A patient of Aetna Health Plans has filed a lawsuit against the insurer in federal court that seeks to stop AHP from paying doctors a flat fee rather than a fee based on individual services they provide.
The plaintiff, Mara Maltz of Behmore, N.Y., claims that flat fee arrangements could harm her two children--who suffer from chronic intestinal ailments--because such payments may force her two long-term pediatricians to leave Aetna's provider network.
Their departure, she adds, would effectively limit the amount of care received by the children, who require regular monitoring and medical care, according to the suit.
Whitney Seymour, a partner in the New York law firm Brown Seymour, which is representing Ms. Maltz, said the suit marks the first attempt to block capitation arrangements on the grounds that they violate the Employee Retirement Income Security Act of 1974.
Not so, says an attorney who specializes in health care law.
'To say ERISA standards prohibit capitation arrangements is ridiculous,' said John Hoff, a partner in the Washington D.C. law firm Swindler Berlin.
'Choosing capitation is a judgment made by administrators of a health plan that [pre-paid fees] provide the best bang for the health care buck for beneficiaries, which is consistent with ERISA,' he said.
The lawsuit claims that Ms. Maltz's pediatricians of the last 16 years, Drs. Marvin Sussman and Laurence Neller, were told by Aetna that their present participating provider contracts would be terminated unless they agreed to change their compensation arrangement from fee-for-service to 'capitation' and a 'Physician's Incentive Fund.'
Mr. Seymour insists this is a violation of ERISA.
'Aetna's first loyalty is to the beneficiaries and when they take action in their own economic interest which hurts beneficiaries, they violate their fiduciary responsibility,' he said.
ERISA regulates all group health insurance contracts and requires such health plans to act 'solely in the interest of the participants and beneficiaries for the exclusive purpose of providing benefits to them,' according to the suit.
Walter Cherniak, a spokesman for Aetna Health Plans, Middletown, Conn., said the suit is 'baseless,' adding the case is another attempt to 'use the courts to attack managed care.
'Our capitation payments are perfectly legal, and provide a fair level of compensation to our providers' he said, adding that there has been no evidence in New York that capitation arrangements have adversely affected quality of care.
One physician caught in the crossfire, however, said capitation continues to compromise patient care.
In a telephone interview, Dr. Miller said, 'Doctors who are stuck in capitation are being encouraged by health plans' to see patients less frequently.
He added that he and Dr. Sussman were still practicing in the Aetna network and were hopeful 'that there will be some reprieve from Aetna' with regard to capitation.
Aetna has not given the doctors any indication, however, that the network intends to change its policy.
