New Rules Aim To Keep Doctors Focused On Patients

New rules restricting HMOs’ power to reward doctors for limiting health services were issued Wednesday to protect Medicare and Medicaid patients. Managed-care groups suggested more and wider rules were coming.

Many managed-care organizations use financial incentives to stop expensive surgeries or other treatments that could be considered unnecessary if re-examined.

Patients have sometimes objected and sued HMOs for refusing to pay for treatments the patient considered crucial.

“No patient should have to wonder if their doctor’s decision is based on sound medicine or financial incentives,” said Donna E. Shalala, secretary of Health and Human Services. “This regulation should help put Americans’ minds at rest.”

The new rules, published in the Federal Register, enforce a 1990 law that was enacted as a safeguard, not because the quality of care had suffered, said Tony Hausner, an HHS managed care analyst.

Bruce Fried, director of the managed care office at HHS, said it affects only Medicare and Medicaid patients but will set a standard by which HMOs could voluntarily disclose the same information to others they insure.

But HMOs have strenuously opposed state legislative efforts to regulate HMO incentive programs.

“It is not farfetched to think states will use this to create state laws,” said Kelli Back, a Washington attorney who represents HMOs. “In general, the regulations have progressed a bit since they were first proposed.”

“But,” she said, “there remains a problem with the underlying statute,” because it assumes that HMO incentives are bad and need to be regulated without studies to show they are.”