October 1997 Bulletin

Unions are not for everyone

The idea that physician unions are the key to dealing with managed care organizations is gaining popularity, but it may not provide a solution for most orthopaedic surgeons.

The problem is that antitrust laws permit unions to represent only employed workers in collective bargaining with their company, says Edward Hirschfeld, vice president, health law, American Medical Association.

Only a small percentage of orthopaedic surgeons are salaried employees of a managed care organization. They can be represented by unions in collective bargaining with their employers.

However, Hirschfeld told the Board of Directors meeting last month that unions cannot represent self-employed physicians in collective bargaining. A physician can be a card-carrying member of a union, but that doesn't mean the union can engage in collective bargaining on his or her behalf.

"What is key is not the status of the organization, that is, an organization certified as a union," Hirschfeld said. "What is key is the status of the person that the organization purports to represent."

Many orthopaedic surgeons are confused by the fact that some affiliates of unions like the AFL/CIO are representing physicians in a special relationship, called a third-party messenger-model IPA, which is exempt from antitrust rules. Michael Connair, MD, an orthopaedic surgeon in New Haven, Conn., has attracted the attention of many orthopaedists across the country by successfully getting the Federation of Physicians and Dentists (FPD) of the AFL-CIO to represent him and other orthopaedic surgeons in the New England area. The physicians have joined the FPD, but the union is not representing them in collective bargaining. The union is really operating a third-party messenger arrangement model IPA.

Hirschfeld explained that in a third-party messenger model arrangement, an individual known as a messenger, who can be a union representative, is appointed by physicians. The messenger communicates with the physicians individually on what price he or she is willing to accept for services from a payer. But the messenger cannot tell other physicians what that price is and the physicians cannot meet and share that information with each other.

Each physician individually can preauthorize the messenger to accept offers from the payers at the level he or she is willing to accept. The messenger can create a schedule that will tell the payer what percentage of physicians in the messenger model network will accept fees at a given level.

"I can also take a survey of fees and costs and I can use the survey in two ways," Hirschfeld said. "I can give it to you (the orthopaedist) so you can have some idea of what market fees and costs are in deciding individually what fees you want to accept. I can give it to the payer so the payer has some ideas of what fees and costs are in the market in evaluating the schedule I've presented showing what percentage of physicians are willing to accept a given price."

The payer makes an offer which the messenger either accepts at the preauthorized level or rejects. If the offer is rejected, the messenger reports back to the individual physician, but can't share any additional information.

The third-party messenger model can be formed by any organization, not just a union. The union-label is being sold on the premise that its representatives are experienced in aggressively negotiating contracts.

The AMA has been unsuccessful in trying to change the antitrust laws to gain collective bargaining rights for self-employed physicians. Hirschfeld explained that managed care organizations are credited with stabilizing health care costs, and politicians don't want to do anything that will result in a rise in health care costs because that would be inflationary. Politicians also don't believe physicians are hurting and require relief, Hirschfeld said.

Meanwhile, the AMA has formed a Division of Representation which represents physicians, in partnership with state, county, and specialty societies, in dealing with health plans, said Carol O'Brien, director of the division. The division is designed to provide legal and practical experience to enhance the ability of physicians, but does not operate as or a substitute for personal legal counsel.

The division also is playing a role in determining conflicts over clinical issues. The division is building a databank on clinical issues to share with the medical community and help the AMA identify recurring themes. With state and county medical societies taking the lead on developing the facts underlying a physician complaint, the AMA will step in to assist in developing a strong response, and at the request of the medical societies, will join the local society in communications with the health plan.

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