No-cause firings out, CA high court rules
No-cause firings out, CA high court rules
Major victory for physicians
The California Supreme Court has ruled that managed care plans cannot arbitrarily terminate physicians from provider panels and that any removals must be "both substantively rational and procedurally fair."
Marie Kuffner, MD, president of the Califor-nia Medical Association (CMA), called the ruling "a great victory for physicians and patients. The California Supreme Court has upheld a basic CMA tenet that basic fairness must be assured before decisions are made that adversely affect a physician’s status — and patients’ access to their physicians in a managed care situation."
The ruling was issued May 10 in a lawsuit filed by Louis E. Potvin, MD, now deceased, against Metropolitan Life Insurance Co. Potvin, an obstetrician and gynecologist, received notice in 1992 from MetLife saying that it was terminating his preferred provider status.
The company said that his termination was consistent with the contract, which allowed termination "without cause" and did not respond to Potvin’s request for a hearing.
In filing the suit, Potvin charged that MetLife had devastated his practice. He said he had been required to reveal his termination to other insurers, which also removed him from their preferred provider list.
The American Medical Association and the CMA filed briefs in support of Potvin, asserting that insurance companies "hold substantial economic power over physicians and their patients" and that "the control exercised by managed care organizations makes access to provide panels a practical prerequisite to any effective practice as a health care provider."
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