Ama Policy

Hospital-Based Physician Contracting H-383.997

Risk—Physicians Taking, Termination

1. It is the policy of the AMA that agreements between hospitals and hospital-based physicians should adhere to the following principles:

(a) Physicians should have the right to negotiate and review their own portion of agreements with managed care organizations.

(b) Physicians should have the right to set the parameters and acceptable terms for their contracts with managed care plans in advance of contract negotiations.

(c) Physicians representing all relevant specialties should be involved in negotiating and reviewing agreements with managed care organizations when the agreements have an impact on such issues as global pricing arrangements, risks to the physician specialists, or expectations of special service from the specialty.

(d) Physicians should have the opportunity to renegotiate contracts with the hospital whenever the hospital enters into an agreement with a managed care plan that materially impacts the physician unfavorably.

(e) The failure of physicians to reach an agreement with managed care organizations should not constitute a breach of its agreement with the hospital, nor serve as grounds for termination.

(f) Physicians should seek a provision that allows them to opt out from managed care plans that pose unacceptable professional liability risks.

(g) Physicians should seek a provision to refuse to contract with, to modify contracts with, and/or to terminate contracts with managed care plans that are showing financial instability, or should seek a guarantee from the hospital that the plan will make timely payments.

(h) Physicians should receive advance notice of the hospital’s intent to enter into any package or global pricing arrangements involving their specialties, and have the opportunity to advise the hospital of their revenue needs for each package price.

(i) Physicians should have the opportunity to request alternative dispute resolution mechanisms to resolve disputes with the hospital concerning managed care contracting.

(j) If the hospital negotiates a package pricing arrangement and does not abide by the pricing recommendations of the physicians, then the physicians should be entitled to a review of the hospital’s actions and to opportunities to seek additional compensation.

(k) Physicians should be entitled to information regarding the level of discount being provided by the hospital and by other participating physicians.

2. Our AMA urges physicians who believe hospitals are negotiating managed care contracts on their behalf without appropriate input, and who feel coerced into signing such contracts, to contact the AMA/State Medical Society Litigation Center, their state medical association, and/or legal counsel.

Policy Timeline

CMS Rep. 3, A-00Reaffirmed: BOT Rep. 13, I-06Reaffirmed: BOT Rep. 4, I-12Modified: CMS Rep. 1, A-22