level of candor or completeness encouraged or tolerated in dealing with patients of health maintenance organizations.

It is old news that medical care is undergoing a sea change. Physicians who once practiced independently, relying largely on their own medical judgment and skill and the ethical guidelines of their profession, are increasingly being drawn into contracts with large HMOs. Those contracts limit the fees physicians receive for treating HMO patients and can limit as well the range of tests or treatments for which physicians will be reimbursed. Sometimes treatment restrictions can compromise the quality of care that patients receive by directing physicians to prescribe certain medicines and not others or, in extreme cases, by foreclosing expensive treatment options.

Managed care has slowed the runaway expense of health care in this country. But that considerable and welcome achievement has come with its own cost. Patients who welcome the lower out-of-pocket costs often are nonetheless frustrated by the delays and bureaucracy they may face. Many physicians, meanwhile, are angry about what they see as a loss of income and control under managed care. Reports that physicians in California and elsewhere are bound by gag orders and disparagement clauses raise anxieties across a broad band of patients, physicians and health care advocates.

Many doctors complain that the restrictions prevent them from criticizing HMOs or their physician-headed groups and HMO payment practices that encourage doctors to save money by limiting care. Physicians who violate these clauses are subject to discipline, even termination, by the HMO. In their harshest form, gag clauses explicitly prohibit doctors from telling patients the full range of treatment options. Instead, doctors may only inform patients about the treatment options covered by their insurer. Those clauses are rare, but where they exist they serve the interests of the insurer rather than the patient. Patients generally don't know about them because some managed care contracts prohibit physicians from discussing the restrictions.

For their part, HMOs say that some of the gag provisions are intended to protect trade secrets and proprietary information. Officials insist that the clauses are intended to encourage doctors to discuss their concerns about payment and treatment policies with health plan representatives, rather than complaining to patients. But physicians say the restrictions compromise their ethical and legal duty to provide patients with information about benefits, risks and costs of various treatments. We agree and feel these restrictions have no place in patient care.

State lawmakers in Sacramento have introduced five bills that would restrict gag clauses. Several of these bills, now moving through legislative committees in Sacramento, are similar in their language and intent. Consumer groups and labor unions are trying to qualify two initiatives for the November ballot that would bar gag clauses and regulate other managed care practices. Anti-gag legislation is pending in at least six other states. Moreover, the federal government now requires that managed care plans serving Medicare and Medicaid patients reveal any arrangements in which doctors may face financial pressures to limit services or treatment by specialists.

If the health maintenance organizations do not move quickly to eliminate these secret provisions, the Legislature should act to bar the provisions from contracts. A physician must be free to tell a patient about any treatment option, regardless of whether that treatment is covered by the patient's plan. Doctors should not suffer for following their Hippocratic Oath. Gag clauses are not good medicine. Neither are they sound economic policy in the long term; patients who have a choice aren't likely to stay with an insurer suspected of denying them the full facts about their health care.

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